Yahoo Follows Google's Purchase Of DoubleClick With Deal Of Its Own

from the right-back-at-you dept

After Google’s acquisition of DoubleClick, it was widely assumed that many smaller online advertising firms were “in play”. The fact that Microsoft was also a DoubleClick suitor combined with the fact that Google’s rivals couldn’t afford to fall too far behind meant it was only a matter of time before another deal was made. Hoping to provide an alternative to the growing Google behemoth, Yahoo has announced the purchase of privately held Right Media, a company in which it already has a 20% stake. Yahoo says that it will create an open ad marketplace, which sounds a lot like the idea that DoubleClick had cooking up before the Google purchase was announced. This isn’t likely to be the last deal. Microsoft’s Steve Ballmer recently said that his biggest regret was that the company has come late to the online advertising game, which suggests that the company will probably make a deal to play catch up. Now that its two chief rivals have made these purchases, the pressure on Microsoft to get a similar deal done has been ratcheted up.

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Comments on “Yahoo Follows Google's Purchase Of DoubleClick With Deal Of Its Own”

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GoblinJuice says:

Too diversified?

I’m not a Microsoft fanboy or hater, so take this for what it is – a complete outsider than doesn’t have his heart in the fight.

It seems, to me – maybe I’m wrong, that Microsoft is trying to do too damn much. It’s trying to be The Only Tech Company.

You’ve got Vista, Xbox, Zune, whatever the hell MSN is supposed to be, and now advertising? (I’m not even going to bother trying to list all of the other services/sectors MS is involved in. I couldn’t, even if I wanted to.)

I just can’t see one company being #1 in all these fields. Or even #2.

If I were Ballmer – I’m not and never will be, but I’d focus my attention on being #1 in a one or two or maybe three… not trying to conquer the friggin’ galaxy and failing.

Iqbal Ahmad says:

Google's Purchase Of DoubleClick

Google’s purchase of DoubleClick combines the two largest providers of online advertising delivery and is going to reduce substantially the market competition on which Web sites rely on to provide advertising and gives Google the power to control 80% of the online ad market. Microsoft and other companies are crying foul over the deal and hope to get government to look more closely at the deal.
People increasingly compare Google to Microsoft in the mid-1990s—at the height of its power, arrogant at times. Is that a fair comparison?

What is happening here happens in many industries. And thus the Internet moves into the real world. If one is selling consumer goods to retailers right now, you are complaining about Wal-Mart. In every industry’s history there is this huge monster which develops that everyone has to deal with because it brings great efficiencies and lower margins due to scale. And, they also offer much lower return per unit and little or no flexibility
Google’s business model is straightforward – attract as many users as possible to its site by providing what it considers to be “free” content, then monetize that content by selling ads. Google has “a hell of a business model – they’re going to take everything you create, for free, and sell advertising around it.

So if this deal goes through & Google does indeed handle more than 80% of the ads served up after the acquisition, it seems more and more like a monopoly. Give away what others charge for to get them locked in to using your products. Analytics, free, optimizer, free, doubleclick PPC management, free?, doubleclick ad serving, free?
It is also the same strategy Microsoft used to get everyone to use their products and put people out of business. But Google is a natural monopoly in online advertising industry. This is very much a monopolistic play. Microsoft may be the pot calling the kettle

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