Google to Try Selling Advertisements for Newspapers
Monday, November 6, 2006
Google Inc. is expanding its footprint as an advertising broker with a test program that will allow businesses to click to Google and buy ad space in The Washington Post, the New York Times and other papers, sources confirmed last night.
Google will run a three-month test -- set to be announced today -- that is designed to make it easy for newspaper advertisers to come to the popular search-engine site, find a newspaper they want to advertise in, browse ad rates and buy an ad.
The Boston Globe, owned by the New York Times Co., also will participate in the test, Times Co. spokeswoman Catherine Mathis said last night.
The source confirming The Post's participation spoke on condition of anonymity because the test has not been made public.
Google began brokering ad sales for magazines but has had little success in the space, the source said. The Mountain View, Calif., company has said it also will broker ads for radio and television.
The Google newspaper test was reported last night in the online versions of the Times and the Wall Street Journal, which said 50 U.S. newspapers will take part.
Average national daily circulation of American newspapers has been declining since 1987, as readers move to television, the Internet and other sources for news and information.
Advertising revenue also has been falling, as newspapers lose classified advertising to online sites such as Craigslist.org and some advertisers themselves disappear.
The consolidation of the department-store industry, for instance, has hurt newspapers, as the stores had been reliable advertisers for a century.
Newspaper owners are likely to see the Google test as a way to funnel some much-needed ad revenue to their papers.
Declining circulation and ad revenue and poor stock performance have caused a boardroom rift at the Chicago-based Tribune Co., which has led to the company putting its 25 television stations and 11 newspapers -- including the Baltimore Sun and Los Angeles Times -- up for sale.
Most newspapers have been publicly owned for some time, but Wall Street has soured on the industry, owing to its lack of growth. Private-equity firms are bidding on the Tribune properties; even though newspaper ad revenues are down, the papers still return profits in the 10 to 20 percent range, making them an attractive buy for private owners.