From the Wall Street journal: Google selling radio advertising
"You'll be able to target your customers by location, station type, day of the week, and time of day," wrote a member of the Google Audio Ads team on the company's Inside AdWords blog. "After the radio ads are run, you will be able to view online reports that tell you exactly when your ad played."
The ads can by played on "hundreds" of radio stations across the country, Google said. Using the online interface, advertisers will be able to set a weekly budget and define their campaigns, and then Google will let customers see and alter how their ad budgets will be spent.
This is going to put Google on a collision course with the media companies. I would expect that after letting Google develop the market the larger media companies would go direct with their own solutions leaving Google with the smaller players. The larger players won't let Google have control of their inventory. This may still make sense since the aggregate of the smaller players may be substantial by themselves.
Yahoo can't be far behind.