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Google agrees to purchase web advertising company in cash

Google, Inc. announced today a definitive agreement to buy DoubleClick, Inc., an online advertising company, for a sum of $3.1 billion in cash.   The web search giant is acquiring the advertising company from San Francisco-based private equity firm, Hellman & Friedman along with JMI Equity and management. 

According to the press release, "the acquisition will combine DoubleClick's expertise in ad management technology for media buyers and sellers with Google's leading advertising platform and publisher monetization services."

Google says the combination of the companies will enhance targeting, serving and analyzing online ads of all types, benefiting consumers by:

  • For users, the combined company will deliver an improved experience on the web, by increasing the relevancy and the quality of the ads they see.
  • For online publishers, the combination provides access to new advertisers, which creates a powerful opportunity to monetize their inventory more efficiently.
  • For agencies and advertisers, Google and DoubleClick will provide an easy and efficient way to manage both search and display ads in one place. They will be able to optimize their ad spending across different online media using a common set of metrics.

"This transaction will strengthen our advertising network by expanding our access to publisher inventory and enabling us to serve the needs of a broader set of advertisers and ad agencies," said Tim Armstrong, Google's President, Advertising and Commerce, North America.

Google and DoubleClick have both approved the transaction, which is expected to close by the end of the year.  Speculation of the sale began several months ago when reports surfaced that a $2 billion dollar deal was in the works.

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RE: Missing details...
By masher2 on 4/14/2007 4:11:29 PM , Rating: 3
> "The amount that they technically lost...would be 2.1 billionn they can just write off..."

It doesn't work quite like that. The notion that companies can make money by losing it is fallacious.

If Google writes off a $2.1B charge, they don't pay taxes it on. That would save Google $735M in taxes...but they still lost $1.365B. That assumes they even make that much in profit in the stated year...otherwise, they'll pay even more.

A personal analogy might clear things up. Say you're paying 25% income tax. At work, you break a $100 item, so your boss takes it out of your pay. At the end of the year, you pay taxes on $100 less income, so that fine really only cost you $75. But it still cost you.

> "Also companies can write off most of the money used to develop a product...Of course only huge corporations can do this."

Err, no. Any entity, even a Chapter S or a private individual, can write off costs of doing business....which includes any money spent developing a product.

> "A company can write-off fines paid on antitrust lawsuits."

Of course. You think this shouldn't be the case?

RE: Missing details...
By theapparition on 4/16/2007 8:19:49 AM , Rating: 2
Kramer: "Jerry, all these big companies write things off"
Seinfeld: "You don't even know what a write off is, Do you?"
Kramer: "No, but they do...and they're the ones writing it off"

Funniest exchange ever.

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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