This just in folks (for anyone who really cares about this) – Google has announced that they have agreed to purchase DoubleClick for $3.1 billion in cash. Google is buying DoubleClick from private equity firm Hellman & Friedman which bought DoubleClick back in 2005 for $1.1 billion. Yup.. they made roughly $2billion in this deal. Amazing huh?

Ah yes.. I remember my DoubleClick days quite vividly and this marks an interesting end to the company in my opinion. I worked for DoubleClick for roughly 5 years and saw the good times and bad. So why would Google purchase DoubleClick you might ask? Well.. in my opinion it boils down to two things: Clients and Reach.

On the client side, this is an obvious factor. DoubleClick’s been in the Internet advertising business for many years now and is arguably one of the founders of the concept of Internet advertising. Being headquartered in NYC also helps because it’s practically in the middle of advertising capital USA – if not the world. So now Google has this list of clients and that translates to them being able to offer even more services than ever before – including the existing ones that DoubleClick offers.

Now on the reach side, there’s DoubleClick DART. Why is this important? Although many sites utilize Google Adwords and Adsense technology, many more still utilize DoubleClick for banner ads and rich media content delivery. From Dart for Publishers to Dart for Advertisers, Google now has a myriad of ways to offer Internet advertising solutions to customers. But wait.. there’s more to this. DoubleClick still has an enterprise level adserving solution called DART Enterprise (which they got when they bought Netgravity). It’s not clear how many clients still use DART Enterprise but it’s a great solution for those who want to roll their own adsystem in house. There’s also DART Search for those who need paid search (though really.. I think Google has this covered). Finally, there’s several web analytics like services from DoubleClick which would make a tidy sum for Google.

Ok.. so all this makes sense right? To some degree yes. Here’s the reality side. DoubleClick makes 150 million in revenue a year. So Google basically paid 20 times earnings for the company.. which .. I guess it’s ok. What about intellectual property you might ask? Yes DoubleClick certainly does have quite a bit of IP.. but most of the real brains of the company are either gone or probably on their way out already. The company suffered a brain drain over the years and to be honest with you, it’s been about maintanence mode ever since. So I wonder what usefulness the company will be to Google in the long run. I believe in the notion that this was all about the client list and the network reach established by DoubleClick. The technology is an afterthought in my opinion.

So did Google have to do this? No.. but the fact that Microsoft might have decided to purchase DoubleClick certainly was a thought that crossed Google’s mindset. With Microsoft developing their own line of advertising products, it’s probably better to keep DoubleClick away from them by buying them outright.

Just some food for thought on a Friday evening.

Oh.. btw – it seems that DoubleClick serves around 60 billion ads a month. That boils down to roughly 2 billion ads a day..which means that ad traffic for DoubleClick hasnt really changed much in the last 4 years.

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