Google Gets Its Social Ad Start-Up by Buying Wildfire
Google tried and failed to buy its way into the social ad business a couple months ago. This time, it got it done: The ad giant has picked up Wildfire, which helps marketers manage their presence on social networks like Facebook and Twitter.
No comment from Google about price, but people familiar with the transaction tell me it’s around $250 million, plus earnouts, employment agreements, etc. I’ll try to narrow that down a bit for you as the day goes on. Wildfire raised a reported $14 million over four years. [UPDATE: As TechCrunch and others have noted, some of Wildfire's investors are saying they're getting $350 million for the company; one of them I talked to insists this number is before earnouts and the like. I'm reasonably confident Google will have to disclose a price in its next 10Q or perhaps before that, so we'll see what they tell shareholders.]
The logic here is straightforward: Google will integrate Wildfire into its growing display advertising “stack,” which is anchored by DoubleClick and Google’s AdX exchange. The idea is to convince marketers that they can buy both social ads and conventional display ads from Google, even if they want to buy them on competing platforms like Facebook.
This is one of Google’s least surprising buys, since the company already tried to get its hands on Buddy Media, a Wildfire competitor. But Buddy went to Marc Benioff and Salesforce.com in June, so Wildfire was the next logical candidate.
Buddy passed on Google at least in part because the company was concerned about getting the deal through antitrust regulators. And like just about every deal Google does these days, it wouldn’t be surprising if the Feds took a look.
But since social ads are one of the few categories where Larry Page and company are far behind the competition, the Google guys seem confident that this one won’t be a problem.
And what will Facebook think about their biggest competitor buying a service that specializes in Facebook advertising? Good question, and I’m asking Facebook now. (Update: “We aren’t commenting,” says Facebook rep Brandon McCormick.)
But my hunch is that even if Sheryl Sandberg wanted to shut the door on her old company, she wouldn’t do it for fear of creating her own regulatory problems. Which means the only question is whether Facebook will be an enthusiastic Wildfire partner, a heel-dragging partner, or somewhere in between.