By Miguel Helft, NYT
Following its conquest of YouTube last year, Google is now aiming for a piece of the old-fashioned tube.
The Internet search giant will begin selling television ads on the 125 national satellite programming channels distributed by EchoStar Communications' DISH Network.
The agreement is Google's latest foray into offline media, and it underscores the company's ambition to bring its wildly successful online advertising technology and auction-based pricing to new markets to continue fueling the company's rapid growth.
Google's online advertising technology has appealed to advertisers in large part because it allows them to aim ads effectively at specific audiences and users, and to measure the performance of those ads quickly. The company hopes it can bring those forces to old-line media.
"We think we can add value to this important medium by delivering more relevant ads to viewers, providing better accountability for advertisers and better monetize inventory for TV operators and programmers," Google's chief executive, Eric E. Schmidt, said in a statement announcing the EchoStar partnership.
Last year, Google began tests to sell radio spots and newspaper ads. Those tests have been inconclusive so far, and some analysts say the company needs to show investors that it can succeed in a market other than Internet search and advertising, which accounts for the bulk of its revenue.
"For Google to maintain its current momentum, it needs to become the king of something else beyond search, or play a meaningful role in a market that is much larger than the $16 billion online advertising market," said Jordan Rohan, an analyst with RBC Capital Markets.
For Google, the $70 billion television advertising market offers a potentially lucrative payoff. But Google is likely to encounter some resistance from cable operators with established sales forces, and competition from technology startups that also hope to broker TV ads.
Google's official entry into television advertising has been widely anticipated, and it follows a limited test the company has been conducting since last year with a small Northern California cable system. The agreement with EchoStar, which has about 13 million subscribers, will allow Google to test its system nationwide.