googdoub.gifGoogle has agreed to buy DoubleClick, a company that sells display advertising on Websites, for $3.1 billion in cash.

Google’s growth story continues. This extends Google’s reach to banner and other online ads, where Google has so far been weak.

DoubleClick’s software is used by large publishers to manage advertising, and it gives Google a direct channel to these publishers and to advertising agencies that buy ads through DoubleClick. It puts Google on a more even footing with Yahoo in display ads, and it is a blow to Microsoft, which reportedly had been negotiating to buy DoubleClick.

The deal is a huge win for DoubleClick-owner Hellman & Friedman, the private equity firm that bought DoubleClick for $1.1 billion in 2005. Google has paid a premium and its stock was hit, predictably, in after-hours trading Friday. What do you think? will Google’s stock resume its fall Monday, or will Google’s journey excite investors and prop it back up?

http://wp.vizu.com/vizu_poll.swf

From the Mercury News story:

Based in New York City, in the same building where Google has an office, DoubleClick has more than 1,500 customers. Its top competitors are aQuantive and 24/7 Real Media…

..Before the deal was announced, Google had been rumored to be developing a free ad-serving tool that it had hoped would compete with the product that was DoubleClick’s bread and butter…In a conference call with analysts and reporters, Schmidt said Google decided to make a bid for DoubleClick after a strategic review revealed that the opportunity to sell display advertising was larger than Google’s executives previously had imagined, and that DoubleClick had done an exceptional job at entering the market.

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