Google Will Sell Radio Ads for Clear ChannelAbout Author:

By Don Jeffrey and Adam Satariano

April 16 (Bloomberg) -- Google Inc., the most-popular Web search engine, agreed to sell advertising time for more than 675 U.S. radio stations run by Clear Channel Communications Inc.

The accord lets advertisers bid on Clear Channel radio spots through Google's online ad-sales system, according to a statement today from the two companies. Google will target companies that typically advertise on the Internet, not radio.

The agreement is Google's biggest since it bought DMarc Broadcasting Inc. in January 2006 to help crack the $18 billion radio ad market. With DMarc, Google got software that helps companies place and track radio ads. That technology will help Clear Channel, the largest U.S. radio broadcaster, tap a new group of advertisers.

``It's a good win for Google from the standpoint that Clear Channel is the big kahuna of the radio world,'' Martin Pyykkonen, an analyst with Global Crown Capital in San Francisco, said in an interview. ``It remains to be seen whether Google will be better than their other media buyers or just one more player in the offline world.''

He rates Google shares ``overweight'' and doesn't own any.

Good for Clear Channel

``It's certainly a positive for Clear Channel,'' David Bank, an RBC Capital Markets analyst in New York, said in an interview. ``There'll be some incremental revenue but we don't know how much.'' Bank rates Clear Channel ``outperform'' and doesn't own the shares.

Google will sell less than 5 percent of San Antonio-based Clear Channel's ads on U.S. stations, Clear Channel spokeswoman Michele Clarke said. Financial terms weren't disclosed.

Clear Channel plans to start making broadcast time available for the ads on almost all its U.S. radio stations, including in Los Angeles and New York, by the end of June.

Spots throughout the day will be sold through Google, Clarke said, including morning drive time, when audiences tend to be the largest. Each spot offered will be 30 seconds long.

Advertisers will be able to choose markets and stations by format type, though not specific stations, Clarke said.

XM, EchoStar

Shares of Mountain View, California-based Google rose $7.98, or 1.7 percent, to $474.27 at 4 p.m. in Nasdaq Stock Market composite trading. They have gained 3 percent this year. Shares of Clear Channel rose 11 cents to $36.35 on the New York Stock Exchange and have risen 2.3 percent this year.

The agreement helps Google as it expands beyond the Internet to radio, television and newspapers. ``Clear Channel is taking a segment of their advertising and making it available to Google,'' company spokesman David Krane said by telephone from Las Vegas.

Google last year signed a deal with XM Satellite Radio Holdings Inc. to sell spots to Web search advertisers. It has also agreed to sell time for radio broadcaster Emmis Communications Corp.

``It's pretty small potatoes right now,'' Patrick Walsh, the Emmis chief financial officer, said today at an investor conference hosted by A.G. Edwards & Sons. Google accounts for less than 1 percent of sales, he said. ``We'll look very closely at what Clear Channel is doing.''

Earlier this month, Google said it would sell advertising on EchoStar Communications Corp.'s Dish satellite-TV service. Customers will bid for ad slots across EchoStar's 125 channels and can choose when and where their ads appear.

In November, Google said it would test sales of advertising space in 50 U.S. newspapers.

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