Four Reasons MSN Should Buy DoubleClick
|
Written By Stephanie Sun | April 3, 2007 | Share This
|
|
We heard last week that MSN is in negotiations to purchase DoubleClick for a reported $2 billion dollars. Yesterday, the WSJ announced that Google has also placed a bid on the online ad-server, and that Microsoft is unlikely to counter.
This isn’t just a David and Goliath fight, however, a DoubleClick acquisition by either search engine would have major implications for the industry. DoubleClick will become the first ad server owned by a major search engine, and thus would create a huge competitive advantage for either party. Given Google’s current dominance over search, however, it seems like Microsoft has more to lose from a forfeit - and therefore more reason to keep fighting. We know it’s not a question of money - so why would Microsoft back off?
Perhaps because they seem the underdog, and perhaps because Google is already scarily big, I’ve joined MSN’s cheering section in the race for DoubleClick. My reasons are as follows:
- Superior Technology
Microsoft’s Adcenter has a slew of issues, including difficult navigation and unintuitive reporting. One of DoubleClick’s greatest strengths is that its UI is easy to work with. DoubleClick’s reporting interface allows users to seamlessly customize reports, while even the least experienced trafficker can figure out how to upload banners and create tracking tags. MSN is badly in need of a makeover from the DoubleClick team, not just for the sanity of search advertisers, but to put it’s ad platform technologically on par with Google AdWords. Especially given Yahoo’s recent upgrade to Panama, if MSN doesn’t update, it will fall further behind.
- Wealth of Information
DoubleClick has over 1,500 clients worldwide on both the publishing and the advertising side. Serving over 1 trillion ads annually in search, display advertising and rich media, the amount of performance data that DoubleClick brings in is astronomical. A DoubleClick acquisition would give MSN access to performance reports for publishers (including competitors like AOL), potential advertising clients, and internet users. Such a wealth of information would give Microsoft desperately needed insight on the competitive landscape of search and display advertising, to help them develop a more competitive product.
- Leverage the Curve Ball
With better technology and access to competitive information, Microsoft would force everyone else to scramble for alternate solutions. The time and manpower required for AOL and other Microsoft competitors to switch ad-servers would wreak temporary havoc, during which time MSN could play much-needed catchup against Google and Yahoo. Some critics even speculate that MSN is interested in DoubleClick as a strategic maneuver towards a future merger with Yahoo. As such, MSN could finally provide a proper back-end support platform for Yahoo’s mass of traffic, and throw a serious curve ball at Google. - More to Lose from Google’s Gain?
As compelling a competitive force such a merger would create, I’m inclined to think its unlikely that Microsoft would buy Yahoo. Nevertheless, it underscores that there’s more to the DoubleClick acquisition than mere technological savvy. The threat of Google winning such a data goldmine is perhaps greater than the value of DoubleClick’s assets. As Google moves further into new types of media, it’s advertising empire is quickly pushing MSN out of search. Because a DoubleClick acquisition would only increase Google’s lead on the struggling competition, Microsoft has far more to lose from Google’s gain of DoubleClick than vice versa. For that reason alone, Microsoft should reconsider DoubleClick’s going price and counter Google’s offer.
Topics: Advertising: Online, Google, Investment, M&A, Microsoft, Web Analytics |
Lose Gain
Give Up Beer and Lose It, Why People Demand It, Revised Edition: Books: James M. Kouzes,