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Today, Google snatched DoubleClick from the jaws of Microsoft, paying $3.1 billion after a long bidding war between the two Valley heavyweights. The payment will be made in cash to JMI Equity and Hellman & Friedman, a San Francisco-based private equity firm. Most view DoubleClick as a distinctly “Web 1.0” company, but by adding the firm to its arsenal, Google immediately leaps even further ahead of any other contextual advertising competitor, benefiting from DoubleClick’s vast display advertising network.
Google CEO Eric Schmidt said, “DoubleClick's technology is widely adopted by leading advertisers, publishers and agencies, and the combination of the two companies will accelerate the adoption of Google's innovative advances in display advertising.” While some observers appear to be relieved that Microsoft lost the bidding war for DoubleClick, there are other concerns. Allowing so much of the online advertising pie to be controlled by a single company, Google, could put online publishers at an unfair disadvantage once the dust settles and the price wars begin. As an Internet publisher, getting your ads from anywhere “but” Google just became much more difficult.
Last year, DoubleClick brought in roughly $300 million in revenue, making the purchase an immediate profit engine for Google. DoubleClick CEO David Rosenblatt weighed in with a cute bit of delusional talk: “Google is the absolute perfect partner for us.” Meanwhile, if you live in the Valley, go to your window and squint at the northern horizon toward Washington—that smoke you see in the distance is coming from Steve Ballmer’s ears. Don’t expect the Redmond bottle rocket to take this lying down!
