Google Buys DoubleClick - Fitting the Pieces Together
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DoubleClick is a natural fit for Google. According to DoubleClick CEO David Rosenblatt, the two companies share a "common vision" as "Internet companies of the same generation." They also share offices in the same building in New York, and "There are former DoubleClick employees who are at Google and vice versa," according to Rosenblatt. Indeed, the two companies have been partners for a long time. Weighted against that kind of propinquity, one wonders if Microsoft realistically had a chance.
It's no secret that Google has been trying to expand its ability to offer and automate advertising into different media. It purchased radio ad company dMarc in a move, say some analysts, to bring AdWords/AdSense style auction-based advertising to radio. It has been experimenting with print advertising in magazines and newspapers. It is widely expected to move into TV advertising as well, having made a deal with EchoStar Communication's Dish Network "to create an automated system for buying, selling and measure the impact of TV ads," according to CNET. There are rumors of an upcoming deal with DirecTV and more than one agreement (so far content-based) with CBS.
And DoubleClick brings a brand-new advertising platform to the table: an online auction style exchange that is open to any web publisher or ad network. The new service was announced right in the midst of the rumor frenzy of who was bidding to purchase DoubleClick. The platform was originally projected to become DoubleClick's chief cash cow in five years.
But DoubleClick fits in as an online play, one that adds strength in one area where Google is week: display and banner ads. Yahoo actually beats Google here, but possibly not for long. Many companies that advertise in this fashion look to a third-part ad server, and DoubleClick leads the market here. Yahoo owns a 20 percent share of a DoubleClick rival. By owning DoubleClick, Google will see customers coming to them for ad serving even if the ads are not shown on Google's own network.
So the deal gives Google access to DoubleClick's advertising software. Combine that kind of information with Google's various algorithms, and you open the door to ever more relevant advertising. But this goes beyond algorithms. If Google had created its own DoubleClick rival, it still wouldn't have had something that DoubleClick has worked years to build: the relationships with web publishers and advertisers that can make or break the business.
Next: Relationships: A Two-Edged Sword >>
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