I have been thinking about what Google’s acquisition of DoubleClick means for the online ad industry and I am coming to the conclusion that the only real answer is that it makes life tougher still for Microsoft.
Over on Technofile Europe Max blogged about this acquisition under the title The banner is back!. I’m not so sure that this move by Google is the sign of a big change in the balance of power between search and display in the online advertising world. As I have blogged before the big above the line advertisers haven’t moved much of their budgets onto the web yet, but I don’t see them suddenly piling into banner advertising now – they haven’t so far and I’m not sure video banners will make enough of a difference, once the novelty has worn off. My fear with banners is that people train their eyes to look at the parts of the site that give them the content they want and simply don’t see the other parts.
Rather than banner ads, the brand owners seem to be more focused on experimenting with advertising on social networks via profile pages and building presence in places like Second Life, and maybe Habbo Hotel.
You can see the logic for Google though. Display is a very large part of the online ad market and Doubleclick will significantly increase their presence there. There should be clear customer synergies too. After all that good stuff, I suspect that locking Microsoft out of the market might have been the clincher, particularly when it comes to price (which at an estimated 10x revenues was huge).
The lock out logic might also have been in play when Google acquired YouTube.
That said, Google is turning into a behemoth which has a great search product and lots of other pieces. It seems to me that they have some work to do to avoid their own peanut butter memo in 3-4 years time.