Google Buys DoubleClick for $3.1 Billion

Internet titan Google has decided to flex some of its fiscal muscle, announcing a $3.1 billion agreement to acquire online advertising firm DoubleClick, itself one of the largest players in the online advertising arena. The deal expands Google’s dominance of the market, giving it both new technology to compliment Google’s existing AdSense offerings, but also DoubleClick’s considerable demographic data and client base. Cash from the deal goes mainly to DoubleClick’s primary owners, private equity firms JMI Equity and Hellman & Friedman, who took DoubleClick private in a $1.1 billion deal in 2005. The acquisition is Google’s largest to date, and weighs in at nearly double the size of the company’ much-publicized $1.65 billion acquisition of video sharing site YouTube in October, 2006.

The DoubleClick acquisition is a quick way for Google to establish a major presence in the display and brand advertising markets as a way to compliment Google’s existing text-based ad system. Google says it remains committed to ensuring that advertisements are relevant and don’t detract from the user experience, while at the same time offering advertisers and site operators new opportunities to accurately target potential customers and monetize their sites. “Sponsored information served by Google has always been, and will always be, clearly distinguished from objective content available via our search results and across our partner network,” wrote Susan Wojcicki, Google’s Vice President of Product Management, in Google’s official blog. “We want you to find the information that you are looking for—be it in an ad or elsewhere—quickly and without hassle. We know that our collaboration with DoubleClick will serve and advance this goal.”

Google’s move may also represent an outmaneuvering of software giant Microsoft, which was also reportedly in talks to acquire DoubleClick. AOL and Yahoo were also rumored to be pursuing the company.

DoubleClick was one of the first successful online advertising ventures, getting significant traction in the mid-1990s when Web advertising first took off. The company was the focus of consumer privacy concerns for using cookies to track Web users across DoubleClick’s thousands of advertising partners: by accepting a DoubleClick cookie from one DoubleClick client, the company could monitor the pages visited by users as they visited pages of other DoubleClick clients; the aggregate information enabled DoubleClick to profile the interests and activities of Web users. DoubleClick maintained that enabled them to serve the most appropriate ads to those users; consumer advocates saw it is an invasion of privacy.

The DoubleClick acquisition is expected to close by the end of the year, subject to regulatory approval. According to Google’s FAQ on the acquisition (PDF), Google plans to let DoubleClick operate independently until integration plans are completed.

Editors' Recommendations