Google Ends Radio-Ad Venture, Layoffs to Follow

Google’s torrid affair with radio advertising ended in tears and broken promises yesterday when they broke off their rocky three-year engagement. This loss follows last month’s downfall of their print advertising campaign, as the Internet giant is finding it hard to maintain that loving feeling.

Google launched Audio Ads and Google Radio Automation back in 2006 in an attempt to create a new revenue stream for broadcast radio. It bought dMarc Broadcasting (a digital solutions provider for radio) for $102 million cash with a view to eventually paying $1.136m if the service took off. The dMarc founders, Chad and Ryan Steelberg, left Google a year after the purchase offer was made due to differences.

After the hefty cash sum was paid, and struggling for three years trying to make things work, Goggle accepted that the end was inevitable. “We haven’t had the impact we hoped for, so we have decided to exit the broadcast radio business and focus our efforts in online streaming audio,” as stated on their corporate blog.

Disabling the radio plan means layoffs in the Google complex. Susan Wojcicki, a Google vice president for product management said, Google would try to find jobs for most of the people involved in the radio ads program but that up to 40 people might be laid off.

“It’s just not making them enough money for the cost,” said Greg Sterling, an analyst at Sterling Market Intelligence. “It speaks to the weakness of the medium itself.”

So even a company as large and ridiculously successful as Google is not immune to this recession. Its first wave of layoffs were last month, with approximately 100 employees let go from the firm’s recruitment department. The company is also possibly weeding out a few applications to save cash such as, Google Catalog Search, Mashup Editor, Google Notebook, Jaiku and Dodgeball.

He also said that the recent cutbacks suggest Google’s efforts to become a multiplatform media company are dormant, considering the end of print ads as well as uploads to Google Video and the closing of its mobile social-networking service, Dodgeball.

Now with the print and radio advertising projects down the tubes it makes you wonder if Google’s television venture will crumble as well. Wojcicki (Google V.P. for product management) said that Google would continue with it’s TV advertising business where they can measure audience response. Google is selling only a limited number of ads on the Dish Network, a few cable networks owned by NBC Universal and a small cable provider in Northern California. But currently they have not reached deals with any major cable companies.

With a company as massive as Google failing in these avenues, the outcome for the future of advertising looks grim. Is this failure due to Google leaving their comfort zone or just the traditional advertising model that refuses to work anymore?

Posted by Trista Orchard in Sci-tech | February 13, 2009 4:58PM |