Business Software

Google: Not the King of All Media

A few years ago, Google made a play to become a one-stop shop for companies seeking to purchase all types of advertising--online, print, radio, and television. Some people worried about the impact Googlization would have on the entire ad industry. What if Google did to TV, radio, and newspapers what it had already done in dominating online?

There was reason for concern because, as we all know, Google is, was, and shall remain a media company pretending to be a technology company. That is an important thing to remember: Google has yet to create a big moneymaker that isn’t tied to search-related revenue.

This month, Google is getting out of newspaper advertising sales and on May 31, it will quit radio time sales as well, leaving 40 employees without work. The flushing sound you hear is what remains of the $106 million Google paid to purchase the dMarc Broadcasting advertising network back in 2006 at the start of its radio misadventure.

In last week’s announcement that it would leave radio, Google made face-saving noises about selling ads in streaming programming, but if they were really serious about it the 40 soon-to-be ex-Googlers might still have their jobs.

This is not the worst example of what happens when a search company tries to play radio. In 1999, Yahoo paid $5.7 billion (in stock) for Mark Cuban’s Broadcast.com and never made the investment pay off.

People used to be afraid that Google would end up controlling vast swaths of other mediums. It’s already failed in newspaper and radio.

My guess is they are holding onto TV sales as part of the face-saving plan. Or maybe they think the TV investment might someday be worth something. It probably won’t, but Google still has money to burn, albeit much less that it used to.

The moral of this story is that even mighty Google can be slapped down. It also reminds us that when a company gets away from its core competency then trouble often looms, especially in a no-longer-buoyant economy where it is more difficult to hide one’s mistakes.

My bet is that the down economy will reveal Google to be a pretty run-of-the-mill company when it gets away from its core business of selling advertising based on people’s searches. And I think that business is starting to show cracks as new technology appears on the horizon even as Google’s search results become less useful over time.

David Coursey has been writing about Google since the beginning and remains only mildly impressed. Write him at david@coursey.com.

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