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Contributors: Douglas McIntyre Jon C. Ogg

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Wednesday, August 02, 2006

XM Stock Up On Its Ads Signing Google

Stock Tickers: XMSR, SIRI, GOOG

We, I, and many have been critical of both XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI) about their need to do more for shareholders. With the stocks down essentially half for 2006, that went without saying. This morning is one of those efforts where you can reward XMSR. Shares of XMSR are up 4.5% at $12.75, although shares were up as much as 6.5% in pre-market trading.

Google (GOOG) said it reached a deal with XM Satellite Radio on Wednesday to have its commercial advertising available on the radio service's non-music channels. Even though terms were not disclosed, this is a great start.

Google's AdWords' customers will be able to Google’s recently-purchased unit dMarc media network (http://www.dmarc.net) to place terrestrial and satellite radio spots once the platform is integrated into AdWords.

The integration is planned for the fourth quarter. Since we do not have any financial terms it will be hard to interpolate this into revenues or earnings projections, but if it is will integrate in Q4 then you probably won’t see any net effect to earnings and revenues until the first or second quarter of 2007.

Jon C. Ogg
August 2, 2006
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