Google (GOOG) just picked up another promising startup in its effort to gain some ground in the online visual advertising market. Teracent, which was formed three years ago, is becoming part of the search engine giant.

Yahoo! (YHOO) currently leads the market in display advertising sales, and Google has been trying push into the space. Last year, this led to its acquisition of online ad service DoubleClick, but that was a first step rather than a total solution to Google's display ad ambitions.

Continue reading Teracent: Display ad biz joins the Google family

Teracent: Display ad biz joins the Google family originally appeared on BloggingStocks on Tue, 24 Nov 2009 12:20:00 EST. Please see our terms for use of feeds.

Google to fire 300 at DoubleClick originally appeared on BloggingStocks on Thu, 03 Apr 2008 15:56:00 EST. Please see our terms for use of feeds.

The collapse of Google's (NASDAQ:GOOG) stock is the talk of internet investors. Wall Street is concerned that the number of people clicking on the search engine's ads is falling, perhaps due to the tough economy.

Google now has clearance to buy DoubleClick, which will get it into the huge display advertising market, but that segment of internet market is not growing very fast.

Google has one more card up its sleeve. The new program, called Ad Manager, will allow Google publishing partners to get potential revenue for ad space they have not been able to sell themselves. According to The Wall Street Journal, "Google is hoping that Ad Manager users will agree to carry some ads Google sells in ad spots on their Web sites they haven't filled themselves."

The display ad program is unlikely to yield much revenue for publishers or Google. The unsold display inventory on most sites is sold at extremely low rates. Most publishers sell their best spots to marketers who will pay a premium. Less desirable ad positions normally have very little value to advertisers because they run in places where users often don't see them.

Otherwise, it's a great idea.

Douglas A. McIntyre is an editor at 247wallst.com.

To get back on top, Google (GOOG) creates new ad program originally appeared on BloggingStocks on Thu, 13 Mar 2008 09:30:00 EST. Please see our terms for use of feeds.

There is no disagreement, though, over the potential for Google's acquisition of DoubleClick to have a significant impact on the company and on the online ad industry. Google has been working with both the U.S. and EU's antitrust departments to OK the merger. We got the go-ahead in the US in December and today, the EU OK'ed the deal as well.

In allowing the merger to go through, the EU concluded that Google could not successfully employ anti-competitive practices with the presence of viable ad serving competitors, like Microsoft (NASDAQ: MSFT) and Yahoo (NASDAQ: YHOO).

Continue reading EU clears Google-DoubleClick merger

EU clears Google-DoubleClick merger originally appeared on BloggingStocks on Tue, 11 Mar 2008 15:55:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• General Motors Corporation (NYSE: GM) is expected to announce as soon as today that it is selling its medium-duty truck unit to Navistar International Corporation (OTC: NAVZ), reported the Wall Street Journal.
• Its balance sheet is clean and straight forward, debt is less than 25% of capital, it produces over $70M a year in operating cash, pays a 3.5% dividend and buys back its stock, but, asks the Wall Street Journal's "Smartmoney Stock Screen" about Journal Communications Inc (NYSE: JRN), is this stock a bargain or perhaps a takeover candidate?

• According to two people familiar with the matter, the FTC is expected to approve the proposed $3.1B acquisition of DoubleClick by Google Inc (NASDAQ: GOOG), the Washington Post reported.

• According to an inside source, Earthlink Inc (NASDAQ: ELNK) executives, including an executive VP and a VP, have left the company over the last week, DSLreports.com noted. The company is also cutting VOIP and Muni-Wifi services, in addition to the previously announced job cuts.

Newspaper wrap-up: FTC expected to approve Google-DoubleClick deal originally appeared on BloggingStocks on Thu, 20 Dec 2007 08:30:00 EST. Please see our terms for use of feeds.

Shares sold short in Microsoft (NASDAQ: MSFT) fell 14.1 million shares in September to 83 million. It seems that the shorts knew enough to get out ahead of good news.

