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MARKETS LIVE BLOG:

STOCKS SLIDE AFTER META'S REALITY CHECK, DOWNBEAT GDP

U.S. first-quarter GDP report prompts inflation, growth concerns among investors

Google Will Kill Its TV Advertising Business

Jim Edwards

Google has decided to pull the plug on Google TV Ads, its five-year attempt to convert the cable and broadcast TV industry into selling its available ad inventory on an online ad exchange.

The news comes on the same day that Google was rumored to be exploring the sale of the TV set-top box unit of its Motorola Mobility unit.

Conversely, Google is plowing ahead with its Google Fiber experiment, which brings superfast internet access—and possibly pay TV—to people in Kansas City.

The move comes eight months after it signed up Cox Media as a partner, bringing the network to 42 million households. The network included Dish Network, DirecTV, VerizonFiOS, and Viamedia.

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Google TV is unaffected.

The death of Google TV ads is a huge victory for the broadcast and cable networks, who are fighting an epic war against the web, which threatens to turn traditional TV viewing into the newspaper business of the 21st Century.

NBC, for instance, snubbed Google back in 2010 after flirting with the idea of offering inventory via the search giant.

Google TV Ads was the third major attempt to start an online electronic exchange for TV ads, all of which have been rendered extinct by cable and network TV's refusal to allow any programming inventory to be sold on them. (The other three were SpotRunner, Malibu Media and Walmart.)

Microsoft also beat a retreat after failing to dent the TV business.

The cablers and the nets aren't stupid: They operate like a cartel, restricting supply of inventory even as demand—and audiences—fall.

Shishir Mehrotra, Google's vp/product for YouTube and video, gave this explanation:

"... video is increasingly going digital and users are now watching across numerous devices. So we’ve made the hard decision to close our TV Ads product over the next few months and move the team to other areas at Google. We’ll be doubling down on video solutions for our clients (like YouTube, AdWords for Video, and ad serving tools for web video publishers). We also see opportunities to help users access web content on their TV screens, through products like Google TV."

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