European antitrust legislators have cleared Google’s acquisition of DoubleClick on 11th March 2008. The online ad serving and management technology provider will now officially become part of the Google empire for the price of $3.1 billion in cash.
The deal was cleared after almost one year of negotiations. Google shares rose by 6 percent or $26 on the day, stopping a continued slide that would have landed the stock at below $400 had it not been for the announcement from the EU.
Layoffs at DoubleClick in the U.S. and elsewhere are very likely after a process of job matching. The reductions will initially be carried out in the U.S. by April and elsewhere thereafter. According to CEO Eric Schmidt, “As with most mergers, there may be reductions in headcount. We expect these to take place in the U.S. and possibly in other regions as well.”
Performics, the search engine marketing part of DoubleClick should be spun off, since owning a search engine optimisation agency would present a direct conflict of interest. However, Google refuses to confirm that this will happen, especially since the EU legislators have not placed any conditions on the merger.
Sales and account management functions are likely to face the most reduction in workforce when the two companies align forces.
Google will now have access to one of the leading display advertising platforms. In additiona to the obvious use of Doubleclick’s inventory to offer even more ad space to Google AdWords advertisers, they will also use DoubleClick’s technology to improve effectiveness and measurement of performance of digital media for advertisers and publishers.
Engineers at Google report that some DoubleClick tags will also soon be allowed in Google AdWords, enabling better performance tracking for advertisers already using the platform for display advertising.
Announcements about the Google – DoubleClick merger nicely match the timing of the launch of Google’s Ad Manager tool, which according to Google Senior Project Manager Rohit Dhawan is “a free, hosted ad and inventory management tool that can help publishers sell, schedule, deliver and measure their directly-sold and network-based ad inventory.”