So far this year, Microsoft's stock has been flat, but over the last three days it has moved up more than 3% on news that it had released its Halo 3 video game and that it is in talks to buy part of social network Facebook.

The enthusiasm about Halo may be well-placed. In the company's last fiscal year, its devices business lost $1.9 billion on $6.1 billion in revenue. The previous year was not any better. The world's largest software company needs a catalyst to drive sales of its Xbox 360, and Halo 3 may well do that.

The Facebook deal has also drawn a great deal of attention. Rival Google (NASDAQ: GOOG) is building a large advertising platform using its own search inventory combined with impressions that it gets from its AdSense network. To expand that business, it is buying DoubleClick and has a deal to sell ads on social network leader MySpace. AOL is making moves in the same business. It owns Advertising.com, the largest ad network, and has just bought behavior targeting company Tacoda.

That leaves Microsoft sitting well behind its rivals. A deal with Facebook could help expand a network around its portal, MSN. Online services lost $732 million last year.

It may be that the company is facing up to its online and devices problems. That could be good news.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Short interest in Microsoft (MSFT) falls ahead of Halo 3 release originally appeared on BloggingStocks on Wed, 26 Sep 2007 09:56:00 EST. Please see our terms for use of feeds.

The Wall Street Journal [subscription required] reports that Microsoft Corp. (NASDAQ: MSFT), hoping to bolster its legal challenge, is now paying a PR firm to drum up public opposition to Google Inc.'s (NASDAQ: GOOG) $3.1 billion deal to acquire online advertising firm, DoubleClick. Microsoft hired PR firm Burson-Marsteller to drum up opposition to Google's DoubleClick deal. In Europe, Burson urged Internet companies to sign an online petition for a more "transparent and competitive Internet," according to the pitches.

Why does Microsoft oppose the deal and why is it hiding behind Burson? Microsoft does not want Google to strengthen its competitive position in the online advertising industry -- and DoubleClick, which serves online display advertisements, would surely help Google expand its online advertising dominance. Microsoft has been hiding behind Burson in Europe because it has just lost a European Court upheld a ruling that found Microsoft had abused its near-monopoly position in PC computer software.

The irony of Microsoft's efforts to block competition through the courts and the media was not lost on the Journal. In the 1990s, Bill Gates enjoyed tweaking competitors which similar tactics by rivals as it cemented its own power in personal-computer software, and those efforts factored into its run-ins with antitrust regulators.

But current Microsoft CEO Steve Ballmer lacks Gates' competitive chops, so he's struggling to use the means of a second rate competitor against the market leader, Google. Those clumsy means will only make Microsoft look bad.

Peter Cohan is president of Peter S. Cohan & Associates,. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Google or Microsoft securities.

Microsoft (MSFT) can't compete with Google (GOOG), resorts to courts and PR originally appeared on BloggingStocks on Mon, 24 Sep 2007 09:35:00 EST. Please see our terms for use of feeds.

Ever so quietly, Microsoft (NASDAQ: MSFT) has retained big PR firm Burson-Marsteller and has been trying to convince internet companies and regulators that the Google (NASDAQ: GOOG) plan to buy DoubleClick will hurt competition. Given Microsoft's past relationship with the government and other software companies, the move has a touch of irony.

According to The Wall Street Journal "the campaign is one piece of a broader effort by Microsoft to rally opposition to the acquisition..." The world's largest software firm has also approached companies including Time Warner (NYSE: TWX) and AT&T (NYSE: T) to enlist support. Burson has contacted several companies without saying that Microsoft is its client in the matter.

The move may show how desperate Microsoft is to keep Doubleclick, a huge force in serving display advertising for thousand of clients onto internet websites, away from Google. The world's No.1 search company could use its targeting software to help place display ads more efficiently. That would give Google a very significant business in the display market to sit along side it dominant position in providing search base text ads.

Microsoft's MSN portal and Live search products have lagged behind Google and Yahoo! (NASDAQ:YHOO) in both search market share and overall internet audience. If Google increases its influence in the internet ad business, Microsoft may have permanently lost its chance to catch up.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Microsoft (MSFT) lobbies to kill Google (GOOG) deal with Doubleclick originally appeared on BloggingStocks on Mon, 24 Sep 2007 04:30:00 EST. Please see our terms for use of feeds.

