Does the rumored DoubleClick deal make sense for Microsoft?

Microsoft Corp. is rumored to be a potential bidder for online advertising services giant DoubleClick. But the media speculation has people in the industry wondering whether the potential conflicts of interest put the success of the combination or the rationale for a deal at risk.

New York-based DoubleClick was bought almost two years ago for $1.1 billion by Hellman & Friedman. And now the San Francisco-based private equity group wants to cash out. But don’t expect confirmation yet.

“DoubleClick does not comment on speculation or rumors,” said Lynn Tornabene, a DoubleClick spokeswoman.

Donovan Data Systems, New York, is also rumored to be a potential bidder for DoubleClick. Donovan is a systems and software provider to the advertising industry.

DoubleClick is one of the largest ad networks in the United States. It also has offices in Europe and Asia-Pacific. It offers services such as ad serving, ad management, behavioral targeting and online video and rich media technology. Performics, the performance-based marketing division of DoubleClick, provides online marketing services for multichannel marketers.

DoubleClick may want to keep its plans quiet, but that has not stopped industry chatter.

“The proposed acquisition of DoubleClick by a giant like Microsoft is definitely an interesting idea,” said Mike Walrath, CEO of Right Media, New York. “As more companies move toward offering ad management and ad serving capabilities bundled into other services, it could put pressure on DoubleClick’s core ad management business.

“At the same time, Microsoft needs to be able to keep up with market demand for ad-serving as a bundled or value-add service,” he said. “For these reasons, the deal makes sense.”

Mr. Walrath also wondered whether DoubleClick’s installed customer base trusts a major player, such as Microsoft, to handle their ad management infrastructure.

Other companies are already offering services similar to DoubleClick’s as value-add. Right Media, for example, provides ad serving and ad management as value-add services, specifically for its advertising exchange members.

“The deal would accelerate Microsoft’s ability to provide these services like the other major players like Google, Yahoo [and] AOL,” Walrath said.

Kevin Lee, founder and executive chairman of Did-it , a New York search-marketing firm, was not as sure about the rumored deal’s benefits.

“This deal could be an extreme risk to DoubleClick’s business,” Mr. Lee said. “There is a conflict of interest with regards to DoubleClick’s Performics division, which competes directly with other agencies that Microsoft sells ad space to. However, it is quite possible that the benefits outweigh the risk factor.”

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