Google will make foray into radio

Google Inc., which dominates the market for Internet search advertising, said it would break into radio ads with an agreement to buy DMarc Broadcasting Inc. for as much as $1.24 billion.

Google will pay $102 million in cash for closely held DMarc, whose software helps companies place and track radio spots. Additional payments of as much as $1.14 billion will follow if sales meet targets over the next three years, Mountain View, Calif.-based Google said yesterday.

The purchase gives Google technology to offer its clients ads on the radio in addition to those sold online with search results. Google is trying to replicate its success with Web advertising in other markets, potentially shaking up the way advertising is bought and sold.

''It offers a move toward greater efficiency in the traditional media market," said David Bank, an analyst with RBC Capital Markets in New York.

DMarc, based in Newport Beach, Calif., helps companies place spots on more than 500 radio stations across the United States, targeting specific markets with individual ads. The company's software can also track when and where the spots are played.

A new version of the software that allows companies to submit and buy ads directly over the Web will be released with Google, said Ryan Steelberg, DMarc's president. Google then plans to integrate that product with its AdWords service that creates online auctions to sell ads.

''You're going from a seller dictating the price to a purer form of buyers dictating the price," Bank said.