European regulators have approved Google's plan to buy online advertising giant DoubleClick. The acquisition, which has been in the works for the better part of a year will solidify Google's dominance in the advertising field. Right now Google makes most of its money through its lucrative contextual advertising system. The DoubleClick acquisition will help Google move into display ads, an area where the company is currently not as strong.
Google competitors including Microsoft, Yahoo! had filed anti-trust complaints, claiming that the deal would give Google an unfair advantage in the online advertising marketplace. But EU regulators basically gave Google a pass and said the deal could go forward as is. Of course, if Microsoft manages to buy Yahoo!, (a company that has been playing hard to get), that might give Microsoft the tools to level the playing field. You know, assuming EU or US regulators don't nix the deal.
Today AOL (this blog's parent company) announced that it has entered into an agreement to acquire TACODA. AOL plans to use TACODA's targeted advertising technology to extend its own ad network. TACODA currently serves up ads for about 4,000 websites reaching over 125 million users.
Terms of the deal haven't been disclosed, but the New York Post reports that AOL could be paying from $200 to $300 million for TACODA.
Do we care why Google bought DoubleClick? Well, it could be nice to know a little background history on the deal in progress.
Alex Kinnier, Google's Group Product Manager made a blog post yesterday as to why they decided to buy Doubleclick. Basically, DoubleClick has been a leader in the online advertising game from the beginning, helping advertisers get onto large sites such as AOL, Yahoo, MSN, CNET and ESPN.com.
Google's display advertising was seen as a little speck compared to the giants of online display advertising, AOL, Yahoo and MSN, and they wanted to change that. Google feels that DoubleClicks products and technology complement their own quite nicely, that paired with DoubleClicks delivery mechanisms can help current AdWords customers obtain more precise metrics enabling them to get a better idea how their advertising campaigns are fairing out. DoubleClicks superior knowledge in the industry will also be able to help Google's initiatives out by communicating with agencies and publishers to create more innovative ad serving technologies. Through the DoubleClick deal Google will also be able to help out with unsold media using DART, a hosted enterprise-class advertising management and serving solution for publishers.
So there you have it. It's all about helping the advertisers out. And maybe a little about lining Google's pockets with some extra R&D and Engineering dollars, judging from all of the new releaseslately.
According to Michael Arrington over at TechCrunch, aQuantive's revenues for 2006 were $442 million, and the company's net income was about $54 million, which leads to the obvious question: couldn't Microsoft have found a cheaper advertising company to acquire? Sure, everybody wants to pick up an advertising company these days so it can be integrated into your search engine/online portal's business model. But $6 billion is a lot of dough.
In fact, Microsoft paid about $66 per share, which was twice the trading price. Odds are there was a bidding war and the company didn't want to lose another one of those.
In October Yahoo! picked up a 20% stake in advertising company Right Media. Today, Yahoo! bought the other 80% for $680 million in cash and stock.
This comes just weeks after Google picked up advertising giant DoubleClick for $3.1 billion. In other words, the big search portals ain't just about searching no more. Okay, that's been true for a while, but this makes Google and Yahoo! two of the biggest names in online advertising.
Right Media runs an advertising marketplace, or an exchange where advertisers and publishers can buy and sell online ads through auctions. Yahoo! had been using Right Media to place ads on its own sites since last year.
DoubleClick plans its own advertising marketplace, but has yet to do so.
It's heartening to know that money isn't everything when deals are on the table. Some interesting new discoveries have come out of the Google DoubleClick deal, and it seems as though Microsoft may have put more money on the table than Google did.
John Battelle discovered that Microsoft did offer to match the $3.1 billion that Google paid for the company, and was willing to pay more to ensure that Google did not get a stronghold on the online ad market. For some reason that private equity firm that owns a majority stake in DoubleClick decided to go with Google. Could it be because of it was a better cultural fit, reputation, or was it for the employees as Robert Scoble points out?
Just goes to show us that money isn't everything, and there are different priorities that have to be met when building or buying top notch properties.
As predicted, Microsoft is crying over Google's recent purchase of DoubleClick. They believe that the combination of these two companies hurts competition in the online advertising space. Now Microsoft wants a review of the $3.1 billion sale of the company. They raise the question about how much personal information would be collected by Google by capturing consumer data on an unprecedented scale, and believe Google has substantially reduced the competition.
Would Microsoft be in arms if Yahoo or Time Warner had outbid Google for DoubleClick? Somehow I don't think so. Microsoft is just doing as any other company would do in this position, biting their nails at the fact that someone else is dominating the space in which they had hoped to win out.
Remember back in the 80's when Microsoft started the domination of the PC operating system world, should there have been a stronger voice against it?
That $1.65 billion Google paid for YouTube last year? That was chump change.
The big G has finished negotiations to buy online advertising giant DoubleClick for $3.1 billion. This will give Google a major foothold in visual advertising online. Google makes most of its money currently from relevant text advertising.
Microsoft and Google had been engaged in a bidding war over DoubleClick. While it'll take a lot of advertising revenue to make up for the largest purchase in Google's history, you can't put a price on beating Microsoft in the race for web dominance.
Microsoft had been trying to catch up to Google in the online advertising business, and DoubleClick is one heck of a chess piece. If Microsoft had won, the company would have immediately become a serious contender. With Google winning the bid, it'll be that much harder for Microsoft to get a strong foothold in the online advertising market.
An interesting sidenote: Doubleclick made $300 million in revenue last year. Either Google has really big plans for the company and its technologies, or this is a long term investment. Or both.
Are Microsoft and Google going head to head for a bigger piece of the advertising market?
Both companies have now been rumored to be hitting on the same company, Doublclick. The famous banner ad network site is said to be in talks with both companies, and according to Techdirt bidding has hit the $2 billion mark.
Microsoft has lost so far at the online ad revenue game, being a consumer of online ad space rather than a producer. This could be an important deal for MS to win but, how far are they willing to go?
European regulators have approved Google's plan to buy online advertising giant DoubleClick. The acquisition, which has been in the works for the better part of a year will solidify Google's dominance in the advertising field. Right now Google makes most of its money through its lucrative contextual advertising system. The DoubleClick acquisition will help Google move into display ads, an area where the company is currently not as strong.
When Google goes and buys DoubleClick and Yahoo! responds by purchasing Right Media, what does that leave for companies like AOL? How about behavioral-targetting ad firm TACODA?
Do we care why Google bought DoubleClick? Well, it could be nice to know a little background history on the deal in progress.
You know how Google beat out Microsoft with a $3.1 billion bid for online advertising company DoubleClick? Yeah, Microsoft don't need to stinkin' DoubleClick. They went out and spent $6 billion this morning on their own advertising company (that you've never heard of), aQuantive. 
In October Yahoo! picked up a 20% stake in advertising company Right Media. Today, Yahoo! bought the other 80% for $680 million in cash and stock.
It's heartening to know that money isn't everything when deals are on the table. Some interesting new discoveries have come out of the Google DoubleClick deal, and it seems as though Microsoft may have put more money on the table than Google did. 
As predicted, Microsoft is crying over Google's recent purchase of DoubleClick. They believe that the combination of these two companies hurts competition in the online advertising space. Now Microsoft wants a review of the $3.1 billion sale of the company. They raise the question about how much personal information would be collected by Google by capturing consumer data on an unprecedented scale, and believe Google has substantially reduced the competition. 
That $1.65 billion Google paid for YouTube last year? That was chump change.
Are Microsoft and Google going head to head for a bigger piece of the advertising market?
