After closing down Print Ads, Google exits Audio Ads programme

13 February 2009

It's rare that Google encounters failure, but its three-year old foray into radio advertising has now come to an end. Yesterday it announced plans to shut its radio-advertising business Google Audio Ads and cut as many as 40 jobs, saying the investment didn't provide enough of a payoff.

The company, which expanded into the market with the 2006 purchase of DMarc Broadcasting Inc., is seeking a buyer for software that arranges ads on radio programs. Google will stop selling radio ads by 31 May and focus instead on online streaming audio, according to a blog posting yesterday.

It was the second time in two months that Google had killed a programme meant to expand its advertising business offline, suggesting that the appeal of Google's automated model for selling ads may be far more limited than the company once hoped.

The move illustrates Google's failure to parlay its dominance in internet-search ads into offline media. The company said last month that it would close a business that sold ad space in newspapers. Google spent $102 million in cash for DMarc and agreed to pay as much as $1.14 billion in later installments depending on performance. (See: Google cancels print ad programme)

The company had planned to revolutionise the way radio ads were bought and sold. In 2006, CEO Eric Schmidt said he foresaw a day when Google would have more than 1,000 employees serving a thriving radio advertising business.