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Google remains net icon at great cost

Google remains net icon at great cost
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First Published: Tue, Apr 17 2007. 04 55 AM IST
Updated: Tue, Apr 17 2007. 04 55 AM IST
In forking over $3.1 billion (Rs13,020 crore) for DoubleClick late on Friday, Google proves anew that it will pay any price to block Microsoft from getting traction on the web.
It’s not that buying DoubleClick makes no sense. Both peddle online advertising and they even share a Manhattan office building. But Google most likely paid more than 60 times the earnings for DoubleClick. Of course, against Google’s $1.6 billion acquisition of YouTube last year, that may look downright cheap.
After all, YouTube had no profits. Still, its stock price went up smartly when that deal was announced. Investors may accord a similar response to the DoubleClick transaction on Monday. Microsoft wanted DoubleClick badly. It had the appetite to meet, and even beat, the rumoured minimum asking price of $2 billion set by Hellman & Friedman, the firm’s private-equity owner. That Google won the auction with a price so much higher illustrates the lengths to which it is willing to go to spoil its arch rival’s designs.
This isn’t the first time, of course, that Google has pulled this off. Microsoft tried to buy AOL in December 2005, only to be trumped by Google at the eleventh hour.
It paid AOL parent Time Warner $1 billion for a 5% slice and threw in a mighty sweet advertisement deal, too.
IBM defined the mainframe era, and Microsoft defined the personal computer era. Google’s continuing ability to nab strategic assets like DoubleClick, both by paying up and wooing their founders with its entrepreneurial culture, reaffirms its mantle as the defining company of the Internet era.
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First Published: Tue, Apr 17 2007. 04 55 AM IST
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