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Advertising - Tuesday, January 17, 2006

Google Pays $102M for dMarc Broadcasting

Newport Beach-CA-based digital radio company dMarc is guaranteed $102M in cash but if product integration, net revenue and advertising inventory targets are met over the next three years, the sellers could make as much as $1.136B.

This is the third big online ad deal for brothers Chad and Ryan Steelberg. They previously founded AdForce, an online advertising network that went public and was later acquired by CMGI in 1999 for $500M. They also founded 2CAN Media, which became the 3rd largest ad network on the Internet. They also sold this company to CMGi, this one for $50M.

The origins of dMarc came in October 2004, when dMarc Broadcasting paid $29M for Scott Studios and Computer Concepts, as well as the broadcast assets of dMarc Networks, the leader in broadcast data services.

It is unclear to us at this point who are dMarc Broadcasting's investors: they just indicate that the company's funding was "led by tier-one investors, including a multi-billion dollar US investment firm and strategic corporate partners."

dMarc sells a number of products to manage radio station operations, including the product below which manages play lists. It is unclear what Google will do with these ancillary products as its stated goal is to create "a new radio ad distribution channel for Google advertisers."

A dMarc Product That Manages Radio Playlists

For the a:c, the deal is interesting because it is the first time in a while that one of Google, Yahoo, MSN or AOL has acquired an ad agency - the recent trend has been to acquire product functionality.

Read - Google to buy radio-ad provider (Marketwatch)