It’s official, Google has acquired on-line advertising outfit DoubleClick for $3.1 billion. The sky high price though may be less a function of DoubleClick’s actual worth and more about what it can strategically provide for Google – and what it could have done for Microsoft, who were also bidding for the company.
Through this acquisition Google has gained a vibrant advertising business for banners, videos and other so-called display-ads intended to promote brands rather than to generate immediate sales. It’s widely known fact that DoubleClick has relationships with almost every major online publisher and almost half of all online ad agencies. This means that Google can now go head to head with its main search rival Yahoo! in the display advertising business.
To get an idea of why this is so important, analysts predict that the paid search advertising market will account for more than 40% of the $19.5 billion expected to go to on-line advertising this year (Mar. 7 eMarketer report).
David Rosenblatt, CEO of DoubleClick, made an interesting comment about this acquisition – he’s excited at the prospect of using DoubleClick’s relationships and Google’s targeting to sell off-line ads in the future. He also believes that DoubleClick’s existing clients wont think of this as a threat, but as a tool that makes advertising easier : ” I think they will see this as a best-of-breed combination – the leading platform technology provider and the leading monetization engine”.
Even more power for Google.