IP Democracy: Google and Yahoo! Angle for Traditional Ad Dollars

Internet giants Google and Yahoo! are already the driving forces in the Internet advertising business and now both companies are working overtime to apply their ad sales skills to the traditional media world. Google and Clear Channel Radio announced today a multi-year deal under which Google will sell a guaranteed portion of 30-second ad inventory available on more than 675 Clear Channel radio stations under the Google Audio Ads brand name.

Clear Channel (which is, incidentally, in the midst of a high-stakes leveraged buy-out) gets access to a wider pool of potential radio advertisers through its tie-up with Google, while Google, of course, gets a bigger slice of the radio ad revenue pie. Google is definitely going gang-busters on the ad sales front — the big news last Friday was Google’s blockbuster $3.1 billion deal to buy online ad leader DoubleClick, a deal that has spurred Google’s arch-rival, Microsoft, to kick up antitrust worries.

Even as Google gets stronger, yet another Google foe, Yahoo!, is moving to strengthen its own ad sales expertise and, like Google, is trying to grab a share of the traditional media ad market. Yahoo! announced this morning an expanded ad sales deal with a consortium of powerful newspapers. Formed last November, the consortium consists of a major group of newspaper companies (which has now grown to more to twelve companies encompassing more than 264 papers across 44 states, with web sites that attract a combined total of more than 50 million monthly unique visitors) that have the rights to sell recruitment advertising across their sites in combination with Yahoo!-owned HotJobs.

Now, the consortium has formed what it calls the first full-fledged online national advertising network with Yahoo! The newspapers plan to use Yahoo!’s graphical ad technology in selling and targeting ads and managing inventory. Yahoo! and the consortium will also cross-sell each other ads — Yahoo! will sell online newspaper ads and the papers will sell Yahoo! online ads.

The papers will further deploy Yahoo!’s paid search technology and offer customized Yahoo! toolbars. Finally, Yahoo! will incorporate the newspapers’ content in the local news, sports, finance and other sections across the Yahoo! network.

During a conference call to discuss the consortium, Robert Decherd, Chairman and CEO of Belo Corp., predicted that the aggregate value of the deal to the papers will exceed what the companies have generated from the successful partnership surrounding HotJobs, which has generated “significant incremental revenue.”

During the call, the assembled newspaper and Yahoo! executives were asked about the impact of the Google-DoubleClick deal and to what extent these two major developments might collide. Specifically, the questions centered on whether the newspapers would drop any DoubleClick deals as a consequence of the Yahoo! deal or whether the arrangement affects the newspapers’ deals with Google. “The Internet itself is an open environment and we’ll all be flexible in terms of what various vendors have to bear,” Decherd said, basically offering a non-answer to the question.

The only exclusive part of the deal, apparently, is the consortium’s commitment to Yahoo!’s ad serving technology, although it’s not clear that even this exclusivity would bar a Google or Double-Click deal.

Posted by Cynthia Brumfield on April 16, 2007 11:13 AM to IP Democracy