Silverpop - Google Buys DoubleClick for $3.1 Billion
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Google Buys DoubleClick for $3.1 Billion

Bill Nussey, Silverpop
by: Bill Nussey (@bnussey)
15 April 2007

The big news this weekend is Google's acquisition of DoubleClick for $3.1 billion--reportedly beating out Microsoft and Yahoo for one of the top online advertising providers. The media is abuzz with discussions on why Google paid so much (DoubleClick revenues are fuzzy, but reports put it somewhere between $150 million and $300 million per year) and what the acquisition means to the industry. I figured I'd throw in my two cents...

The ad banner space is far more mature than search so it's unlikely Google expects DoubleClick's business to grow at anywhere near the rate of Google's core business. From this, I think its acquisition of DoubleClick was a largely pre-emptive move to keep Microsoft and Yahoo from gaining ground in the online advertising space. (Yahoo, in particular, has a strong ad banner business.)

Google will likely push DoubleClick's ad system into a more self-help, middle-market focused offering like Google's own AdWords offers today. Meanwhile, on the enterprise side, I expect to see the two sales forces quickly align to cross sell large customers on both companies' advertising solutions. For marketers, this will mean a convenient one-stop shop for all forms of advertising.

I think this could play well for consumers. For example, Microsoft and Yahoo are going to have step up their investment in innovation and user-facing features in order to offset Google's growing lead on the advertising space. I expect Microsoft and Yahoo to focus more on their own content and user-centered features in an effort to counteract Google's success in monetizing the traffic and content of other sites through search and ad banners. In other words, if Microsoft and Yahoo can't buy any more billboards on the side of the road, they will build more roads.

Additionally, both DoubleClick and, particularly, Google, have some impressive technology for driving relevance in advertising. The combination of the two companies' technologies promises consumers increasingly relevant advertising across the Internet.

However, it is worth noting that some sources are saying that this merger gives Google almost 80 percent of all the advertising on the Internet. If this proves to be true, you can bet their rivals and the federal government will not sit by and let these companies combine--not without a fight.

All of this reminds me why I love being in this industry. It's never boring. There are endless opportunities for those companies that can take advantage of the change to drive innovative marketing campaigns and pull ahead of their competitors.




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