The Possible Importance of DoubleClick
DoubleClick has been the rumored apple of Microsoft’s eye since reports began popping up last week about a possible acquisition of the third-party ad firm. Things got even more interesting earlier this week when Google was thrown into the mix.
The magic number seems to be around $2 billion for DoubleClick. Some reports indicate that Google’s presence in the acquisition race may have pushed the price up to this height, which might make it difficult for Microsoft to match.
DoubleClick’s value is fairly obvious. It would give Google a huge help in terms of its graphic display ad arm, which has not been nearly as successful, as pronounced, as its contextual ads and sponsored results. DoubleClick’s strong relationships with over 1,500 clients would also be tempting for any suitor willing to pony up exorbitant amounts.
Yahoo! and AOL are also reported to be interested in DoubleClick, but Microsoft might be the one company that stands to gain or lose the most when all is said and done.
While Google could feasibly develop its own similar platform (and it just might be), a Microsoft purchase of DoubleClick would help it catch up to Google in the online advertising game.
Mark Simon, vice president of industry relations at search marketing agency Did-it, says that "DoubleClick’s Dart platform is one of the best in the business for allowing both advertisers and publishers to manage display advertising over publisher networks. Having Dart in-house would put Dart for Publishers — the publisher segment of the Dart technology — at Microsoft’s beck and call. That ownership could seriously boost Microsoft’s ability to monetize its vast publisher presence, the MSN portal."
Simon also talks about the possibility that Microsoft could purchase DoubleClick as part of a larger effort to acquire fellow Web giant Yahoo!. A Microsoft/Yahoo! combination has been a delicious source of conversation and speculation, albeit one that has not seen enough concrete evidence of materializing.
If Microsoft were to purchase DoubleClick, a subsequent acquisition of Yahoo! would combine two of the top three search engines, two of the top four Web properties in the U.S., and back-end technology strong enough to take advantage of Yahoo!’s strength as a publisher, according to Simon. That could be a formidable foe for Google to take on.
However, if Microsoft loses out on the bidding war to Google, then it would fall even further behind its arch nemesis and might never recover. Chances for that are slim as it is, and a hit here would probably confirm its remoteness. A pricey Yahoo! acquisition would probably be the last resort for Microsoft, and even then, that duo would be nothing to scoff at for the search giant in Mountain View.
DoubleClick seems to mean a lot more to Microsoft than it would to Google, so it will be interesting to see how this pans out. AOL should not be counted out either, as it utilizes technology provided by DoubleClick, and would stand to gain a lot with an acquisition, while avoiding the prospect of padding a competitor’s pockets in the event that DoubleClick falls into one of their hands.
Is DoubleClick worth $2 billion? Most likely not. But its importance, especially to Microsoft, is difficult to deny.
Sources:
http://publications.mediapost.com/index.cfm?fuseaction=
Articles.showArticleHomePage&art_aid=58031
http://blogs.zdnet.com/BTL/?p=4769
http://www.webpronews.com/insiderreports/2007/04/02/
google-adds-to-doubleclick-intrigue