Google (NASDAQ:GOOG) has been a target for a number of internet privacy groups who feel that it keeps personal data on users for too long. Google argues that having the data helps deliver better search results. Plus, the company decided to cave into pressure and agreed to keep data on individuals no longer than 18 months.

Now, Google want to be out in front of the drive for Internet privacy. It is an unlikely about face, but it is one nonetheless. According to the Financial Times, Google is "calling for new international laws to be set up to protect personal information online." It wants a body like the UN to draw up the rules.

Google's position is clearly one that it would rather not be forced to take, but it is making the best out of a bad situation. Clearly, the more data a search engine has, the better the results. This allows for better text ad targeting and better profits. Now that Google has purchased DoubleClick the use of data collected from users is even more important to get good results for display ads.

But, Google has to protect its image and so instead of just going along, it will lead the parade.

The company may figure that if it take a central position in drafting new rules so that it can at least slant them a bit to its advantage. It is not being helpful for nothing.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Google becomes unlikely advocate for web privacy originally appeared on BloggingStocks on Fri, 14 Sep 2007 13:30:00 EST. Please see our terms for use of feeds.

Time Warner Inc. (NYSE: TWX) has received the required clearance to acquire Tacoda Inc., a company that targets ads based on a web user's browsing habits. There is no issue with this deal clearing. Time Warner could acquire 100 companies like this and the Federal Trade Commission and Department of Justice would rubber stamp every single deal.

It is almost funny that the two recent big media and online buys -- Microsoft Corp. (NASDAQ: MSFT) has bought aQuantive and Google Inc. (NASDAQ: GOOG) has acquired DoubleClick -- are still being reviewed by some. Those purchases cannot be reversed.

Back to Time Warner and AOL: AOL has found itself in a predicament over backing away from prior estimates for "faster than market growth" for its search-related advertising sales. But if you look back at last month's comScore numbers, as we pointed out earlier, you will realize that AOL has a massive reach through its Advertising.com division. Any such deal that can incrementally ad both new advertising groups and that can reach more people will be an opportunity for incredible advertising leverage.

It's hard to cover a company like Time Warner one unit at a time. Many in the media still want to only cover negative aspects of the company, and considering it is a shot at bashing a competitor it is hard to blame them. Just last week, AOL launched Truveo. AOL may be its own entity next year if my thought process is accurate and the clouds drift the way they have historically. This will allow it to keep adding small strategic plays that can help grow both AOL and the other Time Warner brands. That will be a winning recipe for the company, and should be a winning recipe for shareholders.

Jon Ogg is a partner at 24/7 Wall St, LLC. He produces the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.

Time Warner's (TWX) online strength: Keep bolstering AOL's ad portfolio originally appeared on BloggingStocks on Tue, 28 Aug 2007 08:48:00 EST. Please see our terms for use of feeds.

Executives from Google (NASDAQ: GOOG) will be asked to defend their purchase of DoubleClick before Congress. According to The Wall Street Journal, the hearing will center around whether the deal raises issues over consumer privacy and competition for pricing in the market.

The combination of the two companies would put the leader of search advertising together with the leader in online display advertising. At that point Google would have access to information about who, when, and where with regard to a large portion of all marketing across the internet.

The investigation may also be a result of sour grapes on the part of Microsoft (NASDAQ: MSFT) and Yahoo! (NASDAQ: YHOO). They have no doubt written the congressmen about privacy concerns, but the actual reason behind their complaints is that it was Google and not one of them that bought DoubleClick.

It is hard to handicap whether Congressional hearings will hurt Google's chances at completing the deal for DoubleClick.

Congress tends to ask questions about things and then forget about them.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Google goes to Washington originally appeared on BloggingStocks on Thu, 19 Jul 2007 07:41:00 EST. Please see our terms for use of feeds.

