IT Masala

Google announced on Friday that it will acquire Internet advertising company DoubleClick for $3.1 billion in cash(the largest purchase in Google's history). The deal, which follows Google's $1.65 billion acquisition of video-sharing site YouTube by only six months, is thought by some analysts to have been expedited by the interest rival Microsoft showed in DoubleClick.

Google will integrate its targeted search-ad technology with DoubleClick's graphic display ad technology, allowing it to offer a wider array of options to advertising customers( like Time Warner's AOL and News Corp.'s MySpace) .

What is DoubleClick?

DoubleClick, which connects ad agencies and marketers with website publishers, was bought by private equity firm Hellman & Friedman for $1.1 billion in 2005.

The New York Times is reporting that DoubleClicks revenues are about $300 million/year.

Comments from blogsphere : 

Google watcher Donna Bogatin concludes:

Although Google reigns supreme in the category it catapulted to online advertising fame—PPC text ads—it has not achieved similar success with “image ad” serving.

The acquisition of a dedicated banner ad serving firm such as DoubleClick, with its established clientèle, would complete a virtuous circle of powered by Google online advertising:

Pay For Performance Text Ads,
Pay For Action Referral Ads,
Pay For Delivery Display Ads! 

Michael Arrington @ TechCrunch:

10x revenue for a mature company is a…healthy…valuation. At least part of the acquisition price appears to be due to a desire by Google to keep this asset out of Microsoft’s hands.

Discussions: Screenwerk, John Furrier, GigaOM, Basement.org, Search Engine Land and Leathern