The search giant said on Tuesday that it will pay US$102 million in cash for DMarc Broadcasting, a Newport Beach, California-based company that works with radio advertisers in the sales, scheduling, delivery and reporting of radio ads.
The deal calls for Google to make additional cash payments based on product integration, net revenue and advertising inventory targets. Those payments could total US$1.13 billion over the next three years, Google said.
Google plans to integrate DMarc technology into its AdWords platform, creating a new radio ad distribution channel for Google advertisers.
"Google is committed to exploring new ways to extend targeted, measurable advertising to other forms of media," Tim Armstrong, Google's vice president of advertising sales, said in a release.
The Mountain View, California-based search company has been expanding its advertising business beyond the Internet, branching out into print ads and possibly into television.
Google's stock climbed US$1.23 to US$467.48 a share on Tuesday, and analysts were pleased with the company's new buy.
"We believe this acquisition provides further evidence that Google is serious about extending its AdWords platform beyond Internet media," Imran Khan wrote in a research report for JPMorgan Chase. "We believe Google's efforts to extend its advertising model into traditional media could pay off over the longer term."
While online advertising is growing faster than other forms, radio and print advertising in the United States is expected to reach US$25 billion and US$78 billion in 2010, respectively, according to JPMorgan analyst Spencer Wang.
Robert Peck, an analyst at Bear Stearns, said he expects Google to make investments in advertising in local television and business papers, which could enable Google to become a one-stop shop for all types of ad sales and help it diversify from its dependency on cost-per-click ads.
"Additionally, this will allow Google to appeal to a broader set of advertisers, including CPGs (consumer packaged-goods companies) and other Fortune 1,000 companies who may have been reluctant to work with Google in the past," Peck wrote in a research report.
CNET News.com's Elinor Mills contributed to this report.
