Google Wins $3.1B Bid for DoubleClick, Benefits for Publishers and Advertisers?

Google's agreement today to acquire DoubleClick, an online advertising pioneer, ends a week long bidding battle between Google and Microsoft. The agreement is for $3.1 billion cash, nearly double the $1.65 billion Google paid for YouTube and the company's largest purchase to date.

Not only is the hallmark purchase immensely useful to Google but it is proposed it will expand opportunities to online publishers and advertisers and improve consumer experience online.

According to a DoubleClick press release the alleged benefits include:

• For Consumers: An improved experience on the Web, by increasing the relevancy and the quality of the ads they see.

• For Publishers: Access to new advertisers with greater opportunity to monetize their inventory more efficiently.

• For Advertisers: 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.

DoubleClick opened in 1996 and has since developed widespread, strong relationships with Web publishers and thousands of advertisers. Many leading Web properties, including MySpace, AOL and About.com host ads through the DoubleClick service.

Internet marketing is increasingly about display advertising, particularly in the video sector, as is better targeted display ads, an area in which DoubleClick excels. In a recent study conducted by DoubleClick, it was found that video advertising receives five times the amount of click-troughs than other forms of advertising.

Google will now have access to both DoubleClick's advertisement software, which provides considerable trend analysis, and its coveted relationships with vendors and customers.

DoubleClick's chief executive, David Rosenblatt, claimed to have a new system, a Nasdaq-like exchange for online ads that would likely become "the chief money maker within five years". (New York Times)

Here advertisers and publishers can compete in an online auction setting. The service will be open to any party of interest, not just those in the Google partner network.

Concerns over Advertising Duo

"The sale also raises questions about how Google will manage its existing business and that of the new DoubleClick unit while avoiding conflicts of interest." (New York Times)

Some clients will need reassurance that the system works fairly and that Google is not using DoubleClick's relationships simply to further its own ad network.

DoubleClick also has experienced its share of criticism for its acquisition of consumer data and alleged adware/spyware use. "Two years ago, the company settled state and federal lawsuits that charged it with surreptitiously tracking and collecting consumers' personally identifiable data and combining it with information on their Web surfing habits." (CNET)

Yet, despite concerns, the combined resources of Google and DoubleClick will be a formidable advertising force, which some may call a monopoly, and one bid Microsoft will likely shed some additional tears over losing.

Source: New York Times (http://www.nytimes.com/2007/04/14/technology/14DoubleClick.html?ref=technology) April 13, 2007
DoubleClick (http://wwwdoubleclick.com) Press Release, April 13, 2007