April 16, 2007
Google to Buy DoubleClick
Steve Ballmer is probably grinding his teeth over this one, or throwing more chairs. The news came late Friday that Google is to acquire DoubleClick, the premier seller of banner ads to web sites that includes lofty sites such as AOL and News Corp. These are pretty hefty properties.
Microsoft issued a terse statement asking regulators to closely scrutinize the deal over the amount of control the deal would give Google over the online advertising market. Google can track searches by web site and with DoubleClick can combine that with click trails on web sites serving DoubleClick ads. Microsoft's concerns may come from their own negative experience with regulators, or it may come from sour grapes over the fact that Google beat it and Yahoo! out in making the successful bid. It's not as if the latter two do not track searches through their engines, and it's not as if they can't combine that with DoubleClick information to compromise user privacy. All of this, of course, assumes that Google intends to make the feared privacy combination.
Regulators will have to take a look at this because of the respective market shares. Google approaches almost half the online advertising market with Microsoft and Yahoo! not even that combined. News reports indicate that various national authorities will have to take a look at this as both Google and DoubleClick are global companies. See the article in The Age from Australia for a sample of foreign market issues.
Not exactly lost in the news was Google's announcement of a deal to sell advertising on Clear Channel Communications radio stations. Clear Channel is the largest owner of stations in the United States. Google will have access to approximately 5% of the radio giant's commercial air time. The deal is to run for several years.
Stockholders and analysts have long complained that Google is a one trick pony when it came to making money. No one is still sure how they plan to make money on their YouTube acquisition other than to sell ads with the videos. If the DoubleClick and Clear Channel deals are any indication, Google will grab as much market share as possible to make sure that pony generates as much cash as possible for as long as it can. That would be one very good trick. Google is reporting quarterly revenues on Thursday after the bell. We'll see if there are any surprises.
April 16, 2007 | Permalink
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