Google, BSkyB strike Online Ad deal

Google Inc., has agreed to team up with British satellite broadcaster BSkyB to organize the Internet Company’s suite of search, advertising and video functions on Sky’s broadband service. The revenues generated from advertisements aimed at the satellite television company’s broadband customers will be shared between the two companies.

BSkyB Chief Executive James Murdoch said the broadcaster would launch an online user-generated video-sharing site, its own e-mail service and a search portal. All this will be done by using the technology provided by Google.

Google will also provide access to applications such as contact management and calendar services as well as instant messaging. It has also been mentioned that Sky will examine VoIP services in the future.

The financial terms of the deal were not discussed by either firm.

Eric Schmidt, chairman and chief executive of Google, yesterday said in London that the deal with BSkyB, which follows Google’s purchase of YouTube, the video-sharing website, is not exclusive but is the first of its kind.

“We have been looking for a partner to take the innovation we have done on our own site and extend it to broad- band customers," he said during a meeting with journalists, adding that the partnership would be a "framework for other global deals.”

If this deal proves to be successful Schmidt will talk to other British companies about signing similar deals as he said, “We want to make sure this works first, if we can get this right, it becomes the index for every country we work in.”

Murdoch said, “The U.K. marketplace has been unique in terms of the pace of online ad take-up, the pace of broadband take-up and technological development.”

Rupert Murdoch's News Corp., which is already linked with Google owns 39 per cent of BSkyB. The first services under Google's deal with Sky are expected to appear next spring.