Although I need to work on a brief for, I can’t help comment on Google buying Doubleclick which it appears was just announced today.
Google to acquire DoubleClick for $3.1B – Yahoo News
Seeking to expand its already well-honed ability to sell targeted Internet advertisements, online search leader Google Inc. said it has agreed to pay $3.1 billion in cash to acquire ad-management technology company DoubleClick Inc.
The two companies announced the deal after the markets closed Friday. The boards of both companies have approved the takeover, which is expected to close by the end of the year.
New York-based DoubleClick helps its customers place and track online advertising, including search ads, which Google â?? more than its nearest search competitors Yahoo Inc. Nasdaq:YHOO – news and Microsoft Corp. â?? has turned into an extremely lucrative business.
This is a strange pairing for three reasons although there are obvious attractions. First, Google built itself on a promise not to use banner advertising, a business Doubleclick helped pave the way for. Sure, Google has been testing graphical ads for a few years now, but those were limited. With Doubleclick in the family, Google will be fully reliant on the banner ads they spurned for so long. When the going gets tough, and it will in the cyclical advertising market, will Wall Street force Google to utilize the Doubleclick relationship to place branded, graphical advertising all over its site? Is it already too late for them? This will be the most interesting aspect of this engagement to watch from the sidelines.
Second,does this mean Google didn’t have the engineering experience or expertise to build out a branded advertising unit. I find this interesting and somewhat strange because they already have most of the things needed for a branded advertising network. They have ad targeting technology used for adwords, they have relationships with most major advertisers, and they have an extensive network of publishers, many of whom will consider putting branded advertisements on their site for the right price.
Third, Google holds itself above the rest with regards to privacy. On the flip-side, Doubleclick has been a privacy pariah since 1999 when it purchased Abacus Direct, an offline direct marketing company, and promptly announced it would combine anonymous profile information collected though its adservers with personally identifiable information collected by Abacus. The result is history. After lifting the lid on their plans, Doubleclick was quickly scalded by public and government reaction that saw it investigated by the FTC and several states, forced them to withdraw those data merging plans, and eventually the parting of ways with the Abacus Direct unit.
It’ll be interesting to see how users react to the change in ownership. My guess is that most people are now used to being profiled and tracked and that will shrug their shoulders. This isn’t 1999 when tracking and profiling online was new and most people said “Huh? Who!?” when they first read or heard about Doubleclick and Abacus. Now, Google is a trusted company with obvious brand recognition. Others may sound concerned but will quickly trade privacy online for the free products they’ve become accustomed to. The rest use AdBlock Plus and regularly clear cookies.
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