Musings on the Google + Doubleclick Deal

By now you're well aware of Google's acquisition of DoubleClick for $3.1billion.  Few things get the blogosphere buzzing like a juicy Google story, and this one was no exception.  With Techmeme being taken over by this deal, there isn't much new I can add to the conversation for now. Instead, let me highlight some of the coverage I found most interesting:

• Fred Wilson on banners being the new black
• Brad on the 10x return on equity Hellman and Friedman generated in two years time
• Matt Ingram on the irony of Microsoft's antitrust claims
• Paul Kedrosky on why focusing on valuation is pointless in this deal
• Eric Savitz on the sell-side reaction to the deal
• Phil Wainewright on the difficulties of serving two masters [publishers and advertisers]
• Larry Dignan on why Yahoo! comes away looking good from this deal
• HipMojo with a contrarian take on why this deal makes little sense
• Will Hsu on Google-DoubleClick coming full circle

So where do I stand on the deal?

1) The big winners here are clearly Hellman and Friedman. They made a smart, ballsy call that was met with a LOT of cynicism at the time; and came out with enormous returns for themselves and their LPs
2) This wasn't a defensive move on Google's part, it was an offensive one
3) Regardless of whether the purchase price was egregious, I don't want to hear that Microsoft is better off for having not made the deal. There was a time, not so long ago, when Microsoft wouldn't have been outbid for a strategic asset. The fact Microsoft was in the bidding, and by most accounts initiated the talks, speaks volumes
4) The inevitable "myth of cascading M&A" was in full effect today, with 24/7 Media (TFSM) and Aquantive (AQNT) up sharply as traders tried to find the "next" deal in the space. My bet? None of the above

Note: This is not a recommendation to buy or sell GOOG or any other security, but is merely a personal analysis to foster discussion for informational purposes only. At the time of this writing, I and/or funds I maintain discretionary control over, maintained a long equity position in MSFT and YHOO but did not maintain a position (long or short) in AQNT, GOOG or TFSM . We also may, at times, carry derivative options on underlying positions as a hedge.

google doubleclick advertising m&a hellman and friedman investing woodrow enterprise+irregulars

Comments

[Dennis Howlett]

Scoble's thoughts were interesting on this when he said something like 'monetizing (apparently) small ideas isn't so attractive to Microsoft.' But of course hindsight is a wonderful thing.