Please don’t buy stake in Clear Channel, Google |
As a GOOG investor, I don’t want to see Google buying a stake in the current incarnation of Clear Channel. Although I wrote terrestrial radio isn’t dead yet earlier this week and believe that, I think Google is better off looking into satellite and internet radio instead as an advertising platform with realistic growth potential.
David Bank, of RBC Capital Markets, issued a note yesterday saying he thinks it would make a lot of sense for Google to take a minority stake in radio, TV and outdoor advertising giant Clear Channel Communications. The idea might seem strange at first, but there are reasons why such a deal could work, according to Bank. Clear Channel is exploring strategic options. And Google may be gearing up to acquire a large chunk of advertising inventory, as part of a plan to expand beyond its core search business.
Adsense for billboards? If you are even remotely, seriously contemplating this just say no, Google. Non-interactive billboards are yesterday. Maybe if they would do billboards with streaming information but then what would that do to traffic-related accidents? I can just see Google getting blamed (sued) for causing major accidents for too much activity on a billboard sign.
Despite being a new listener, I believe satellite has more chance than terrestrial radio and when the day comes that internet is omnipresent, the web will be the place to placeshift audio. Think Slingbox for radio in your car, boat, RV, etc.
RBC Capital Markets David Bank’s opinion aside, I hope Google doesn’t think seriously about buying into Clear Channel at this time. Is there some other reason I’m missing why this would make “a lot of” sense?
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I believe Clear Channel has a stake in XM. There are a few channels on XM that have commercials and Clear Channel provides programming for them. I think Clear Channel was an investor at the beginning of when XM first went live. I will have to do some digging to make sure.
Comment by orangecrush — November 4, 2006 @ 2:53 pm PST
Clear Channel owns 9 channels on XM according to the Wikipedia, orangecrush.
Comment by TDavid — November 4, 2006 @ 3:51 pm PST
I am an employee of Clear Channel Radio and I just wanted to share with you a little information. In fact, Clear Channel does a whole lot of Internet radio…four of the stations in the cluster that I work for are streaming and Clear Channel is actively pursuing making the Internet and the advertising on it a greater and greater source of revenue. Also you should know that Clear Channel in fact owns a pretty good chunk of one of the satellite radio providers…though at this moment I am failing to recall which one it was and I don’t want to provide you with incorrect information.
Also if you look at the big picture of how Satellite Radio has been performing as a business…I think you’ll find that it is failing miserably…and they are considering placing advertising inventory into their subscription service.
I just thought I would correct a little bit of your information.
Comment by Amy Skeats — November 13, 2006 @ 12:00 pm PST
Welcome Amy - did you read the comments above yours? Clear Channel has 9 channels on XM according to the Wikipedia (could be inaccurate, feel free to provide information which tells differently), when XM has well over 100 channels. Does that mean CC owns a “pretty good chunk”? I’m not sure on the financials, just asking?
As for satellite radio “performing miserably” I’m admittedly new to the satellite radio scene, but I see that Sirius keeps gaining paid subscribers. Yes, they are losing money but the equipment charge is very expensive up front. I would count them and internet radio as a more viable advertising options.
Clear Channel offers a few shows on the internet like Jim Rome through the subsidiary Premiere Networks, right? I used to subscribe to that via the internet so I’m aware that they offer some content on the internet.
Lastly, Clear Channel is on the block for sale.
Comment by TDavid — November 13, 2006 @ 12:15 pm PST
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