By Adam Pasick
NEW YORK (Reuters) - No. 2 global advertising group WPP Group (WPP.L: Quote, Profile, Research, Stock Buzz) is faced with both a major challenge and an opportunity from Internet search giant Google (GOOG.O: Quote, Profile, Research, Stock Buzz), WPP Chief Executive Martin Sorrell said on Wednesday.
"It's sort of schizophrenic, you don't know whether they're a competitor or they're a boon to the business," he said in an interview at the Reuters Global Tech Media and Telecom Summit.
On one hand, Sorrell said, WPP is Google's third-largest customer: WPP's media planning and buying agencies help their clients buy advertising on Google sites.
On the other, "I wake up one morning and Google is going to provide research on Internet sites for free," a direct competitive threat to WPP's own research business.
Google has used its massive resources to encroach on many areas that were once the sole province of traditional media, including the distribution of TV shows and the sale of radio and newspaper advertising space.
"They're also hiring creative (advertising) people," Sorrell said. "Google is now both an opportunity and a challenge."
Google stock was hammered on Tuesday after its chief financial officer warned of slowing growth, but Sorrell wryly noted the company is clearly doing something right.
"They're at $5 billion in revenues and capitalized at $100 billion, we're at $10 billion in revenues and capitalized
at $14.5 billion. They have 5,000 people, we have 72,000. They have 25 offices and we have 2,000 offices. Clearly they have a different model and are smarter than we are," he said.
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