The Two Edges Of Google’s Sword

Reuters: Google Inc.’s search for revenue beyond its wildly popular pay-per-click advertising system has everyone from publishers to phone companies unnerved by the seemingly endless scope of the Web leader’s ambitions.
Nowhere is this more closely felt than Madison Avenue, where the advertising industry sees Google encroaching on turf ad agencies and media buyers have considered their own for much of the past century.
Seeking to diversify its revenue base, Google has begun offering advertisers a set of free marketing analysis tools to help customers boost how much they spend on text ads carried by or affiliated sites. It is selling ads in print publications and expected to move into branded, graphical ads.
These moves, which some see as competing with systems offered by independent companies and ad agencies themselves, has provoked grumbling among many in the advertising industry.
“From a consumer perspective, Google is all good,” Merrill Lynch analyst Lauren Rich Fine said in a recent note to clients. “However, Google is starting to attract negative publicity (tied to) its foray into other mediums.”
His argument that Google’s encroachment into other businesses, including the large advertising agencies, drove Google shares down 4.7 percent last Monday, its biggest percentage loss in a year.
The stock has since recovered most of its losses, closing at $417.70 on Friday.



About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.