Having already gotten out of the newspaper ad business, the Wall Street Journal reported today that it's also getting out of the radio ad business. Jessica E. Vascellaro writes:
... radio tripped up Google. The company is pulling the plug on its attempt to automate radio-ad sales on May 31, exposing how far Google is from its goal of grabbing a big chunk of the multibillion-dollar business of off-line ad sales. ΒΆ A look at what went wrong shows that Google misjudged the capacity of its technology to work beyond the Web, and underestimated the human side of the business. Radio stations refused to turn over airtime to a computer algorithm that set prices far lower than their own rates. Big advertisers steered clear.
Link: Wall Street Journal. The radio industry, for some reason not enthused about the "dollar a holler" financial return, didn't buy in.
For more analysis, see Charlene Li, Why Google's One-Trick Pony Struggles to Learn New Tricks. She writes:
But Google faces a tough situation in that, in 2008, 97% of its revenues come from Web advertising, and 68% of that advertising is on its own Web sites. That's down only slightly from 69% in 2007. This is a problem because while Google has been on a torrid growth pace for the past few years, it's essentially a one-trick pony: search advertising. Make no mistake, it's a very nice trick, but one that has little upside outside of organic growth. And Google isn't likely to grow much more in search advertising given its dominance, especially in advertising-rich markets like the United States.
Link: Harvard Business Publishing. --Dennis
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