Hello, Office Depot? Mr. Ballmer Needs a New Chair … Yes, Again.
Larry and Sergey believed we could develop a better product than the existing online advertising offerings, but we knew that [DoubleClick] could be a fallback if Google’s ad program did not work.”
Odd how things come full circle, isn’t it? Years ago, before Google AdWords became ubiquitous across the Web, there was DoubleClick, an ad management and reporting company that did big business serving up banner ads (perhaps “GET YOUR FREE X10 VIDEO CAMERA! CLICK HERE!” rings a bell?). So much business, in fact, that Google founders Sergey Brin and Larry Page thought of it as a safety net if Google’s AdWords program were to fail. Ironic then, isn’t it, that the search leader today said it plans to buy DoubleClick for $3.1 billion in cash.
$3.1 billion. That price seems bit steep for DoubleClick, which fetched just $1.1 billion when it was last sold in 2005 and has since divested some portions of its original business. It’s also quite a premium over the $2 billion Microsoft was reportedly willing to pay for the the online-advertising company. But for Google, paying $3.1 billion to snatch DoubleClick from Microsoft’s waiting arms was likely money well spent. After all, such an acquisition would have given Microsoft an instant and strong position in the market for serving display ads on other companies’ Web sites. Thwarting that was a nice strategic coup for the the search giant–boosting its presence in the area of Internet display advertising and dealing an ugly blow to Microsoft in the process.