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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (20856)	4/14/2007 2:39:50 AM
From: Frank A. Coluccio	Respond to of 46821

Thanks, Bill. An extended read of the same story from the NY Times follows. --- Google Buys DoubleClick for $3.1 Billion Louise Story and Miguel Helft \| April 14, 2007 [FAC: All of this talk about "ad space," as though it were something that's fungible and fully understood. Ad space where? On one's screen? Is it the characters that constitute the HTML and markup codes that one writes and copyrights? Is it part of some magical electromagnetic spectrum-like "property" domain that could be bought and sold at auction and at the same time make a claim to a specified viewing area on one's PC, TV or other multimedia appliance? If AOL or the WSJ sells "ad space" to an advertiser, does that mean that the advertiser, or WSJ, in this case, or whomever owns the Web page, owns the real estate on your screen, or has control over the bits sent to fill that 1' x 1' square box or video display area on your screen? As curious minds, we'd like to know.] nytimes.com Google reached an agreement today to acquire DoubleClick, the online advertising company, from two private equity firms for $3.1 billion in cash, the companies announced, an amount that was almost double the $1.65 billion in stock that Google paid for YouTube late last year. The sale offers Google access to DoubleClick’s advertisement software and, more importantly, its relationships with Web publishers, advertisers and advertising agencies. For months, Google has been trying to expand its foothold in online advertising into display ads, the area where DoubleClick is strongest. Google made its name and still generates most of its revenue from search and contextual text ads. 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. “Google really wants to get into the display advertising business in a big way, and they don’t have the relationships they need to make it happen,” said Dave Morgan, the chairman of Tacoda, an online advertising network. “But DoubleClick does. It gives them immediate access to those relationships.” The sale brings to an end weeks of a bidding battle between Microsoft and Google. Microsoft has been trying to catch Google in the online advertising business, and the loss of DoubleClick would be a a major setback. “Keeping Microsoft away from DoubleClick is worth billions to Google,” an analyst with RBC Capital Markets, Jordan Rohan, said. Acquiring DoubleClick expands Google’s business far beyond algorithm-driven ad auctions into a relationship-based business with Web publishers and advertisers. Google has been expanding its AdSense network into video and display ads online and is selling ads to a limited degree on television, newspapers and radio. The sale also raises questions about how Google will manage its existing business and that of the new DoubleClick unit while avoiding conflicts of interest. If DoubleClick’s existing clients start to feel that Google is using DoubleClick’s relationships to further its own ad network, some Web publishers or advertisers might jump ship. A highflying stock in the late 1990s, DoubleClick was an early pioneer in online advertising and was one of the few online ad companies to survive the burst of the dot.com bubble. In 2005, DoubleClick was taken private by two private equity firms, Hellman & Friedman and JMI Equity, in a deal valued at $1.1 billion. Since then, the company has sold two data and e-mail advertising businesses and acquired Klipmart, which specializes in online video. The company generated about $300 million in revenue last year, mostly from providings ads on Web sites. DoubleClick’s chief executive, David Rosenblatt, said a few weeks ago that a new system it had developed for the buying and selling of online ads would probably become the chief money maker within five years. The system, a Nasdaq-like exchange for online ads, brings Web publishers and advertising buyers together on a Web site where they can participate in auctions for ad space. DoubleClick’s exchange is different from the ad auctions that Google uses on its networks because the exchange is open to any Web publisher or ad network — not just the sites in Google’s network. Offline ad sales have been handled through negotiation, but the efficiency of online auction systems has caused some advertising executives to consider using auctions for offline ads in places like television and newspapers. DoubleClick’s new exchange could function as a hub for online and offline ad sales. ------

To: LindyBill who wrote (20856)	4/14/2007 5:33:20 AM
From: Frank A. Coluccio	Respond to of 46821

Google’s ‘Really Crazy’ Acquisition Strategy April 12, 2007, 3:54 pm dealbook.blogs.nytimes.com The market for initial public offerings of Internet startups has been weak in the past few years. So for venture investors and Silicon Valley entrepreneurs seeking a way to cash out, a sale to Google, Yahoo and a handful of other Web giants has become the brass ring. So what does Google, which has about $11 billion in cash and lots of high-priced stock to use as currency, look for in an acquisition target? According to its chief dealmaker, Google likes ideas that are “really crazy.” “We look at everything very carefully,'’ Salman Ullah, Google’s director of corporate development, said Wednesday in a speech at a meeting of the Los Angeles Venture Association, according to Bloomberg News. “The really crazy ones do really well.'’ Google’s acquisitions in the past year or so have ranged from its $1.65 billion deal for video-sharing Web site YouTube (whose business strategy might not be crazy but has certainly spawned a few lawsuits) and small bolt-ons such as Writerly, a Web-based word processing application. Google’s acquisitions team consists of about 15 people who Mr. Ullah said meet with dozens of companies every week. They respond to every e-mail pitch they receive, he added. But don’t call them, at least unless you have a really good idea — they return just 10 percent of phone messages from entrepreneurs looking to sell. Echoing a former marketing line from Apple, Mr. Ullah said, “The crazy ones mean they ignore the usual restraints of investment levels required or design parameters or ‘Gee I need more servers than anyone ever thought was possible’. When you free yourselves from these constraints, you create crazy, cool things.'’ ------