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Google recently announced that they have agreed to purchase DoubleClick for 3.1B from two private equity firms. Not a bad return for the private equity firms who took DoubleClick private in April of 2005 for just 1.1B. DoubleClick is the largest provider of online ad technology. They help advertisers to purchase and track online advertising across the Internet and enable publishers with large amounts of traffic to sell their site's ad inventory and track that as well. In June of 2004 DoubleClick acquired Performics, an affiliate network and management company and search engine marketing agency in an all cash deal totaling between $58M and $65M. Now, seemingly in an effort to acquire the DART ad technologies and publisher relationships, Google has also acquired an affiliate network and search engine marketing agency that consequently gets paid by their customers to help them perform better in Google. Google recently dipped their toes into the affiliate business with the launch of their CPA advertisements through the AdSense network, but clearly the ownership of a search marketing agency could be a huge conflict of interest for the search giant. So what will happen to Performics? That is going to be the hot question floating around the affiliate community. Will Google integrate the affiliate network and search agency into their business or spin them off? My guess is that Performics will be spun off or acquired. Perhaps AOL will scuttle their Tradedoubler deal when they see a Gem like Performics on the block. What do you think? Should Search Engines be allowed to own an SEO and SEM company? Comments (3) + TrackBacks (0) | Category: ! Hot Topics
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Adam Viener
1. Tony on April 16, 2007 9:05 AM writes...
Looks like Microsoft may try to pay the other side of an Anti-Trust case for once. The NY Times & The Wall Street Journal are reporting that Microsoft Corp., AT&T Inc., Time Warner Inc are all urging officials to take a close look at the DoubleClick deal.
Permalink to Comment2. Peter Caputa on April 17, 2007 3:01 PM writes...
I can definitely see a conflict of interest for a search engine owning a company that does SEO.
However, I don't see any problems w/ a search engine company owning an SEM firm. It may not be fair for other SEM firms. But, SEM firms are basically customer service/sales/distribution for google/yahoo, etc. "Suppliers" have always struggled w/ balancing whether to have "distributors" or "go direct". Most companies do both, very delicately. I don't see why google can't do both.
On the much more positive side, I think that performics could help google expand their offering for more direct response/lead gen/affiliate advertisers. If google knows conversion rates, they may be able to manage risk for advertisers AND publishers. They've launched google checkout to get into commerce. In house SEM could tie adsense directly to commerce... which could prove to be bigger than the CPM display market that google just bought into through the main part of doubleclick.
Permalink to Comment3. affiliate network blog on May 1, 2007 7:20 PM writes...
I think this is a good thing for the affiliate marketing industry as a whole. With Google being a giant network and taking up much of the large advertisers, there is always room in the industry for the smaller affiliate network that can provide better service.
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