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Media Startups Eye Google Warily

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NEW YORK While WPP Group CEO Martin Sorrell publicly muses whether Google is friend or foe to his company, a group of digital media startup companies are asking themselves the same question.

Companies in disparate businesses from behavioral targeting to buying platforms for radio and TV to affiliate marketing and pay-per-call systems all identified Google as a potential competitor during the UBS Global Media and Communications Conference here.

This is a result of Google's moves into several new markets as its share price keeps climbing, said Bill Gossman, CEO of Revenue Science, a Bellevue, Wash.-based company that targets Web ads to users' prior surfing behavior.

"Search is only about 5 percent of online traffic," he said. "The share of search isn't growing; you can't force people to search."

Instead, Google is branching into Web display ads, video placements, even acting as a sprawling ad platform that lets advertisers run radio and print campaigns.

"Google's growth is starting to peak," said Nick Grouf, CEO of Spot Runner, a Los Angeles Internet-based agency letting advertisers run inexpensive TV campaigns. "That means they have to go in a number of different directions."

One of those, presumably, is the TV market, where Grouf describes his own company as "AdSense for TV" in homage to Google's ad system. Yet he professes not to overly worry about the heavy footsteps, mostly because Google has so far had a spotty record moving beyond Web search. "We've seen a real dilution of that focus," he said.

Sorrell, speaking at the conference yesterday, described Google as a "frienemy" that WPP would partner with but eye with trepidation.

This fear gives some startups a leg up. WPP in October joined Interpublic Group and CBS as part of a $40 million round of financing for Spot Runner.

Christine Hunsicker, CEO of Right Media, a Web advertising exchange, sees concerns of an all-powerful Google's audacious plans to be a one-stop shop for all manner of advertising.

"A lot of large advertisers are coming to us rather than Google," she said.