Google continues to expand its efforts to get away from being a revenue one-trick pony. A recent result of these efforts is the announced partnership with Omnicom who will be using Google’s ad exchange to purchase display ads for their clients.
With Apple having some reception issues (nothing a roll of duct tape can’t fix though) and suffering the slings and arrows of a bored press that is looking to make someone a target and then deem it news, Google is doing pretty well. Motorola’s Droid X rolls out today and Verizon reports that it is gaining in market share even without the iPhone in its stable of smartphone offerings. As the Wall Street Journal reports this new Omnicom deal is more reason to celebrate.
Under the deal, Omnicom, part of New York-based Omnicom Group Inc., is expected to spend hundreds of millions of dollars to buy display ads for its clients through Google over the next two years, said a person familiar with the situation. In return, Google will work with Omnicom to build a global “trading desk” that allows the company to buy display ads more easily on Google’s ad exchange, an auction-like system that matches ad buyers and sellers to advertising space across large groups of websites.
Omnicom says it was already buying ads on Google’s exchange using its own technology system.
As part of the deal, Google, which reports second-quarter earnings Thursday, will provide analytics services to Omnicom to help it understand how its display ads are performing, the companies said.
There are the typical concerns that by committing to one company like this (although there is no contractual restrictions as to who either side could work with in addition to one another) then Omnicom could ‘alienate’ other companies like Yahoo or Microsoft.
Such partnerships also could create tensions among other parties with which the advertising and Internet companies do business. “If you get in deeper with Google, then someone like Microsoft [Corp.] might be less likely to work with you, or Yahoo might be less likely to work with you,” said Michael Brunick, vice president of technology at Interpublic Group of Cos.’ digital-ad unit Cadreon. “Ultimately, we want everything we buy to be in the best interest of the campaign. If you are stuck filling a commitment, that may or may not be in the client’s best interest.”
OK, here’s what I have to say to that. What is this, middle school?! Does this really happen in business at this level. The “I’m not going to talk to you because you talk to them!” is usually reserved for hormonally imbalanced teens not multi-billion dollar corporations. Geesh. Just imagine how much incremental income could be made by others who pick up the business from Omnicom that can’t be run through Google for whatever the reasons. If everyone would stop acting like children there would be good business to be earned out there.
Anyway, I know I am dreaming here because people are people and they make weird business decisions that are more emotional than logical (another term for this kind of person is a stockbroker).
The bottom line here is that Google continues to diversify. It shouldn’t be too long though, before someone cries foul and says that Google is doing too much to grow the economy and create jobs (I do hope you picked up on the sarcasm there).
Where else should Google go to diversify and become more than just a search company? We will hopefully learn more today as Google reports earnings and tells the world what else it may have up its sleeves.