Overview – What is Google and DoubleClick?
Google is a digital media content search engine that with the time became the most popular one in the Web. Google ranks web pages in a list of hits by giving weight to the links that reference a specific page.
DoubleClick is a digital marketing company. This company is a reliable, experienced, innovative partner who can help you capitalize on the opportunities that digital media bring, and meet the challenges they present.
The Acquisition
On Apr. 13, 2007 Google announced that it would pay $3.1 billion for the advertising outfit DoubleClick. The objective of the purchase was to help Google to gain a greater foothold in the display advertising market.
DoubleClick has something that Google, doesn’t: a vibrant advertising business for banners, videos, and other so-called display ads often intended more to promote brands than to generate immediate sales. DoubleClick currently had relationships with virtually every major online publisher and more than half of the online ad agencies, counting Time Warner’s Sports Illustrated, Friendster, and Viacom’s MTV Networks among its customers. Google, on the other hand, has made much of its billions by serving tiny text ads related to searches for relatively smaller businesses hoping for some kind of immediate interaction with a customer.
Google interest on purchasing the online ad business DoubleClick for $3.1billion has worried companies like Yahoo. Yahoo’s concern refers to an increase on prices for online advertisements. However, the truth is that with this merge, Google is trying to become the strongest and dominant online display advertisement as it is right now with the search engine, where it controls over 80 percent of revenues.
In Yahoo!’s first public expression of concern about Doubleclick, Andrew Cecil, public policy head, said: “Combining Google’s search business with Doubleclick’s ad technology will strengthen Google’s dominant position in Europe. The competitive landscape for online advertising will be negatively impacted. The end result will be higher prices for internet publishers and advertisers and less choice for European consumers.”
Our opinion
Google has already an advertisement business called Adsence. With Adsence, Google controls an estimated 25% of the European market. Owning Doubleclick, however, could give Google the ability to expand its display business much faster than competitors. And Internet publishers could be forced to give Google a larger slice of their ad revenues.
Moreover, Doubleclick has technology which helps advertisers to manage their campaigns – sending back information on cost and number of people reached. This technology will give Adsence a value – added feature that could get the customers attention.
Some benefits of the acquisition:
1. DoubleClick will gradually start to leverage Google’s targeting capabilities with its customers
2. DoubleClick for Google is keeping it out of Microsoft’s hands. At the moment, Microsoft poses little threat to Google’s search advertising business. Its share of Internet searches has been on the decline and dropped to less than 10% in March. DoubleClick could have changed that for Microsoft. DoubleClick serves ads on both Time Warner’s AOL and News Corp.’s MySpace, two of the Web’s most popular properties. But if Microsoft had acquired DoubleClick, it could have had a competitive position at the two companies, jeopardizing Google’s expensive search agreements. It could also have given Microsoft a much greater search share.
2 Comments
October 22, 2007 at 2:13 pm
We can see benefits for Google of the acquisition:
1.Entering the display advertising market easily and striking Yahoo.
2.Blocking Microsoft from entering searching market.
But for users ,there will be a deadly risk－No one can ensure keeping the safety of privacy through googling!
DoubleClick is notorious for its techonology： browser cookies are set to track users as they travel from website to website and record what commercial advertisements they view and select while browsing. It has been a controversial issue whether the techonology aggressive user’s privacy. And now, Google,the largest search engine with the most user of the market,own the techonology. How will Google dealing with the collecting data?? Can Google ensure a poper privacy strategy?? It will be the next problem to concern about.
October 22, 2007 at 3:23 pm
Google bought Doubleclick for 3.1 billion USD, which is almost twice as much of what they paid for YouTube. It was believed that the high price was a result of Microsoft high liquidity. One of the first questions about the outgoings was how it would affect the pricing on the web advertisement market.
Recently, there are numerous acquisitions of global famous companies, we think that is a sign of the fact that global market is getting more and more mature. This is a fantastic thing because those big traditional enterprises can help some small rising companies of multimedia development. At the same time, there are more and more participators who will make the whole market more active.