In the conclusion of a bidding war said to have lasted for weeks, Google beat Microsoft to purchase ad serving company DoubleClick for $3.1 billion in cash. The move leaves Google's competitors reeling, and opens up striking possibilities. It is not without its risks, however.
The original rumor surfaced in the Wall Street Journal, and at that time it was Microsoft who was put forward as DoubleClick's suitor. Several other names quickly emerged; we covered the whole situation and its various potential permutations just last week here on SEO Chat. I was somewhat skeptical that Google would purchase DoubleClick because of rumors (still unconfirmed) that the search engine giant was working on an ad serving system similar to DoubleClick's, and also because Google had recently paid $1.65 billion for YouTube. At the time, I didn't think that Google would lay out the rumored asking price of $2 billion, especially when it might have its own competing system in the works.
I don't mind admitting I was wrong. The record-breaking acquisition must surely have left Microsoft and the other firms competing for DoubleClick's hand nothing short of flabbergasted. Microsoft will not comment on the deal. It is expected to close sometime later this year.
Is this a good deal? Phil Wainewright over at ZDNET, writing almost two weeks before the deal was completed, was amused that DoubleClick was even up for sale, especially for the original asking price of $2 billion. "Whoever buys DoubleClick at that price will not see a repayment on their investment. Therefore I surmise that Google will win the alleged bidding war with Microsoft to acquire the company, since Google has a track record of throwing large piles of cash at iffy acquisition targets." While Wainewright called the winner accurately, he may be exaggerating the importance of the factors that make the deal an iffy proposition (and I'll be discussing those later).
In its press release, Google lists several groups that benefit from its acquisition of DoubleClick. To quote directly, it sees these benefits:
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.
But the biggest winners out of this deal, of course, are Google, DoubleClick and private equity firms Hellman & Friedman and JMI Equity. Google is doing more than outflanking Microsoft and the other rivals for DoubleClick; it is continuing a string of purchases to set itself up as the go-to place for advertising, on or off the web.
Search Engine News 
