- The Washington Times - Wednesday, March 12, 2008

SAN FRANCISCO (AP) — Google Inc.’s long-anticipated acquisition of online ad service DoubleClick Inc. is expected to turn the Internet search leader into an even more powerful marketing vehicle assisted by better insights about consumers.

The $3.1 billion deal, completed yesterday after nearly a year of regulatory wrangling, also may intensify pressure on Microsoft Corp. and Yahoo Inc. to resolve their stormy courtship so they don’t risk further distractions while Google tries to sprint further ahead in the race for Internet advertising.

Google took control of DoubleClick a few hours after Europe’s antitrust regulators removed the final stumbling block by approving a deal that was first announced 11 months ago.

U.S. regulators cleared the transaction in December, casting aside objections from Microsoft and other companies that argued DoubleClick would give Google too much control over online advertising and potentially sensitive information about consumer behavior on the Internet.

Besides procuring new opportunities, Google’s takeover of DoubleClick will create more challenges for a management team already grappling with concerns about how the slowing U.S. economy will affect the company’s earnings growth this year.

Google Chairman Eric Schmidt acknowledged in a statement that the biggest acquisition in the company’s 9½-year history probably will trigger an unspecified number of layoffs after years of relentless hiring. The looming job cuts will be concentrated in the United States, though Mr. Schmidt said offices in other countries could be affected.

New York-based DoubleClick has 1,500 employees with offices in France, England, Germany, Ireland, Spain, Australia and Spain. Mountain View, Calif.-based Google employs nearly 17,000 workers, up from 1,600 just four years ago.

Google’s recently slumping shares soared with the rest of the stock market yesterday, gaining $26.22, or 6.3 percent, to $439.84. The company’s stock price remains down by 36 percent so far this year.

DoubleClick is likely to broaden Google’s extensive reach in the $40 billion Internet advertising market.

Google has been the market’s most dominant player so far, generating more than $16 billion in revenue last year. Most of the money flowed in from short, written ads that Google places alongside search results and other Web content.

DoubleClick specializes in placing more dynamic, multimedia ads, a form of marketing that is expected to become more important in the next few years as big companies spend more money promoting brands online.

With between $300 million and $400 million in annual revenue, DoubleClick isn’t expected to have a significant impact on Google’s profit this year.

Microsoft offered to buy Yahoo for $40 billion, but Yahoo rejected the unsolicited bid.

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