Google in content deal with media companies

The New York Times

Google built an empire delivering advertisements across the Internet,
and now it plans to distribute content from media companies just as
aggressively.

Google is working with Dow Jones & Company, Conde Nast, Sony BMG Music
Entertainment and other large content companies to syndicate their
video content on other Web sites. The videos appear inside Google ad
boxes on sites that are relevant to the content of the videos, and
advertisements run during or after the content. Google shares the ad
revenue with the video provider and with the sites that show the
videos.

There are already video ad networks that make similar deals, and NBC
Universal is attempting something along those lines. But the Google
experiment could be more widespread because the company already has a
vast reach on the Internet.

"Once upon a time, if you had some video content that you wanted to
distribute, you could do it on three television stations in the days
of the networks, then 100 in the days of cable," said Kim Malone,
director of online sales and operations for Google AdSense. "Now,
thanks to this program, you can do it on literally millions of
channels on the Internet."

On the financial news site StreetInsider.com, for example, videos from
The Wall Street Journal, a Dow Jones property, are running within ads
on the site. In one, Emily Friedlander, a Wall Street Journal
reporter, narrates a video feature on the TKTS booth in Times Square;
Sam Schechner of The Journal speaks about marriage in TV shows; and
Jonathan Welsh visits a motorcycle show.

After the three videos, a commercial from Pantene Pro-V, a hair
conditioner, appears. In that case, Google shares the ad revenue with
StreetInsider.com and Dow Jones.

The videos and the accompanying ads can also be found on articles on
YoungMoney.com, AdVersus.com and SeatGuru.com, among other sites. A
ski resort show created by LX.TV, a broadband network, is being shown
with ads on skiing blogs.

The ads are part of Google's larger initiative to gain traction with
consumer goods companies that spend billions on brand advertising.
Founded as a text-based search company, Google's early advertisers
were smaller companies and advertisers that bought ads to generate
direct sales rather than to build brand recognition.

Large brand advertisers still spend the bulk of their money on
television advertising, but Google sees potential for them to spend
more online through the use of video ads.

But Google's broad plan to bundle media content with ads depends on
participation from media companies. On the one hand, Google's network
will bring more visibility of their content across the Internet, where
attention is fragmented online among thousands of sites. On the other
hand, media companies like to be a destination in their own right, so
that they can sell ads on their sites.

"We want people to come directly to our site, but that's part of why
we're doing this," said Sarah Chubb, president of CondeNet, the
digital arm of Conde Nast. "To see if we can find people that we
haven't found in other ways."

Media companies also want to keep control over their relationships
with advertisers. Google sells ads in its network for Conde Nast
videos, but in a similar content-ad test with MTV Networks last fall,
MTV sold the ads (sharing the revenue with Google).

Adam Cahan, executive vice president of strategy and business
development for MTV Networks, said that his networks want to make sure
that when their content is distributed on the Web, it links to their
sites.

"In the same way that Harry Potter book sales grow from a Harry Potter
movie, you would not give the movie away to support the book sales,"
Mr. Cahan said. "There is a balance between promotion and consumption
that is up to the original content producer to manage."