Google to Buy DoubleClick for $3.1 Billion Cash

19 comments

Announced on MarketWatch:

Google Inc. said late Friday it has agreed to acquire digital marketing company DoubleClick Inc. for $3.1 billion in cash from private equity firms Hellman & Friedman and JMI Equity, and management. The deal is expected to close by the end of the year.

I believe DoubleClick owns Performics. This will aid Google's entry into affiliate marketing, but what will happen to Performics SEM service customers? Google avoided that question in their conference call.

Comments

wow, that is a seriously big

wow, that is a seriously big deal that'll really increase Google's reach into the blue chip and media markets

Google Monopoly Beta

At some point the DOJ will have to step in and make sure Google doesn't swallow every single business online. Any bets on when that will happen? (Unless of course Google acquires the DOJ for cash.)

markus

if they buy everyone, there won't be anyone left to buy adwords :)

DaveN

if there's no one left to buy adwords ...

... then Google will have solved its click fraud problem

What's that smell?

It's soap I think, the type of soap that makes a bubble.

Will we have another bubble and 'net implosion or is it all financially solid the second time around?

I'm getting a little nervous as all the big deals like this are starting all over again and the launch parties (yes, I was invited to one of those a few days back) and the VCs and corporations seem to be sitting on large stockpiles of cash just looking for places to invest.

If it happens again the impact on the trickle down economy generated from PPC and affiliate marketing will be a high tech version of the great depression.

Guess only time will tell, but I'm expecting to hear a large 'POP!' before too long.

I attended a revival last

I attended a revival last night as well, Bill. A digital artist mentioned having switched to Revr for video hosting, because it was revenue share. She made $75 this year so far, and while it's not much, it was better than nothing (her words).

Down with the king, long live the king. They'll keep the profits away from the masses as always, and the opportunities will continue for the smarter ones. New technology, same old system.

I noted how Doubleclick was ramping up the past 6 months, showing up everywhere. Once again Google spends tax money and I doubt this is part of a VC-funded bubble.

re:Bubble

>>What's that smell?

We don't know what doubleclick earns now but in 2005 when it was taken over it made $7.7 million in the previous quarter.

Prorated about $30 million or 1/100 of the price google will pay. They also were complaining of stagnating revenues when they sold out. Perhaps things are much better now :)

With Google going after

With Google going after brand dollars does this shift the AdSense publishing model toward garbage content high traffic topics?

as they control

the search market, dominate much of the banner space, this is a sensible move for them, so they can add more to there backend. They cant just sit on all there cash.

How long before Azoogle or Valueclick is acquired ? next stop on the Google fasttrain has to be an acquistion of an affiliate company.

Google got played. MS floats

Google got played.

MS floats a rumor they are going to buy any POS for 2 bil, the plex takes the bait and shells out 3.2 bil. Clever way to deplete G cash reserves.

Quote:
DoubleClick is reported to have revenue of less than $152 million.

Google Pays Premium <- understatement of the year.

3.2 bil for annual rev of 152 mil? As they say in the hood, "THAT AIN'T RIGHT".

Adsense CPA

Yeah, I think they overpaid too, but I wasn't in the room when the deal was discussed and at the trigger prices discussed, so I'd prefer not to backseat acquire too much.

While I think Google may have solved the initial problems inherent to running a CPA-based program in time (a couple years from now), buying a firm that already does that may speed things up for them. It will be interesting to see how the next 18 months play out; will Adsense be thought of less as a PPC method of making money and more of a robust affiliate/advertiser network?

If they can tie in the CPA management structure in with the radio, print, and television channels as well...that gets scary. IMHO, we haven't seen a company capable of dominating verticals and channels like this since Standard Oil.

Cygnus

hmmmm.....

Let's just hope they handle existing customers better than they did when they bought Urchin. The userbase here is far larger and, most likely, more vocal.

Quote: handle existing

Quote:
handle existing customers better

Dig around and find out how they did the sales/service crew at Dmarc.

Unless they leaned a lesson in how not to handle advertisers at dmarc the doubleclick deal will go bad as fast as you can say "automate sales".

The sooner Google take this

The sooner Google take this piece of ass over the better. We currently use Doubleclick and I've used it in the past (previous companies). What a piece of dung, the most unusable piece of poo poo ever. Bring it Google, make it niiiiiiiiiice.

hmm......

DoubleClick offers SEO services:
http://emea.doubleclick.com/uk/products/digital_advertising/performics/

Conflict of interest anyone?

I'm waiting for the phone call on Monday from DoubleClick's sales department - "We don't have to backwards engineer Google's algorithm, as we are Google".

Anti-trust

If DoubleClicks SEO clients all rank #1 suddenly it becomes anti-competitive and there are laws to deal with that.

Pretty sure that won't happen as Google doesn't want to have the government in their business.

I'll hazard a guess that the SEO aspect of DoubleClick will either be sold off or discontinued.

I was thinking about this

I was thinking about this over the weekend and thought "$3.1 Billion Cash" was an impractical solution considering bank transfers are so easy or that you could get a few cases of wine buy using the company amex card. But then I figured it was only 558 suit cases.
If was I making this deal I'd also love to have 558 security guards walk into Double Click each with a single suit case handcuffed to their wrist :)

The SEO part

DART's one thing - I think you missed mentioning the Performics part. Stephan Spencer blogged about the potential conflict of interest, also:

http://www.stephanspencer.com/archives/2007/04/14/google-to-own-a-sem-and-seo-firm/

we didn't miss that ;)

as stated in the post...

I believe DoubleClick owns Performics. This will aid Google's entry into affiliate marketing, but what will happen to Performics SEM service customers? Google avoided that question in their conference call.

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