Microsoft, Google, and Others Dueling Over DoubleClick? - Microsoft’s Interest
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Microsoft was the first company reported by the media as having an interest in purchasing DoubleClick. The software giant already has its own advertising platform, called adCenter, which it set up in 2005. Microsoft’s plans to spend around $1 billion this year on research and development for its Internet business unit show how dedicated the company is to improving its services in-house.
But that won’t keep it from purchasing technology companies when that makes more sense. Last year, Microsoft bought Massive, a firm whose mission is to place advertising in – of all places – video games. Web analytics firm DeepMatrix represents another purchase aimed at improving a current Microsoft product – adCenter, in this case. That acquisition also looked like an attempt to compete with Google’s Google Analytics offering.
In part, it is pressure from the competition that makes a DoubleClick purchase look like a good move for Microsoft – and for DoubleClick. Mike Walrath, CEO of Right Media (a DoubleClick competitor), notes that many companies are now offering ad management and ad serving capabilities bundled into other services, thus eating into DoubleClick’s core business. A Microsoft acquisition would take some pressure off of DoubleClick, and at the same time, “The deal would accelerate Microsoft’s ability to provide these services like the other major players like Google, Yahoo [and] AOL,” Walrath explains.
The deal is not without its risks. DoubleClick’s Performics division competes directly with certain agencies to which Microsoft sells ad space. So the deal could cause an exodus of clients from DoubleClick. One of the names looming large on DoubleClick’s client list is AOL, and industry observers think the Time Warner firm could end up either leaving DoubleClick or trying to purchase it. Either way, it would not be happy with Microsoft having access to the user data going through DoubleClick’s ad serving system, and AOL isn’t likely to be alone in that sentiment.
Mark Simon at Media Post Publications thinks a Microsoft purchase of DoubleClick is actually a stepping stone to something much larger. He thinks that the software giant’s next big acquisition after the ad serving company will be Yahoo, and that Microsoft needs DoubleClick’s technology to fully unlock the potential of a Yahoo purchase. “As the back-end technology for both AOL and MySpace’s publisher programs, DoubleClick has shown itself to be highly capable at managing large publisher networks,” Simon says. Yahoo, meanwhile, makes a huge amount of its revenue from display advertising; some estimates put it as high as a third or more. A Microsoft-DoubleClick-Yahoo ménage a trois could spell real trouble for Google, according to Simon.
Next: Google Gives it Consideration >>
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