Posted by: Rob Hof on April 13, 2007
After a week or two of speculation, the deal’s done. It’s Google’s biggest deal ever, by far, and all cash—a good chunk of Google’s $11 billion in cash and short-term investments, in fact. Apparently, it was worth a lot to Google to keep DoubleClick out of the hands of Microsoft, reported to be another bidder.
From this bet and conference-call comments by Google execs, it’s clear the company sees this as a huge part its expansion strategy, and no wonder. Doubleclick’s display ad expertise and presence instantly—well, not instantly, since it appears the deal could take some months to close—catapults Google into a leadership position in online display ads, complementing its dominance in search ads.
Two weeks ago, our cover story asked, “Is Google Too Powerful?” If it looked that way before to a lot of people, it sure has to look all the more so today. As one commenter on TechCrunch put it: “Wow, Google owns the web advertising world!”
Update: Greg Sterling notes that with DoubleClick, Google gets a “real powerful branding vehicle that they didn’t have before.” That’s especially important as display advertising shows more potential growth than search ads. Even more, says Forrester Research’s Charlene Li, this gives Google a perch from which to see how ads play outside its own network, on rival portals that are DoubleClick customers, such as Yahoo!: “They can see the entire marketing funnel from beginning to end.” With Checkout, Google even has a fast, automated payment mechanism. Maybe GoogleClick will turn out to be even more powerful than Googlezon.