Google to Sell Ads for DirecTV in Effort to Expand Beyond Internet Search

Google Inc., seeking to diversify beyond Internet advertising, will sell some television spots for cable networks carried by DirecTV, the largest U.S. satellite-TV provider.

Google will sell ads for networks including Fox Business, Sleuth, TV Guide and Bloomberg TV, the companies said today in a statement. Financial terms of the deal weren’t disclosed.

Google, which made 96 percent of its $6.82 billion in revenue from Internet advertising last quarter, is expanding to new markets to reduce its reliance on the Web. The deal brings Google’s reach to about 30 million satellite homes, expanding TV-advertising efforts that Google began in 2007 through an agreement with Dish Network Corp.

“In the television space, there’s a lot of room for improvement through technology,” said Mike Steib, Google’s emerging platform director. “In the last three years, our product has evolved from a tool to place an ad on TV to a sophisticated tool for targeting and buying audiences at a scale and a level of specificity that hasn’t been possible before.”

Google can help advertisers reach specific audiences, such as high-income women aged 18 to 49 who may be shopping for insurance, Steib said.

That level of specificity will help DirecTV boost its advertising sales and help lure companies that haven’t previously bought spots on television. About 30 percent of Google’s TV advertisers are new to the medium, Steib said.

‘Strategic Opportunity’

“Historically at DirecTV we’ve been a little under- penetrated in ad sales, and frankly I still think that’s a huge strategic opportunity for us,” DirecTV Chief Executive Officer Mike White said on the company’s conference call last week. DirecTV doesn’t break out its advertising sales, only saying the unit grew almost 20 percent in the second quarter.

“We have a strategy on multiple fronts to increase advertising through technological advances,” Cara Brugnoli, a spokeswoman for DirecTV, said today in an e-mail. “This particular announcement is certainly about increasing ad revenues, but it is more specifically about selling inventory that otherwise wouldn’t be sold.”

Google, based in Mountain View, California, fell $11.97 to $491.74 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have declined 21 percent this year. DirecTV, based in El Segundo, California, lost 63 cents to $38.80.

Bloomberg TV is owned by Bloomberg LP, which is also the parent of Bloomberg News.

To contact the reporter on this story: Kelly Riddell in Washington at kriddell1@bloomberg.net

Aug. 11 (Bloomberg) -- Google Inc. Chief Executive Officer Eric Schmidt has doubled the anticipated pace of acquisitions this year and expects to maintain that rate after some internal projects have failed to spur growth. The company is also diversifying its advertising strategy, reaching an agreement with DirecTV to sell some television spots for cable networks carried by the satellite provider. Bloomberg's Cris Valerio reports. (Source: Bloomberg)