New York — Just days after halting developments to some of its unpopular services, search engine titan Google Inc., said on Tuesday applied another brake to its Newspapers Print Ads program starting from next month, scoring another cutback for the company in the face of a slumping economy.
The program, initially announced in 2006 with 50 newspaper partners and later expanded to 800, was intended to help newspapers to discover more ways to increase their earnings from Internet ad sales at a time when their print ad sales were falling is slated to end Feb. 28, according to a blog posting by Spencer Spinnell, director of Google’s print ads.
“While we expected that print ads would produce a new source of income for newspapers and build more relevant advertising for consumers, the product has not created the impact that we and our partners wanted,” Spinnell wrote.
For Google, which has developed its gigantic reputation as a master of the online advertising business, hence shutting down the print program is a rare failure. The ad sales will continue until March 31 for customers who already had campaigns booked.
“We were not giving a significant revenue impact to our newspaper partners so we are focusing our efforts on how we can do that quickly and effectively using online tools,” Google spokesman Brandon McCormick said.
The program, which had pulled in more than 800 U.S. newspapers since it was rolled out, seems like both Google and newspapers are wrestling with a poor advertising market worsened by the world financial crisis. Google said last week it would lay off 100 full-time recruiters and close three engineering offices.
“Some advertisers have seen good results,” Spinnell wrote on the company blog. “But as we grow, it is important that we focus on products that can benefit the most people and solve the most important problems.”
Google’s plan was to be an ad broker for newspapers to help them fill their remainder ad space, and then share the revenue. The concept was that Google could get some of its hundreds of thousands of online advertisers to consider newspaper advertising, many of whom had never marketed their products in print.
At that time it was a golden opportunity for Google to diversify its business, which depends almost entirely on online advertising revenue. But in the end, however, the idea faded away and only few advertisers wanted to shift to newspapers.
Spinnell said that a team at Google will continue to look at how they can help newspaper companies, which are undergoing a major retrenchment because of declining advertising. The decision to close print does not impact other offline advertising initiatives in radio and television advertising, according to a company spokesman.
Google’s print ad partners included many of the biggest U.S. newspaper publishers, such as New York Times Co., Washington Post Co., Gannett Co. and Tribune Co. The program took bids from advertisers for newspaper space, with Google getting a cut of the sale. The company’s goal was to make print ad prices more fluid, letting publishers charge rates that better reflect demand.
A Google spokesman declined to state how much money the search engine company and its newspaper partners expected to make from Print Ads.
“It is a very little part of our revenue stream,” said New York Times spokeswoman Catherine Mathis.
Under the provisions of the Print Ads program, Google AdWords customers could place newspaper ads in the same way they buy Web page, radio or TV ad space.
Google remains “dedicated to working with publishers to develop new ways for them to earn money, distribute and aggregate content and attract new readers online,” its blog post said.
It is still not apparent what effect this would have on an advertising consortium that Yahoo has with hundreds of newspapers. Many papers are members of both Google’s and Yahoo’s groups.
The company said last week it would relocate 70 engineering employees from its offices in Austin, Texas; Trondheim, Norway; and Lulea, Sweden, in a cost-cutting move.
Google, based in Mountain View, California, already dragged down its shares with the broader market, fell 5.65 percent to close at $282.75 on the Nasdaq stock market.