Advertising is, indeed, the lifeblood of the Internet. It keeps free services free, and keeps pay services low-cost. Sitting through a bit of advertising is the price many of us pay for many of the services we use and enjoy online, so keeping it running is worth noting. Earlier today, a report emerged that Google (News - Alert) was doing its part by buying advertising startup Wildfire, a service that helps marketers keep better track of their social media presence.
Google reportedly purchased Wildfire for $250 million, and managed to seize up the site from major competitors like Facebook (News - Alert), who was previously seen as the leading competitor to get Wildfire. This wasn't Google's first attempt at augmenting its advertising capabilities, when earlier it had attempted to buy Buddy Media (News - Alert). The Buddy Media deal was lost to Salesforce, who picked the company up for fully $700 million.
Wildfire describes itself as “an easy-to-use yet powerful tool to grow, engage and monetize your audience on Facebook, Twitter, YouTube and LinkedIn (News - Alert)”, which is indeed a pretty powerful tool. For the kind of money Google put into it had better work, but considering Google's already impressive reach and advertising clout, it's a fair bet that it does.
Interestingly, this report comes in fairly shortly after recent word that YouTube (News - Alert) was looking to step up its investment in original content on its streaming video systems. Wildfire grows and monetizes YouTube audiences. YouTube is looking to be more attractive to audiences, and potentially grow that way. Multiple growth vectors plus monetizing that growth sounds like a recipe for success on Google's part. It helps that, by some reports, YouTube is already a growing concern, putting out four billion hours of video a month most recently up from three billion hours earlier this year.
Whether Wildfire proves to be worth Google's impressive investment remains to be seen. But the fundamentals of the arrangement seem to be well in place, even if it's going to take a lot of return to match the investment they've put into this whole thing so far.