Doubleclick Deal: Did Somebody Say Google's Too Powerful?

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.

Reader Comments

Google and DoubleClick

April 17, 2007 7:43 PM

I believe this is a bad investment motivated by the competition between Google and Microsoft. I hope what happened to Excite search engine (a one time $40 billion corporation) will not happen to Google. It seems human beings just don't learn from past errors.

Carter Powers

April 30, 2007 2:06 PM blog has an interesting post that visually maps Google's common relationships with DoubleClick. Here is the excerpt:

Google's acquisition of DoubleClick may have been the culmination of multiple 'behind-the-scenes' relationships between the two companies. Common relationships between Google and DoubleClick that IntellectSpace’s Knowledge Map discovered are:

-Eric Schmidt's (Google's CEO and former Chairman) is on the Board of Siebel, and likely crossed paths with Peter Prainik, who was a senior VP at Seibel before assuming the post of Chief Marketing Officer at DoubleClick.

-Ann Mather spent over 10 years at Disney before becoming a Director of Google, and Thomas S Murphy was the long-time Chairman of Disney prior to becoming a Director of DoubleClick.

-Patrick J Healy, Mark E Nunnelly, and David N Strohm, who are all board members of DoubleClick, attended Harvard Business School with John Doerr, who sits on Google's board of directors.

-Kavitark Ram Shriram sits on the Board of Google and is an alumni of Michigan University with Kevin J O’Connor – DoubleClick’s founder and former Chairman and CEO.

To view an interactive Knowledge Map of Google's and DoubleClick's relationships, paste the following URL in an Internet Explorer:

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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