Google and EchoStar in TV Ad Deal

As part of its previously stated plan to expand into television advertising, Google Inc. has signed a multi-year deal with EchoStar Communications Corp. to sell ads for the company's Dish satellite network.

EchoStar plans to turn on the system Google is developing to automate the process of buying and selling ads on Dish's 125 national satellite networks in May, EchoStar spokeswoman Francie Bauer said Tuesday. "We're testing it right now," she added.

EchoStar will make available a "significant amount of [ad] inventory" to Google, which will in turn sell it to advertisers using its automated system.

Google executives have previously acknowledged that the company is developing an ad system for television designed to extend to this market the granular ad targeting and effectiveness tracking of its popular search engine ad system. Google is also attempting to do this for the radio and print advertising markets.

In its online ad system, Google matches ads to the topic of queries on its search engines and to the topic of third-party Web sites that participate in its ad network. Thus, at least in theory, users see ads that are contextually relevant to what they are searching for or to what they are reading.

In Google's most popular ad format, called pay per click, advertisers pay only when users click on their ads. This, Google maintains, provides ad campaigns that are more cost-effective and easier to refine. Furthermore, advertisers decide how much they are willing to pay whenever someone clicks on their ads through a keyword auction system.

Google's CEO Eric Schmidt has said repeatedly that his company has the potential to revolutionize offline advertising by introducing to it the benefits of its automated online ad system. It remains to be seen if Google will in fact be able to translate these benefits to these other ad markets.

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