Google Inc. will stop selling ads on broadcast radio stations this spring, marking the Internet search leader’s latest flop in off-line media.
The retreat announced Thursday is just the latest example of how the recession has caused even highly profitable companies like Google to reassess their priorities and toss out the deadwood.
The impending closure of the radio ad service extends a series of cost-cutting measures that have signaled Google’s management is bracing for leaner times after years of robust revenue growth that enabled the Mountain View-based company to spend freely and gamble on new ventures.
Google’s other austerity measures have included abandoning an ad program for newspapers, shutting down several unprofitable online services and jettisoning company contractors as well as at least 100 full-time employees.
As many as 40 more workers could be laid off after Google pulls the plug on the radio ad service at the end of May. Google currently has about 20,200 employees.
Emboldened by its dominance of the Internet ad market, Google expanded into broadcast radio three years ago with the purchase of a service called dMarc for more than $120 million. The company could have been obligated to pay an additional $1.1 billion if certain financial targets had been hit, but the push into radio evidently didn’t pay off.
“While we’ve devoted substantial resources to developing these products and learned a lot along the way, we haven’t had the impact we hoped for,” Susan Wojcicki, Google’s vice president of product management, wrote in a company blog.
About 1,600 radio stations had been participating in the program, according to Google.
Instead of trying to place ads on broadcast radio, Google said it will try to deploy some of the technology for audio streamed on the Internet. The company will try to sell the part of the operation that automated the process of placing ads on broadcast radio.
Although it’s exiting newspaper and broadcast radio advertising, Google will still try to distribute television commercials designed to appeal to viewers’ individual interests. NBC Universal, Bloomberg TV and Hallmark Channel are among the networks participating in the television ad service, which Google started in 2007.
Google’s inability to diversify has left the company dependent on Internet advertising, which accounted for virtually all of its $21.8 billion in revenue last year. Even so, the company remains well positioned to grow for years to come because advertisers are expected to steadily increase their online spending to connect with customers migrating to the Internet from print publications, radio and TV.
Apple and Google Face UK Investigation Into Mobile Browser Dominance
Apple and Google aren't giving consumers a genuine choice of mobile web browsers, a British watchdog said Friday in a report that recommends they face an investigation under new U.K. digital rules taking effect next year.
The Competition and Markets Authority took aim at Apple, saying the iPhone maker's tactics hold back innovation by stopping rivals from giving users new features like faster webpage loading. Apple does this by restricting progressive web apps, which don't need to be downloaded from an app store and aren't subject to app store commissions, the report said.
"This technology is not able to fully take off on iOS devices," the watchdog said in a provisional report on its investigation into mobile browsers that it opened after an initial study concluded that Apple and Google effectively have a chokehold on "mobile ecosystems."
The CMA's report also found that Apple and Google manipulate the choices given to mobile phone users to make their own browsers "the clearest or easiest option."
And it said that the a revenue-sharing deal between the two U.S. Big Tech companies "significantly reduces their financial incentives" to compete in mobile browsers on Apple's iOS operating system for iPhones.
Both companies said they will "engage constructively" with the CMA.
Apple said it disagreed with the findings and said it was concerned that the recommendations would undermine user privacy and security.
Google said the openness of its Android mobile operating system "has helped to expand choice, reduce prices and democratize access to smartphones and apps" and that it's "committed to open platforms that empower consumers."
It's the latest move by regulators on both sides of the Atlantic to crack down on the... Read More