NBC Universal Terminates Ad Deal with Google

NBC Universal pulled the plug on an a two-year-old advertising arrangement with Google, according to a Los Angeles Times report. The search giant had been selling ad space on NBC Universal's Syfy, Oxygen, MSNBC, Sleuth, and Chiller channels.

"We're not currently contributing inventory into the Google marketplace, but we continue to work with Google on multiple projects involving advanced advertising," NBC Universal spokeswoman Liz Fischer said in a statement.

This latest blow to Google's business model underscores exactly what the sultan of search is up against in extending its advertising arm beyond the Web. Since the beginning, NBC Universal only allowed Google to fill advertising space on small channels rather than more established networks, and there reportedly remains a reluctance to fully embrace Google as an ally.

"Any marginal benefit that NBC might have seen was not sufficient to outweigh the much larger benefit of maintaining a relationship with their advertisers," said Greg Sterling, an Internet analyst and the founder of Sterling Market Intelligence.

"Google's point of view is that they bring more to the table than they take away -- whether it be more eyeballs or more revenue. But not everybody sees it that way. Google has become this force sitting between companies like NBC and their customers. These media companies want to have a direct relationship with their readers, TV viewers, and advertisers."

Google still has advertising deals with satellite providers DirecTV and Dish Network, as well as Bloomberg, Outdoor, CBS College Sports, and Hallmark channels, plus two cable channels (Ovation and Tennis) in Santa Monica.