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Summary:

Google has bought the online ad giant DoubleClick, beating out Microsoft and others in the fray. The cost: an astronomical $3.1 billion in c…

Google has bought the online ad giant DoubleClick, beating out Microsoft and others in the fray. The cost: an astronomical $3.1 billion in cash, much more than the rumored $2 billion that Microsoft was intending to pay.

– It will combine DoubleClick’s expertise in ad management technology with Google’s ad platform and publisher monetization services.

This is the largest acquisition in Google’s history, and comes six months after Google paid $1.65 billion to acquire YouTube.

– DCLK was majority-owned by SF-based private equity firm Hellman & Friedman since 2005, who paid $1.1 billion for its stake. JMI Management is a co-investor in the company.

Here’s how Google describes the rationale of the deal:
– “For users, the combined company will deliver an improved experience on the web, by increasing the relevancy and the quality of the ads they see.
– For online publishers, the combination provides access to new advertisers, which creates a powerful opportunity to monetize their inventory more efficiently.
– For agencies and advertisers, Google and DoubleClick will provide an easy and efficient way to manage both search and display ads in one place. They will be able to optimize their ad spending across different online media using a common set of metrics.”

  1. Would you guys consider this more of a defensive move to keep the likes of Microsoft or Yahoo from gobbling up DoubleClick first, or is it more strategic for Google long term to improve their ad platform?

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  2. I believe you guys are the first to break this story from what I've seen. Great job!

    $3.1 billion? Wow!

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  3. I'd say this is Google not only expanding their advertising business and capabilities, but also looking to eliminate any chance for Microsoft or other major player to gain ground on Google in the advertising arena. Especially considering the amount payed for the company, it seems Google was in a bidding war… of course recently we've been hearing the rumors that it was Microsoft.

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  4. Paying almost a $1B premium over what Microsoft was rumored to offer is a hefty sum but if they keep competitors from gaining ground, it starts making sense. Google has more cash on hand to make these deals happen quickly, and they are spending money like a drunken sailor of late.

    I'm surprised Microsoft hasn't gobbled up Yahoo yet. They lose ground almost daily it seems.

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  5. Microsoft offered a very nice amount, but it becomes a no-brainer when someone comes in and offers a hefty premium. Google is beating Microsoft at their own game–buying companies on the rise that are competitors to improve their position. When will Microsoft buy Yahoo? Maybe Google will be them to it again.

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  6. Welcome to the Dark Side!

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  7. This was a nice blocking strategy from Google

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  8. I think Hellman & Friedman and JMI Equity are most excited about this deal.

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