In a bid to dominate the online display advertising business, Google has announced a definitive agreement to acquire DoubleClick, a digital marketing technology and services firm, for $3.1 billion in cash.

The move will give Google a leg up in chasing the growing multi-billion dollar online display ad market, as the acquisition will give the company immediate access to DoubleClick’s online display advertising network.

“Google really wants to get into the display advertising business in a big way, and they don’t have the relationships they need to make it happen,” said Dave Morgan, the chairman of Tacoda, an online advertising network.

“But DoubleClick does. It gives them immediate access to those relationships.”

“DoubleClick’s technology is widely adopted by leading advertisers, publishers and agencies, and the combination of the two companies will accelerate the adoption of Google’s innovative advances in display advertising,” Google CEO Eric Schmidt said.

Officials of the both companies released the following statements:

“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,“ said Sergey Brin, Google’s Co-Founder and President, Technology.

“Google is the absolute perfect partner for us,“ said David Rosenblatt, Chief Executive Officer of DoubleClick.

“Combining DoubleClick’s cutting edge digital solutions for both media buyers and sellers with Google’s scale and innovative resources will bring tremendous value to both our employees and clients.“

Yahoo, meanwhile, has long been the leader in online display advertising, and the introduction of its Panama search platform was widely seen as a way for it to compete against Google. With this move, Google will be more actively in competition with Yahoo for corporate video advertising.

Microsoft, in the mean time, has been struggling to catch up with Google and Yahoo in the online advertising business, and was reportedly in talks with DoubleClick last month about a possible acquisition. The news gave Google a wake-up call by showing that its arch-rival was also interested in DoubleClick.

“The acquisition was, in part, a defensive move, a way to keep Microsoft from gaining a larger foothold in the online ad market,” Trip Chowdhry, an analyst with Global Equities Research said.

“Keeping Microsoft away from DoubleClick is worth billions to Google,” according to RBC Capital Markets analyst Jordan Rohan.

Related:

Entry was posted on Saturday, April 14th, 2007 at 3:39 am under Google, Microsoft, Technology.

Read more entries by Ruben Francia.
Stumble It!