Did he really say that?

Sirius XM Radio Inc. CEO Mel Karmazin had a meeting between with Sergey Brin, Larry Page and Eric Schmidt of Google Inc.

And what does Karmazin say to the trio? That Google's advertising model was "F-ing with the magic."

To be more accurate, "I used the full word, I didn't use the abbreviation," Karmazin revealed in an interview on Charlie Rose last week.

"I don't remember saying it, but... it absolutely sounds like something I would have said," Karmazin conceded amid laughter.

Mel went on to explain that back when he was the CEO of CBS, advertising had no accountability - no return on investment.

"You buy a commercial in the Super Bowl... and you had no idea if it worked! You had no idea if you sold product... if it did any good," Karmazin said. "I loved that model."

"And then here comes Google. They screwed it up!" added Karmazin, semi-jokingly.

The conversation was the culmination of an underlying theme throughout the interview: the shift in media's business model. Terrestrial radio - and in fact, almost all of mainstream media - is suffering because of an advertising model that never focused on creating a return on investment.

"I think that there is too much [advertising] inventory," Karmazin told Rose earlier in the interview. "I think that the Internet has changed... the world.  And what's happened is that there is far more supply than there is demand."

But since Sirius XM Radio isn't dependent on advertising exclusively as it's revenue stream, it doesn't suffer as much as its terrestrial radio cousins.

"And that's why subscription, subscription, subscription... I used to love the advertising business until Google ruined my day," said Karmazin "Google comes along and this is the new way of doing it, and I'm now in the subscription business."

Karmazin's interview aired on December 31st, 2009 and you can watch it here, or read the full transcript here.

[via SeekingAlpha]

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