The DoubleClick brand, AdCenter, hasn’t been much of a competitor to the big boys, but a buyout from Microsoft could be what both companies have needed to get a little bit further up the ladder of online advertising. Supposedly, the price tag of $2B from private equity firm Hellman & Friedman may be a little too high in my mind considering they just paid a little more than half that a year ago for the same company. Is it worth that much?

What would it mean for Microsoft though?

If Microsoft were to expand its business by buying DoubleClick, this would not be its first acquisition in the field. Last May, it bought Massive Inc., a specialist in placing advertising within video games, and also DeepMatrix Corp., a Web analytics company, intending to incorporate their activities into its adCenter platform.

Selling advertising “is clearly core to what Microsoft does online. For MSN and related properties, advertising is the key revenue stream, and DoubleClick would be a good fit,” said JupiterResearch’s Elliott. However, Microsoft has also put a great deal of effort into developing its own system, and so could go it alone, he said.

Is that what Microsoft wants to do? They’ve already got their own platform they’ve been developing. Is buying a competitor’s options to further strengthen their unit the best move? I think it probably would be. There’s obviously economies of scale, but I don’t think the $2B asking price is quite there yet.

It’s just so hard to figure out nowadays. Now, $2B a few years ago, you could have done much more with it then. Now it’s just a drop in the bucket. Who are we kidding? If someone walked up to you and said “Here’s $2B. Use if for your business.”, would you buy DoubleClick if you were Microsoft? I wouldn’t, not without a bit of shopping first.

Sources: DoubleClick eyes sale, talks with Microsoft, Microsoft Buying DoubleClick?, Microsoft Woos DoubleClick

Post from: EveryJoe

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