BloGiza

Google Buys Doubleclick

Goog, as though looking to disprove once again the notion that they only do small purchases, has dropped another bomb on the biz-tech world. This time, we're talking about yesterday's announcement that Sergey and Larry are buying DoubleClick for $3.1B.

Some thoughts:

• DoubleClick is probably the major player in the CPM/ad serving space. Watching it getting gobbled up by Google is kind of like watching a whale swallow up a somewhat smaller whale.
  
• The deal is a whopper any which way you look at it. Goog is paying out $3.1 billion in cash for a company that two years ago was taken private for $1.1 billion and which had revenues of $300M last year. Either way, this is a huge premium, especially for a mature company like DoubleClick.
  
• I think by now we can all stop thinking about Google as a search engine company and start thinking about it as the world's biggest advertising machine. Google is king of the CPC/text ads space; acquiring DoubleClick gives them a huge presence in the CPM space assuming that they manage to digest the new company without cannibalizing their existing revenue streams
  
• The mega-valuation came about in part because Microsoft was also looking to buy DoubleClick. Google was able to outspend Gates & Co big time. Which means that Google has now officially taken over the title of the Borg of the new millenium.

A Man, a Plan, a Canal...

It's now been two months since Yahoo! unveiled their new search marketing program, the one known as Panama and something like two weeks since they started rolling the thing out. After having Google eat its lunch for the past couple of years with everything related to textual and search advertising, Yahoo! hopes that Panama will be a worthy competitor to Goog's Adwords in the text advertising space.

The new program bases its ad rankings not only on the money bid for the specific keyword(s) but also takes into account the potential click-through rate for the ad. The idea being that the new system will maximize ad revenues per ad.

I've been waiting to see how the rollout will affect Yahoo's fortunes. I have a soft spot in my heart for the perennial #2 of the Internet world. The big question is whether Panama will be enough to turn Yahoo's stock around, especially compared with Google. (Business Week seems to think no, Arrington hopes yes).

I subscribe to the school of thought that Panama will be good for everyone. More choices should mean more advertising dollars will migrate online.

Has anyone out there started using the new system? Any comments to share?