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Google Shuts Down Radio Advertising Venture in Irvine

Another company built by Newport Beach’s Steelberg brothers is being shut down a few years after it was sold to a big name for big bucks.

Earlier this month, Google Inc. said it’s shedding an unprofitable business it built around a company bought from Ryan and Chad Steelberg in 2006.

Google said it’s looking to exit its radio advertising business because it did not “have the impact we hoped for,” according to a Google blog post.

“Ryan and I are disappointed in Google’s announcement of its decision to shut down the audio broadcast division,” Chad Steelberg said in a statement. “DMarc Broadcasting’s technology and business formed the backbone of the Google audio services for both traditional and online advertisers.”

Google got into the business three years ago with its buy of Newport Beach’s dMarc Broadcasting Inc.

The company paid an initial $102 million for dMarc, with provisions that it could pay up to about $1 billion if goals were met. It’s still unclear how much Google ended up paying in all.

It folded dMarc into a division called Google Radio and moved it into its offices in Irvine in 2006.

Google said some 40 workers would see job cuts, according to the report.

It was unclear how many are from the Irvine offices, where the company’s Google Radio efforts were based.

DMarc was the brainchild of the Steelbergs, a pair of serial entrepreneurs.

Started in 2002, dMarc offered software and computers to radio stations that wanted to send targeted messages to listeners via radio waves.

The system allows stations to more easily schedule and deliver ads and keep track of when they air.

After the acquisition, Ryan Steelberg became head of radio operations and Chad Steelberg general manager.

The two stepped down from their posts at Google in early 2007.

DMarc was the Steelbergs’ third major venture together,and the second they sold to a big tech name that later closed the business.

In 1999, the Steelbergs sold AdForce Inc., a Web advertising company they started in Costa Mesa in 1995, to CMGI Inc. for $500 million. CMGI, now ModusLink Global Solutions Inc., closed AdForce in 2001.

While the brothers’ businesses didn’t have staying power, the Steelbergs proved to have a knack for timing, selling them at peak times.

The duo had less luck with Winfire Inc., a high-speed Internet provider the brothers started in 2000.

Winfire created a buzz with its catchy free digital subscriber line service. The company folded six months later amid troubles getting phone lines and high set-up costs.

The Steelberg brothers said they “remain committed to developing and investing in innovative and accountable advertising and media solutions.”

They now run Irvine-based Brand Affinity Technologies.


Ericsson Deal

Aliso Viejo-based Networks in Motion Inc. is a technology startup that’s defying the recession.

The company, which makes navigation and local search software, signed a deal with Sony Ericsson Mobile Communications AB, one of the top three cell phone makers.

Terms of the deal weren’t disclosed.

NIM, as the company is called, is set to provide location-based services for users of Ericsson phones.

Cell phone carriers will be able to offer their own versions of NIM’s phone navigation services.

For Verizon Wireless, a unit of New York’s Verizon Communications Inc., the software is called VZ Navigator on its mobile devices.

The software offers directions, 3-D maps and local searches for stores, restaurants and other points of interest.

Optional services include traffic updates, movie show times and weather forecasts.

“More GPS-enabled handsets will ship this year than personal navigation devices for the first time, pointing to the tremendous acceptance of mobile phone navigation and associated location-based services,” Chief Executive Doug Antone said.

NIM saw 2008 sales of $40 million, more than double the $16 million it posted in 2007.


Chip Slump Persists

Those hoping for a first-quarter chip industry rebound will have to wait longer.

“This has been the fastest and most severe downturn in chip history,” analyst Mehdi Hosseini at Friedman, Billings, Ramsey & Co. said in a research note.

For the current quarter, average foundry wafer shipments,or the number of chips being produced at chip plants,is expected to be down 40% from the fourth quarter.

Chips designed by Irvine’s Broadcom Corp. follow the pattern,the company’s first-quarter production at contact plants is expected to be down some 35% to 40% from the fourth quarter. That’s worse than analyst Hosseini’s previous forecast of a 20% quarterly decline.

The good news is that the dismal first quarter may be the bottom.

“We believe that first quarter shipments will likely mark the trough quarter for most chip firms and for the industry,” Hosseini said.

Second-quarter chip shipments are expected to be flat to up 2% from the first quarter.

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