BigShinyThing

At the end of last year, there were excitable stories flying around that Google were looking for an ad agency. Nothing seems to have come of this yet but Tony Gentile on his blog Bzzhit, uses to the story to muse on Google’s relationship with advertising. “To date, Google has primarily been seen as a competitor to Overture in the search-related advertising space. However, with the Yahoo! acquisition of Overture, Yahoo! now has the opportunity to market additional advertising services (across all of Yahoo!’s properties) to Overture’s base of 100K+ advertisers.

Google doesn’t have a comparable offering… but a strategic partnership with (or acquisition of) a respected advertising agency would give them the ability to co/cross-sell advertising services, influence spend allocation in a multi-channel marketing strategy, etc.

Just as Overture and Google work hard to grow their $20/mth self-serve advertisers into $25k/mth “super diamond” accounts, the ability to provide a one-stop shop for advertising services is too tempting for either company to ignore indefinitely. Remember, in as much as both of these companies are focused on end-user lock-in through services like Google Desktop Search, both must also think about advertiser lock-in through differentiated advertiser service offerings.”

Google can certainly afford an ad agency - today it was revealed that the company is building a £4bn war chest for a spate of acquisitions. Google already had $2.95bn (£1.65bn) in cash and cash equivalents as of June 30. Lauren Rich Fine at Merrill Lynch is quoted on Brandrepublic as saying that possible targets were Chinese internet company Baidu.com (already touted as the Chinese Google), struggling PVR company TiVo, and internet search and mobile phone services company InfoSpace.