Google's (NASDAQ: GOOG) deal to buy DoubleClick seemed certain to get a government review. Google is too dominant in text advertising and DoubeClick too big in display ad serving and targeting. Of course, competitors like Microsoft (NASDAQ: MSFT) said it would put too much online advertising power in one set of hands.

Now the eyes of the Federal Trade Commission have turned on Microsoft and Yahoo! (NASDAQ: YHOO). Their respective deals to buy aQuantive (NASDAQ: AQNT) and Right Media are going to get the antitrust once over, at the very least.

Right now, the FTC's review of the Google deal is more formal [subscription required] than the other two, but that could change. More than one industry association has asked that the government to take a close look at all three transactions.

Although the odds are that none of the M&A activity that is designed to bring advertising targeting under the umbrellas of big web portals will be stopped, perhaps the FTC work will be more than a formality. When these three transactions are added to AOL's ownership of Advertising.com, the concentration of private data about individual's web habits will be in very few corporate hands.

Perhaps there should be a divide between those that have the information and those who have the advertising inventory. But, that would be in a too perfect world.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Microsoft and Yahoo! get FTC review of online ad purchase originally appeared on BloggingStocks on Fri, 15 Jun 2007 09:00:00 EST. Please see our terms for use of feeds.

This morning's Wall Street Journal [subscription required] reports that Providence Equity Partners bought an $830 million stake in a privately-held Internet comparison shopping company. (Click here for my colleague, Tom Taulli's, perspective on this deal.) This could signal a top in the private equity cycle for two reasons:

• Private equity's loosening investment standards. In the past, a consistently profitable Internet company would be best off tapping the public markets in an IPO. NexTag's decision to take private equity instead of the IPO or corporate acquisition -- e.g., getting bought by Microsoft Corp. (NASDAQ: MSFT), Yahoo Inc. (NASDAQ: YHOO), or IAC Interactive Corp. (NASDAQ: IACI) -- markets suggests surprising weakness there, or a private equity market whose lax investment standards make it willing to pay more than public equity investors for NexTag.
• Scrambling out of the comfort zone. Providence Equity has typically made purchases of traditional media companies. Its move into the Internet business could either signal it no longer perceives that traditional media companies are worth taking private, that consumer Internet companies have greater appreciation potential, or that the hidden details of this particular deal were just too good to pass up. But NexTag's market is highly competitive (e.g., there are many competitors such as Lowermybills, Lending Tree, Pricegrabber, Bizrate, Shopzilla, and Bankrate) and these competitors must deal with significant business risks (such as changes in interest rates -- much of NexTag's business is mortgage related -- and disruptive technologies). It is unclear what unique sources of competitive advantage Providence Equity brings to NexTag as it faces these business challenges.

Providence Equity's deal appears to be a rich one. Its 66% stake in NexTag -- which operates sites in the U.S. and U.K. that allow 11 million consumers a month to find the best prices on products and services sold online by Web retailers -- values the San Mateo, CA company at $1.2 billion. NexTag's website claims that it operated profitably in every one of 15 straight quarters through July 2005. But in the absence of specific revenue and profit information it's difficult to know whether Providence Equity's price makes sense.

Continue reading Does NexTag buyout signal a top for private equity?

Does NexTag buyout signal a top for private equity? originally appeared on BloggingStocks on Sat, 09 Jun 2007 13:40:00 EST. Please see our terms for use of feeds.

Almost every privacy advocate in the world has filed complaints with the Federal Trade Commission about Google Inc.'s (NASDAQ: GOOG) purchase of ad-serving company DoubleClick. The list of organizations that want the feds to vote "no" on the deal includes the Electronic Privacy Information Center, the Center for Digital Democracy, and the U.S. Public Interest Research Group, according to MarketWatch.

Concerns about the deal cover a wide range, from the notion that Google would use private data to target ads all the way to the federal government accessing the data to get information on citizens who might be suspect in one way or another.

