Google Inc. announced late last week that it has begun testing its new radio advertising service, a move that represents the company's most elaborate attempt to expand its operations beyond the Internet.

The test run began last Thursday, following almost a year of experimentation since the company acquired dMarc Broadcasting, a small radio advertising firm, for $102 million in cash last January.

We're happy to announce that the integration is now complete and we've recently begun a U.S. beta test of Google Audio Ads with a small group of AdWords advertisers, Google said in a statement on its official advertising blog.

Small businesses will determine if Google’s new platform offers compelling technologies to change the way they distribute their message. The company will also need to catch up to already established rivals, such as Softwave Media Exchange, which says it has enlisted more than 1,500 stations with a combined daily audience of more than 9 million listeners.

DMarc developed technology that allowed radio stations to sell excess ad inventory at the last minute, using online tools. Google has adopted the platform and will use it to sell advertising on more than 700 radio stations in more than 200 U.S. metropolitan markets.

The system is designed to remove the middleman and connect small advertisers directly to radio stations with advertising space. An advertiser would log into Google's Web site and create a radio ad campaign online, selecting the geographical area, demographics of the radio audience, time of day and radio format. The advertiser bids on how much it is willing to pay to buy the air time, but it doesn't know the exact station that will carry the ad.

If the advertiser doesn't have a radio ad already created, Google will provide the opportunity for producers to bid on the job. Both sides would then negotiate the price.

The radio stations can see how many advertisers bid on each slot, listen to an ad and choose or reject one - all online. Google makes a commission off of the transaction with the radio station.

Thursday's announcement did not specify how many advertisers are involved in the early radio tests nor set a timetable for opening the service to all comers.

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