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The list of rumored suitors for banner ad server DoubleClick has grown beyond Microsoft according to a report at MarketWatch:
Google Inc. has emerged with Microsoft Corp. as a contender to buy online advertising company DoubleClick Inc., according to a media report Monday.
The competition between Google and Microsoft is likely to drive up DoubleClick’s price beyond $2 billion, The Wall Street Journal reported in ins online edition, citing unnamed people familiar with the situation. See Wall Street Journal story (subscription required).
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Yahoo Inc. and Time Warner Inc.’s AOL online unit also have talked to DoubleClick which is majority-owned by San Francisco private-equity firm Hellman & Friedman though it is unclear whether AOL is still in the race, The Journal said.
I’m still puzzled as to what these folks see in DoubleClick, particularly at the premium prices being bandied about.
The Wall Street Journal reports that privately held DoubleClick is being shopped around and that active discussions are taking place with Microsoft. Heck, why not? Microsoft seems enamored of the more antique ways to sell Web advertising, so why not collect one of the dotcom era banner ad high flyers now sadly reduced in stature?
Snarking aside, it’s not really clear why Microsoft needs DoubleClick since flogging banner ads seems to already be their core Web advertising competence. Moreover, Microsoft loves touting the quality viewers at MSN websites while DoubleClick places ads with a number of publishers including AOL. Add to this the rumored financials and it doesn’t seem like much of a deal.
I suppose it is also worth noting that the folks at Google apparently like antiques too as Miguel Helft reports in a NY Time’s survey of Google’s fledgling radio and TV ad efforts. Yes, there’s still money on the old media table, but it’s less important every year as illustrated from today’s BBC report that in 2006 for the first time, Internet ad sales passed newspaper ad sales in the UK and are gaining rapidly on the TV market.
News Corporation and NBC Universal will launch the largest Internet video distribution network ever assembled with the most sought-after content from television and film, it was announced today by Jeff Zucker, President and Chief Executive Officer, NBC Universal and Peter Chernin, President and Chief Operating Officer, News Corporation. The video-rich site will debut this summer with thousands of hours of full-length programming, movies and clips, representing premium content from at least a dozen networks and two major film studios.
AOL, MSN, MySpace and Yahoo! will be the new site’s initial distribution partners. Their users, who represent 96 percent of the monthly U.S. unique users on the Internet, will have unlimited access to the site’s vast library of content. This media alliance will offer consumers free long- and short-form video and create a compelling platform for advertisers, targeting the rapidly growing audience of online video consumers. Charter advertisers include Cadbury Schweppes, Cisco, Esurance, Intel and General Motors.
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At launch, full episodes and clips from current hit shows, including Heroes, 24, House, My Name Is Earl, Saturday Night Live, Friday Night Lights, The Riches, 30 Rock, The Simpsons, The Tonight Show, Prison Break, Are You Smarter than a 5th Grader and Top Chef, plus hits from the studios’ vast television libraries, will be available free, on an ad-supported basis, within a rich consumer experience featuring personalized video playlists, mashups, online communities and video search. Plus, the extensive programming lineup will include fan favorite films like Borat, Little Miss Sunshine, Devil Wears Prada, The Bourne Identity and Bourne Supremacy with bonus materials and movie trailers. Post-launch, plans will be considered for acquiring additional content as well as producing and licensing original programming for the new site’s audience.Its launch distribution partners will provide the biggest potential reach of any player on the Internet. Moreover, the new site will actively seek agreements with a variety of additional distribution partners.
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“This partnership is completely aligned with our continued investment in video on MSN and will allow hundreds of millions of our consumers to tune into a vast library of high-quality, safe and legal online video,” said Kevin Johnson, President, Platform and Services Division, Microsoft. “Our alliance proves that you can deliver quality online video entertainment and protect intellectual property and copyright at the same time. We look forward to working together to explore additional opportunities to distribute this content across other Microsoft services and devices.”
YouTube isn’t mentioned by name in the press release, but you don’t need a weatherman to know which way the wind blows.
Aside from the fact that it seems more about distribution than about network, the real question is how much YouTube will be hurt by the loss of commercial video in the face of its continued dominance in displaying the amateur variety. Of course, YouTube would be invited to join the network in less than a New York minute if they agreed to the media companies’ revenue sharing terms.
Update: Kevin Johnson’s formal statement is here. Best line:
Today’s announcement is a great win for MSN’s more than 460 million consumers and for online video more broadly.
Golly, such a deal!
Comcast is not unexpectedly looking for the best price on the eyeballs of its cable ISP customers:
Microsoft Corp., Google Inc., Yahoo Inc. and Time Warner Inc.’s AOL are bidding to provide search technology and manage online advertising for Comcast Corp.’s Web site, a source familiar with the matter said on Monday.
Comcast.net, which received almost 17 million unique visitors in February, currently uses Google’s search engine service, but the three-year contract expires at the end of 2007. The site has only experimented with advertising in the past.
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The site is among Google’s biggest individual sources of search queries, from which it generates search advertising revenue. Google is expected to pay Comcast around $70 million this year under its existing contract, although that could top $100 million, the source said.
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Comcast will expect whoever wins its advertising contract to be able to handle its growing online video advertising inventory, including The Fan, which is its collection of entertainment clips. It has also launched new video sites, including Ziddio, which allows users to upload their own videos and Fearnet, a horror TV channel and video Web site.
I’ve seen this billed in some accounts as a rebuff to Google, but it’s rather a simple business decision to try to get the best price. Wouldn’t you?
