Google Pays $3.1bn For DoubleClick, Leaves Microsoft High & Dry

Google tops its $1.6bn dollar takeover of YouTube last year with a bigger deal this year. Last Friday, Google announced the acquisition of DoubleClick, the digital ad serving network for $3.1bn in cash. Microsoft was a distant second bidder who called it quits once the stakes pushed $2bn.

According to the NY Times report:

DoubleClick, which was founded in 1996, provides display ads on Web sites like MySpace, The Wall Street Journal and America Online as well as software to help those sites maximize ad revenue. The company also helps ad buyers — advertisers and ad agencies — manage and measure the effectiveness of their rich media, search and other online ads.

DoubleClick has also recently introduced a Nasdaq-like exchange for online ads that analysts say could be lucrative for Google.

Though competitive bidding pushed up the prices, Google could have settled for less. Probably, they wanted to take no chances. Because with DoubleClick, Google has access to the display advertising market where Yahoo! is (was) No.1 player.

Google could have built another YouTube as well as another DoubleClick. In fact, they already had Google Video when they paid that unbelievable sum for You Tube. Taking over already established leaders in niche segments has worked for Google so far and DoubleClick is another example of the same strategy.

In fact, DoubleClick already has a customer base of more than 1500. Thus, there is no development period and the acquisition pays for itself from day one. Moreover, DoubleClick establishes Google in online advertisement like never before. Now, the whole spectrum of online advertising is dominated by Google. This is what Google has paid for. Though many think it to be an expensive take over, with time we might see it isn’t a high price to keep and Yahoo! and Microsoft away.   

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