DailyTech - Google May Acquire Ad-giant DoubleClick

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Internet Google May Acquire Ad-giant DoubleClick
Tuan Nguyen (Blog) - April 2, 2007 5:02 PM

21 comment(s) - last by dgresko.. on Apr 6 at 11:22 PM

Google is said to be considering DoubleClick for $2 billion

When Google decided to push forward into expanding its advertising portfolio, it definitely wasn't just testing the waters. Today reports surfaced around the Internet that Google is in talks with long time online advertisement house DoubleClick. What makes the talks between Google and DoubleClick more critical is that Google isn't just the only one with its eyes on the advertising firm. According to several reports, AOL, Microsoft and Yahoo are also in talks with DoubleClick's top management.

DailyTech last reported that Google announced its official push into video game advertising with the purchase of Adscape. The company launched a campaign to start pushing its AdSense and AdWords programs into video games.

With online games being released on consoles on an increasing basis, this also would make it easier for Google to approach console developers. Gamers have voiced their opinions about in-game advertising before and indicated that they were displeased with the movement, saying it detracts from the "reality" of the game.

Analysts are expecting the selling price for DoubleClick to reach as high as $2 billion USD with Google in the talks. Industry insiders indicated that Google is still developing its own advertising services, but said that Google would not stand to let Microsoft take over control of one of the oldest and widely used advertising firms.

According to search engine expert John Battelle, Microsoft is a big threat to Google's advertising space. "It's a major risk to [Google's] business to force advertisers to change behavior -- it needs a third-party ad serving solution."

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*sigh*

By Scorpion on 4/2/2007 5:36:32 PM , Rating: 2

I just don't understand why all of this is important. Why must Microsoft consider buying DoubleClick? It's probably motivated by their desire to compete with Google in the advertisement market, which is one of Google's strong suits. So now Google must consider buying them to stave off Microsoft. I mean it's reaching ridiculous proportions, just for an online ad company.

I also don't understand why companies like Microsoft feel the need to dip their fingers into so many different industries. I feel that it just dilutes their efforts to be really good at what their core is.

Sometimes I feel this Microsoft vs. Google war is some unnecessary competition being waged by companies with separate focuses, yet more and more, due to this "competition" they're both finding themselves migrating towards this conglomerate middle ground to duke it out in Thunderdome fashion.

I'm sure plenty of you will disagree with what I've said, but I still feel that we'd be better off if they would both focus on their core business, and stop diluting it.

RE: *sigh*

By thebrown13 on 4/2/2007 6:09:47 PM , Rating: 2

Google currently gets a CRAPLOAD of cash from doing nothing. Microsoft wants that to fuel other areas of R&D, like making Windows better.

What would you rather have? More google ads or a better OS that you use every single day of your life?

Derrr.

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RE: *sigh*

By CheesePoofs on 4/2/2007 9:53:04 PM , Rating: 2

I use Linux and firefox + adblock. I'll just take a check?

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RE: *sigh*

By thebrown13 on 4/2/2007 11:11:49 PM , Rating: 2

What Microsoft does surely helps you too. Just because the standard doesn't work for you now doesn't mean it never will.

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RE: *sigh*

By Vixis on 4/3/2007 8:19:53 AM , Rating: 2

But Google invest in Linux.

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RE: *sigh*

By hands on 4/3/07, Rating: -1

By hands on 4/3/2007 11:00:46 AM , Rating: -1

It kills me to think how many people act like Microsoft practically created computing as we know it today by acting as a benevolent dictator. The truth is that Microsoft is a convicted monopolist. They did everything they thought they could legally get away with to stifle competition. Unfortunately, that conviction barely resulted in a slap on the wrist.

Anyone who has seriously used products other than Microsoft will see two things. Others are very capable of providing good products (in fact, Microsoft purchased many of their products from others). And, due to the Microsoft monopoly, competitors can have a very difficult time because too many software and hardware vendors decide to only support Microsoft products even though they may not be the best products available.

