Microsoft’s big spending ways

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After buying TellMe Networks for over $800 million, Microsoft seems to be ready to open its check book again. The Wall Street Journal (via Bloomberg) reporting that Microsoft is in talks to buy ad-serving network, DoubleClick. Microsoft’s interest in this company is basically driven by Redmond-based software giant’s desire to compete with Google: at any cost.

DoubleClick has technology called Dart, which can help better targeting of ads. The price tag being thrown around: $2 billion. Not bad for a company that was an-almost road kill after the dot-com bust. Hellman & Friedman paid $1.1 billion in 2005 when it took DoubleClick private in 2005. They sold off some businesses for about $525 million, so for H&F this could be one nice exit.

The price tag is hefty even for company insiders. Is technology worth the price? DoubleClick’s big customer is AOL, which could walk away from Microsoft right into Google’s arms if this deal does happen.

So what do you think? Does this deal make any sense for Microsoft?

6 Comments

Steve Morsa

Hmmm…thought it sounded pretty logical until I read Don Dodge’s comments…now it sounds like it might be too expensive; even with great synergies, etc…

If 2 billion figure is accurate, that would buy a lot of $10-50 mill innovative companies and technologies…

…of course, they could always launch a new PPC ad platform where the advertisers; using stored personal profiles; select and bid directly on sets of people’s actual demographic traits; ie, “I’ll pay $15 for every 45 yr old, married w/2 children, homeowning and football-loving, lives in zip 90210 male looking for a plasma TV who clicks on my ad”…or; in another embodiment; allow “searchers” to input a data/character stream in their search box like:

“male +45 +married +2 kids +own home +football +plasma TV +90210”

webtech

So microsoft is planning to buy doubleClick for the technology or the network? Microsoft already have their own technology – adcentral. So why not spend this $2 billion to improve their platform. Most likely answer is the second answer. They may want to acquire the reach of doubleClick. Is it both? Any better answers?

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