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Google scoops up Doubleclick
Google has agreed to buy Doubleclick for $3.1bn in cash.
Doubleclick is a provider of internet and ad service software that websites and advertisers to manage the banner ads that a site visitor views. The deal provides a significant boost to Google's network of third party web publishers.
Doubleclick was one of the big names during the first internet hype. So why is Google interested in acquiring a service that will only further increase its dependency on the advertising market?
You pick:
- Because Google's efforts to grow its revenue outside the advertising space are so far have been an epic failure. The company still makes about 99 per cent of all its revenues from advertising. Acquiring Doubleclick is grab for market share.
- Because all of Google's competitors were in the market for the Doubleclick. Reportedly Google won a week long bidding war against Microsoft, Yahoo and AOL. Especially Microsoft could have profited from a good advertising platform, given its fruitless efforts to grow in the advertising space so far. Sometimes competing means that you have to deprive your rivals of a tasty snack.
- Because Google's success has been linked to it being a text advertising firm, while Doubleclick is kind in managing banner ad campaigns. Google single-handedly created the text advertising category. It's pretty hard to convince advertisers that you do banner ads too once you've got the image of being the king of text ads.
- Because Google has too much cash (about $10bn of it).
Shareholders don't want Google to have its money sit in a savings
account accruing interest.
- Doubleclick has some very large clients like Johnson & Johnson, Proctor and Gamble and Unilever that currently don't advertising heavily through Google's network. This deal allows Google to grow its customer base.
April 14, 2007 at 12:10 AM | Permalink
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