As some in the advertiser community had advocated, Google has decided to sell off the Performics division that came along as part of the DoubleClick acquisition. This would have put the agency in a conflict of interest position. Labels: doubleclick
Next on the agenda...
Ahem. Microsoft? Don't you own ...
[Here's the official Google post. Hat tip Techmeme.]
Posted by Andrew Goodman
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Friday, January 18, 2008
This short item about the Google-DoubleClick merger made it into B2B magazine. Although it appears so from the one quote, I'm not actually a full-on critic of the merger. I see it for what it is, a move that solidifies Google's dominance in the online advertising field, but I also noted the "glass half full" scenario, which is that this merger could allow Google to implement an innovative exchange model for online display advertising that would be significantly better than their current content targeting program in AdWords. Moreover, Google's motivation in terms of their continued wish to sign up new advertisers and publishers in their network, coupled with their "already scaled" efficient business model, means they might heavily discount any markup they charge for operating an ad exchange. That part of my comment didn't make it into the article. Labels: doubleclick, google
What also didn't make it in was my note that Google would probably have to divest itself of Performics to avoid conflicts of interest in media buying - a topic that I went into some depth on. Kevin Lee must have said about the same thing, as that view was attributed to him.
As a market maker and platform builder, Google might be big and scary, but they're also likely to be a reasonably cheap and efficient enabler of business. (Sound familiar... like last generation's biggest technology monopoly?)
Posted by Andrew Goodman
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Tuesday, November 20, 2007
As is often the case, Danny surprises us with a level of detail in his rejoinder to Senators Hatch & Kohl about the impending Google-DoubleClick merger. Labels: doubleclick, google
The short answer seems to be that Danny defends Google's position against certain distortions.
I'm not sure I feel as certain about the issue, but Danny has certainly clarified the logic. Antitrust legislation probably needs to ask whether it would be legitimate and likely that the company under review would grow into a dominant position in a new area even without the acquisition, or if this event would "make" the new entity into a monopoly where it was once a "player" in a more competitive environment.
Based on global economic precedent, you have to wonder what it all means. Does anyone regulate the consolidating beverage industry? Does Procter & Gamble get questioned for its massive reach and control of shelf space?
Did anyone question Quaker Oats buying Snapple? Sounds funny now, doesn't it? That's an acquisition that didn't lead to global dominance. In fact, Snapple tanked as a brand. Some acquisitions can just be expensive failures.
Here, the acid test needs to be how dominant the acquired company is - what it really controls in the industry it operates in, and whether that will lead to total dominance for the acquiring company. Google overpaid for DoubleClick based on the momentum of the industry and Google's favorable stock price and cash reserves. If they'd picked it up for $500 million a couple of years prior, no one would have whispered anything about regulation.
You could almost look at the parallel with Google Analytics and Google Website Optimizer. Google acquired Urchin, transformed and integrated the product, and moved into an increasingly dominant position in web analytics. With Optimizer, they developed a product in-house, fast gaining market share -- rather than acquiring Offermatica or similar software companies. The point is, none of these acquisitions arguably create a "closed territory" for a regulated service or something built on scarce public resources, such as may exist in banking, telecommunications, or transport. They still operate in the software industry where buyers have many choices, and there are no serious barriers to entry.
Until you get to Microsoft's size and level of dominance at the behavioral level, that is. And that's the territory Google's moving into. So literally taken, no move by Google is technically afoul of the law, but eventually, as with Microsoft, it all adds up. And then the feds will go looking for faults. And they are sure to find many.
To restate: the fact that the impact of all of Google's integrated activities is to give it massive control over multiple industries, enjoy monopolistic advantages, and become a leading repository of business and personal data, does not necessarily mean that a particular acquisition like DoubleClick conflicts with the letter of the law.
I guess the question will be, is this the straw that broke the camel's back?
Posted by Andrew Goodman
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Tuesday, April 17, 2007
A few weeks before the recent announcement that Google is buying DoubleClick, DoubleClick announced it'll be developing a "NASDAQ-like exchange" for the buying and selling of online advertising. Proof positive that the online ad space continues to heat up, rather than diving into an irrational "bust" as in 2000-2003. Labels: anand subramanian, content targeting, contextual ads, contextweb, doubleclick, google, jay sears
Wait a minute, though, you may be saying. Aren't ad networks and the way ads are bought and sold today somewhat "market-like"?
Not as much as you might think. Check out Google's current contextual offerings, for example. As a publisher, do you think you can signal to the advertiser using an "ask" price? Do you have much control at all if you join one of the various ad networks and let their system allocate inventory, as opposed to using your own inside sales force? Nope. And what about the ability to stand out as a quality publisher amidst the crowd of remnant type inventory? Again, tough to do. So, tough to monetize to your fullest potential. Because the current market maker is not facilitating a true market. In that sense, DoubleClick's new promised offering, and Google's acquisition of DoubleClick, could constitute a significant step forward in online advertising efficiency.
DoubleClick won't be the only one working on a great way of putting online ad buyers and sellers together. ContextWeb, quietly licensing its matching technology since 2000, and more recently, acting as a media middleman in its own right, is working on a new "name your price" functionality in a new, highly automated ad marketplace system. I had the chance to walk through a demo yesterday with CEO Anand Subramanian and VP of Business Development Jay Sears. While the release isn't slated for a couple of months, publishers are already being targeted for a beta signup. The hook, "Ready to Make More Money than AdSense?," is not new to publishers, admits Subramanian. "Typically a publisher will become dissatisfied with their AdSense earnings, will install code from a competing network, but that will be even worse, so it's right back to AdSense," he says. But that's because these competing networks don't present a credible alternative. They represent the old school of what ContextWeb calls "Yet Another Ad Network," with fewer features, not a true marketplace, and no critical mass of buyers and sellers.
The company won't yet disclose the full range of features of its new system. To me, it seems to address the combined needs of advertisers and publishers very well, leaving neither the "prime inventory" nor the "long tail" unaddressed. ContextWeb's quiet long-term presence in the space seems to have given the company a wealth of ideas. A decent revenue stream from its current agency relationships, plus venture funding from, among others, Draper Fisher Jurvetson, has given them the long view needed to build a better platform.
If you're a publisher of quality content, here's hoping the days of "Yet Another Ad Network" will soon be a thing of a past in your balance sheet.
Posted by Andrew Goodman
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Monday, April 16, 2007
Because I'm a lazy writer, I'll begin this next sentence thusly: Labels: antitrust, doubleclick, google, microsoft
"In the ultimate irony..." Microsoft invokes antitrust in response to the Google-Doubleclick deal.
BTW, stay tuned for my forthcoming post on the "Brain Exchange" over at ContextWeb on the topic of "Is Google Too Powerful?" My general (and somewhat evasive) commentary was written without the DoubleClick deal in mind.
Posted by Andrew Goodman
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