As far as the "standard" goes, true public standards work very well for me. I just wish that Microsoft would use more of them for the times when I am forced to interoperate with Microsoft products. Microsoft would have everyone believe that for true interoperability you need to use all Microsoft products. True interoperability would be better achieved by using real published standards. I'm not saying that Microsoft protocols couldn't be used, but they don't have the best track record for publishing important protocols.

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RE: *sigh*

By hands on 4/3/2007 11:06:30 AM , Rating: 1

I use Google services and apps as often as I use an OS, and they work very well with the OS that I use every single [work] day of my life. Oh, and the OS that I use every single [work] day of my life doesn't come from Microsoft.

Derrrr.

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RE: *sigh*

By Tuan Nguyen on 4/2/2007 6:25:44 PM , Rating: 5

The reason why a company like Microsoft expands into so many markets is because they need to. In order to continue to group the company financially, they need to expand into new and emerging markets. Remember that they are there to satisfy their investors.

Since Microsoft stock is stagnant, sitting there with a value that is based mostly on remnants of its past, it isn't growing by traditional stock market means. Therefore a company like Microsoft has to start generating significantly more revenue by other means. Its core competencies no longer grow the company.

When you reach a plateau, you have to do something to grow -- and this is one of the few things that Microsoft is doing to try to overcome that plateau.

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RE: *sigh*

By crystal clear on 4/3/2007 4:15:42 AM , Rating: 1

Microsoft has a history of missing the boat with when it comes to the web, investing a massive amount of time and resources to catch up and surpass Netscape in the browser market, and continuing to fumble behind Google and Yahoo in the search market. With the web moving to a more interactive model, it may be possible for Microsoft to fight its way back in the search engine and ad revenue space. With just under one-fifth of Google's current market share, Microsoft will have to take advantage of the fact that most of the revenue-generating advertising systems were created when web pages where static. If Microsoft can take capitalize on new, "dynamic" media and other interactive technologies, it stands a chance at closing the gap.

http://66.225.202.210/journals/microsoft.ars/2007/...

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Bad Sign

By BMFPitt on 4/2/2007 5:42:38 PM , Rating: 3

What ever happened to the whole not being evil thing?

RE: Bad Sign

By osalcido on 4/2/2007 6:36:23 PM , Rating: 2

what part of this do you consider evil?

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RE: Bad Sign

By Sunner on 4/3/2007 5:14:20 AM , Rating: 2

Well, personally I'd consider DoubleClick pretty evil.
They're the only company that I block in AdBlock before even visiting my first site after a fresh install :)

That said, one could always hope that if Google buys them, they'll turn them into something less crappy(better word than evil in this context I guess).

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RE: Bad Sign

By kyleb2112 on 4/3/2007 8:24:26 AM , Rating: 2

My thoughts exactly. How much unwanted software do you have to load onto people's computers to be considered evil? Whatever threshold that is, DoubleClick long surpassed it. I hope Google can find the baby in all that bath water.

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RE: Bad Sign

By hands on 4/3/2007 10:35:13 AM , Rating: 2

The point is that someone is going to purchase DoubleClick.

Personally, I would prefer for that someone to be Google rather than Microsoft for the simple reason that Google doesn't need DoubleClick to become a dominant player in online advertising. They are already the dominant player, and they have their own system that will most likely supplant DoubleClick's system after the acquisition. DoubleClick's system would most likely become Microsoft's new system.

In other words, "Google buys DoubleClick" => "DoubleClick disappears" while "Microsoft buys DoubleClick" => "Microsoft is the new DoubleClick."

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Another expensive buy

By Puddleglum1 on 4/2/2007 6:07:25 PM , Rating: 2

From the linked article:

quote:
The search engine players are vying for one of the major providers of graphical ad serving on the Web, one that did an estimated $150 million in sales in 2006 and firm with roots that stretch to the early days of the Web advertising business.

