It's a silly rumor. Google (NASDAQ:GOOG) is buying Sirius (NASDAQ:SIRI)? Really? Is a legacy air carrier or a Michigan automaker next on Google's shopping list?

I'm a fan of both Google and Sirius. I am. The problem is that this feels more like a comedy shop's chattering teeth than legitimate rumor-mill chatter.

The speculation started a few days ago, when ClickZ blogger Zachary Rodgers unleashed a zinger of a baited hook. 

"A high-profile source is pretty convinced ol' Goog is on the verge of snapping up Sirius Radio," he wrote. "Heard anything of the sort? Do get in touch."

In touch? With reality? Since then, WebProNews, Blogging Stocks, and Seeking Alpha have all chimed in on the matter. No one seems to be taking it seriously, but they haven't spelled out the reasons why the chances that this will happen are about the same as Britney Spears going on a world tour with Sanjaya.

That's what I'm about to do, but first let me start with the other side of the argument.

Google's got a volume knob
I have no doubt that Google could improve the monetization process at Sirius. There are certainly areas where the two would come together like peanut butter and grape jelly.

Really.

  • Early last year, Google acquired dMarc Broadcasting, a provider of automated radio ads for the broadcasting industry. Beyond the commercial-free music channels, Sirius has some great ad-backed programming. As fate would have it, ad revenue per user is surprisingly slipping at Sirius. A purchase by Google would help.
  • Sirius is rolling out backseat video, a premium service that lets car owners stream up to three channels of kid-geared content. Google's push to video ads would come in handy here. A "best of YouTube" channel would be a low-cost programming opportunity to attract older backseat riders.
  • Both Sirius and XM (NASDAQ:XMSR) allow subscribers to stream select programming online. That means more Web traffic and a greater opportunity for paid-search market leader Google to wow us with its impressive wingspan.
  • A full 99% of Google's revenue comes from online advertising. Diversifying into the steadier flow of subscription revenue would help. I know -- if it's not broken, why fix it? But it's going to be a long way down for Google if the interactive marketing starts to get wobbly knees.

Pretty picture, isn't it? Now hit the delete button and flush out your eyes. It's just not going to happen.

The wedding invitation that never arrives
Forget for a moment that Sirius has been engaged to XM for more than seven months now. Any potential hookup of Google and Sirius is clearly intended as a rebound, just in case regulatory forces block the proposed pairing of the satellite-radio powers.

There are several other reasons to hold off on eyeing the bridal registry or booking a wedding singer.

  • dMarc's client base consists of mostly terrestrial radio stations. They view Sirius as a mortal enemy, hence the money spent by the National Association of Broadcasters in lobbying against the XM-Sirius combination. Google would kiss the terrestrial business goodbye in pursuit of the thinner sliver of radio ad revenue available on satellite radio? Impossible.
  • I am a believer in Sirius as an investment. I have no problem telling you that Sirius will be worth more in a few years. However, the market isn't that confident. It would view a purchase by a high-margin Internet growth company like Google of a low-margin, deficit-saddled company like Sirius as a desperate sign. Google and its $176 billion market cap would likely shed more than Sirius' entire $5 billion market cap if a deal were announced.
  • Regulators are already giving Google a hard time over its real-life purchases, such as the $3.1 billion deal pending for DoubleClick. Buying Sirius doesn't seem like a competition-stifling move on the surface, but it would be too beefy to ignore.
  • If Google were to buy a satellite-radio company, XM would be the better play. XM can be had for less yet offers a larger subscriber base and a wider range of ad-centric programming.     

Don't get me wrong. I can definitely see Google and Sirius striking up the kind of broad marketing alliance that would flesh out many of the benefits that I first pointed out. If Google doesn't take the plunge, Yahoo! (NASDAQ:YHOO) or Microsoft (NASDAQ:MSFT) will. That is reason alone for Google to work on its Mel Karmazin handshaking skills.

But a deal? An actual merger? Ha! Wind up the chattering teeth, load up the boardroom seats with whoopee cushions, and give Mel a joy-buzzer for that handshake.

It's just not going to happen.