Doubleclick and Google: What will historians say?

My opinion is that the DCLK / GOOG deal is way too hyped. I feel like the press and the financial analysts love it and it gets me thinking that they know something I don't or, we're in the middle of a Google Bubble - all love, no reality. Or maybe it isn't so black and white. Only time will tell. Here are some of my thoughts:

• $3.1B CASH. Yes, CASH! Google can definitely afford it. Google has (had) $11B cash reserves. They make >$3B profit per year (on >$10B revenue). But why CASH? I know private equity wanted it, but come on. A week ago DCLK was worth $2B at 50/50 cash/stock split. Now $3B cash? Which leads me to think...


• I guess we now have dollar value for how much money FU money really is, because if this was just about trying to outmaneuver Microsoft, then, well, seems like it would be a big FU


• Doubleclick's flagship product is DART with three offerings - DART for Publishers (DFP), DART for Advertisers (DFA), and DART Search. DFP has clear synergies with Google Adsense as it is one of the strongest adserving platforms available.


• With revenues of only $100M to $150M, the valuation was 20x to 30x - is that worth payings $3.1B for something Google seemingly already had (Adsense). Or could they not build it themselves? Seems odd that resource-strapped companies like Mediaplex, ZEDO, etc. can build it, but Google can't. What about the great engineers at Google?


• Is this Google's entree into the "display ad market"? Not really. Remember "Image ads"? It has been on the market for 3 years now. Besides Google is at essence a rep firm selling inventory (and providing tools to automate the process) whereas DFP is not a rep firm; they just provide the tools. So, yes, Google gets a toolset, but no, they do not get the luncrative ad inventory with the deal. Publishers still want to sell their inventory with their salesforce.


• Will clients of Performics be happy about the deal or will they feel like the fox (Google) is in the henhouse (3rd party unbiased agency)?


• What about DFA? Google traditionally buys products, then strips them down to distribute them for free to the masses. (Urchin -> Google Analytics, Writely - Google Docs, etc.) But DFA is a premium, upmarket product. Wonder how that changes over time. Will they integrate it with Google Analytics -that would be pretty cool, but again, Google Analytics is more of an entry level product, not an upmarket product


• Is this Googlezon coming to life?

The big X Factor is if Google can convince existing DFP customers to not only continue using DFP, but that Google can give them more $$$ via letting Google sell their ads than if they were to sell with their direct salesfoce. This would be akin to the Myspace deal. More likely in the short term is a middle of the road solution where Google will say, "let your salesforce continue selling the ads and when there is unsold inventory, let us backfill it."

The big implication in that scenario is that remnant deals go away forever. That would be bad news for buyers because that is typically where you find efficiencies with DR campaigns - cheap rates from unsold inventory.

If this happens, then the world of advertising is truly changed, Google wins, publishers win, buyers lose.

Interestingly, Google started as a consumer revolution. Funny how they don't fit as much into the picture anymore...

READ THIS: If you were lied to about Iraq

If you believe you were lied to about Iraq by the President and his men you should hold accountable those who lied AND those who were duped. And by 'hold accountable', I mean never vote for them again and organize against them to Throw Them All Out in the 2008 election.

Do you really want a president, senator or representative who either a. lies to do their own bidding, or b. is duped thorough their own poor due dilligence? So again, if you believe you were lied to, then any yes vote on Iraq in 2002 was either a vote to deceive you or a vote of ignorance - either way a president not make.

"Throughout her weekend campaign visit here, Clinton stuck to her guns: She said she voted to give Bush authority to send weapons inspectors to Iraq, and that her vote was not an endorsement of pre-emptive war. She also said she would never have sought to invade Iraq if she had been president in 2002." - MSNBC 2/12/07

Sentaor Clinton is either blatanly rewriting history or shows a complete lack of knowledge of what she voted for. Here is the full text of HJ Res 114 to Authorize Use of United States Armed Forces Against Iraq (by the way, the very title of the bill contradicts Senator Clinton's assertion)

John Edwards on CNN in 2002: "But I do think that the more serious question going forward is, what are we going to do? ...I think Iraq is the most serious and imminent threat to our country... I think Iraq and Saddam Hussein present the most serious and most imminent threat."

On the other hand in 2007, "Democrat John Edwards said Tuesday that honesty and openness were essential qualities for a president, and that he was proud to acknowledge his 2002 vote authorizing the invasion of Iraq was a mistake." - MSNBC 2/28/07

Why did he and others make such a mistake? We elect representatives to represent our best interests with the goverment not fool around and just raise up their hands and say "sorry, my mistake". There is way too much on the line to take such a lax view. While Senator Edwards is careful to not say he was duped, he offers no explanation for why it was a mistake.

John McCain noted a few years ago...“We’re not going to get into house-to-house fighting in Baghdad. We may have to take out buildings, but we’re not going to have a bloodletting of trading American bodies for Iraqi bodies.” [CNN, 9/29/02] “But the point is that, one, we will win this conflict. We will win it easily.” [MSNBC, 1/22/03]

Here is recorded vote for HJ Res 114 for presidential candidates and other notables.

All but 1 Senator and 6 Representatives in the Republican party voted Yes for the bill.

• Sam Brownback - Yes
• Lincoln Chafee - No (was not re-elected in 2006)
• Newt Gingrich - Not in office
• Rudy Giuliani - Not in office
• Chuck Hagel - Yes
• Mike Huckabee - Governor
• John McCain - Yes
• Mitt Romney - Governor
• Update: Ron Paul - NO
  

The Majority of Democrats voted no on the bill. 29 Senators and 81 Representatives voted yes.

• Joseph Biden - Yes
• Barbara Boxer - No
• Hillary Clinton - Yes
• Chris Dodd - Yes
• John Edwards - Yes
• Dianne Feinstein - Yes
• Al Gore - Did not vote
• Dennis Kucinich - No
• Barack Obama - Not in National office
• Nancy Pelosi - No
• Bill Richardson - Governor

Relevant section from HJ Res 114:

SEC. 3. AUTHORIZATION FOR USE OF UNITED STATES ARMED FORCES.

(a) AUTHORIZATION- The President is authorized to use the Armed Forces of
the United States as he determines to be necessary and appropriate in order
to--

(1) defend the national security of the United States against the
continuing threat posed by Iraq; and

(2) enforce all relevant United Nations
Security Council resolutions regarding Iraq.