$2,000,000,000 is 13 and 1/3 times last year's revenue of $150,000,000.

"This product pays for itself in a little over 13 years!"

Could somebody explain why this buy is profitable for Google?

RE: Another expensive buy

By osalcido on 4/2/2007 6:35:51 PM , Rating: 2

Google seems to have more GoogleMoney than GoogleSense these days

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RE: Another expensive buy

By oTAL on 4/3/2007 9:57:06 AM , Rating: 2

You're assuming that Google can't use its corporate culture and existing business to leverage this new acquisition making it more profitable by itself while adding value to other parts of the corporation. Most of all you're not reading the possible damage that a MS acquisition of this company could do to Google... They NEED to stay on top.

There are many reasons for an acquisition to be made... like AMD buying ATI may have looked unprofitable and unsound for a company that is now facing some financial problems. Yet, if AMD had not made that move it could have, arguably, a dim future ahead with INTEL investing into a fast, fully integrated CPU+GPU+MC, dropping prices and possibly taking the entire value market due to an efficient and very cost effective product.

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RE: Another expensive buy

By iNGEN on 4/6/2007 1:49:37 PM , Rating: 2

Even assuming there is zero revenue growth in online advertising, I think you just answered your own question.

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Only one side...

By oTAL on 4/3/2007 10:02:07 AM , Rating: 2

quote:
Gamers have voiced their opinions about in-game advertising before and indicated that they were displeased with the movement, saying it detracts from the "reality" of the game.

Some said so, and some (myself included), mentioned that it all depends on context and implementation. When well blended it can actually add to the experiment. Would you rather see fake ads or real ones in a F1 Sim game? Real commercial panels or fake ones on stadiums?

Lets clarify

By dgresko on 4/6/2007 11:22:57 PM , Rating: 2

Why is this all important? Well, why do you think the majority of internet space and the services provided are free? The online ads that companies run are the reasons sites like this one, yahoo, CNN, and most others are free to view or use. Not just that, but these ads reach millions upon millions of users and they generate a ton of cash. If Googgle buys Doubleclick, they will at least take over all corp. accounts...and thats huge in iteslf. If MS takes over, it will now have a newer way to advertise and will give them quite the boost in revenue. Either way, whoever buys the ad firm gets serious bling.

Companies like Doubleclick are all opt in companies and opt in companies are legit ad companies. The power of what they do is not in posting an ad but in tracking how effective the ad was. This is all done via GOV controlled practices and nothing of a personal nature is ever collected. These companies have huge insight into how ads are best deployed for maximum ROI, and thats why whoever buys the ad giant reaps serious cash in the long run.

People need to educate themselves on the differences between spam merchants and legit online ad companies. With a little research its easy to see why such a purchase is just good sense for any established company wishing to grow using quick and established technology.

The M.$. side of the story

By crystal clear on 4/3/2007 4:20:47 AM , Rating: 1

You read about Google now read this-

"Microsoft kicking the tires on DoubleClick"

Citing anonymous sources, the Wall Street Journal is reporting that Microsoft is in talks to acquire DoubleClick from the private equity firm Hellman & Friedman LLC. According to the WSJ report, DoubleClick hired Morgan Stanley to explore several possibilities, including a public stock offering and sale to other buyers. Hellman & Friedman stands to make a significant chunk of change if the sale price is the $2 billion reported by the Journal—they paid $1.1 billion when they acquired it in 2005.

This acquisition would give Microsoft a much-needed boost in the search engine revenue market, where Microsoft currently lags behind the industry behemoth Google as well as Yahoo in terms of both market share and generated revenue. Along with increasing Microsoft's market share in the advertising arena, DoubleClick would offer several technologies that would provide Microsoft's advertising customers with more insight into who is viewing their ads along with new ways of slicing their purchases.

http://66.225.202.210/journals/microsoft.ars/2007/...