Buyout of DoubleClick and The User Experience
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by Amanda Watlington, Ph.D., A.P.R.
Is Google too powerful? Perhaps to those who want a competitive arena filled with similar-size adversaries, Google is too powerful. For those who are concerned about the consolidation of competitors in the online advertising space Google’s purchase of DoubleClick is an alarming action that should be stopped. For others who consider large and powerful companies as helpful to the overall economic health of the nation, Google’s growth is a good thing. The real question to me is not one of size or consolidation but rather how a company uses its size and power.
To date Google has chased the almighty dollar using the consumer’s growing reliance on the Internet as an economic springboard. Google has been richly rewarded for its efforts. The company has used its riches to purchase a wide range of other companies – making two multi-billion dollar acquisitions in less than a year in YouTube and now DoubleClick. These two acquisitions have gotten a lot of press, and business leaders have their eyes on how will Google make these huge purchases yield their economic promise. How long can a company keep a multi-billion asset underperforming? No one would argue that to date YouTube has garnered a lot of traffic and press but the economic rewards have been thin gruel at best. To this observer, this points to issues of integration of the asset into the portfolio, and integration is the Achilles heel for many companies that have used acquisition as a growth strategy.
Along with the high-profile acquisitions of YouTube and DoubleClick, Google has also purchased a number of smaller companies, and observers should note Google’s success or failure in integrating these acquisitions. Buried in the news of the DoubleClick acquisition is notice that the founders of Dodgeball, a May 2005 Google purchase, have left the company. Admittedly Dodgeball failed to gain traction or support in the fast-growing market for SMS applications, but to this observer it was not well integrated into the Google landscape of applications. The founders of Dodgeball follow the founders of dMarc, the radio ads company bought by Google in 2006, out the door. The founders of YouTube in February registered to sell $362 million in Google stock they received from the sale of YouTube.
To some this is hint at a potential defection. Although the founders of many companies do not linger long after their acquisition, for fast-growing technology companies, the rapid exodus of the founders can leave gaps in leadership and vision. It remains to be seen how well Google can integrate its acquisitions and make them fulfill their economic promise.
In the official press release on the DoubleClick acquisition, Sergey Brin, Google’s Co-Founder and President, Technology, said “It has been our vision to make Internet advertising better - less intrusive, more effective, and more useful. Together with DoubleClick, Google will make the Internet more efficient for end users, advertisers, and publishers.”
If this promise is fulfilled the acquisition will improve the user’s experience, but this is a tall promise. There is a lot of integration and adjustment that must be made before this promise if fulfilled. Google has to show us whether it is too powerful or just using its riches to make big purchases.
Amanda Watlington, Ph.D., A.P.R., is owner of Searching for Profit, a Boston-based search marketing consultancy, and author of the book, Business Blogs: A Practical Guide.
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