There is something to be said for the worries, and the rejection of the deal would cause great rejoicing at Google competitors Microsoft Corp. (NASDAQ: MSFT) and Yahoo! Inc. (NASDAQ: YHOO). While Google is unlikely to run the risk of misusing the data and alienating its customer base, the idea that the government might access the data is not altogether crazy. Between trying to get reporters to give out sources and wire tapping, the US government has often not acted in a way that would make the privacy police sleep better.

And so Google's purchase of DoubleClick takes on some irony. The government will ultimately decide whether the deal goes through and the government may be the most likely entity to abuse the requirement to keep data private.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The privacy police come after Google originally appeared on BloggingStocks on Thu, 07 Jun 2007 13:18:00 EST. Please see our terms for use of feeds.

Continue reading What do Whole Foods, Sirius and Borders have in common?

What do Whole Foods, Sirius and Borders have in common? originally appeared on BloggingStocks on Wed, 06 Jun 2007 11:23:00 EST. Please see our terms for use of feeds.

Google Inc. (NASDAQ: GOOG) has purchased RSS feed leader FeedBurner. Terms were not disclosed, but the cost was rumored to be about $100 million. The company provides feeds for about 400,000 customers, many of them blogs. It will be a good fit with Google's Blogger platform, which is widely used.

More menacing for Google's competition is the fact that Google will control the largest banner ad serving company, DoubleClick, the premier search text ad business, AdSense, and, with FeedBurner, the largest RSS advertising platform. Firms, including AOL and The Wall Street Journal, participate in the FeedBurner advertising network. Advertising is sold by channels like "business" and "news' with feeds from the appropriate sites banded together.

Once again, it is surprising that Yahoo! Inc. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) were not buyers. The price of the company was not so high as to be out of reach.

Google's M&A seems to be as good as its search tools.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Google buys FeedBurner, adds to advertising arsenal originally appeared on BloggingStocks on Sat, 02 Jun 2007 11:40:00 EST. Please see our terms for use of feeds.

I have been involved in the investment industry for almost 29 years. The first 13 I spent with Dean Witter Reynolds (now Morgan Stanley (NYSE: MS)) and the last 16 years as a senior partner with two investment banking-research boutique firms. I have worked with over 150 stock research analysts just on the sell-side and another 200 plus on the buy side. Categorically, the title research analyst does not make an analyst a rocket scientist. There are a few myths that need to be explored and more importantly, explained.

There are two and only two types of analysts in the stock research world. 1) those that "get it" and are ahead of their particular industry and can pretty accurately predict what is "going to happen" within the sector they follow, and 2) analysts that are strictly reporters of the news affecting their sectors and do not think outside the box.

Case in point: Stewart Barry of ThinkEquity Partners (my alma mater) has been absolutely brilliant in the internet services sector. Forward thinking, cutting edge research and the ability to separate the news from the noise. Stewart nailed the strong possibilities of Aquantive (NASDAQ: AQNT) and 24/7 Real Media (NASDAQ: TFSM) being acquired. Both are getting acquired. What Stewart nailed wasn't the rumor mill about these two -- he was dead-right on the fundamental issues affecting Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG) and how AQNT, TFSM, and DoubleClick could fill those needs. Stewart Barry is an all-star analyst because he is ahead of the curve and ahead of his peer group. Stewart has reiterated his buy rating on ValueClick (NASDAQ: VCLK) not because it may be acquired, but because the basic fundamentals are superior and the company's growth rate is accelerating.

Continue reading Research Analysts: Some great and some lousy

Research Analysts: Some great and some lousy originally appeared on BloggingStocks on Tue, 22 May 2007 18:35:00 EST. Please see our terms for use of feeds.

Recent mergers between traditional and online advertising firms suggest a deep flaw in the advertising business -- a flaw exposed by Google Inc. (NASDAQ: GOOG)'s evidently unstoppable technology edge. How so? While traditional advertisers deliver open-loop systems, Google delivers a closed-loop solution.

The reason that online advertising is growing is because it offers a closed-loop solution -- a notion that I first described in Net Profit. By contrast, TV and newspaper advertising is an open-loop system -- one in which a company pays to reach a viewer without getting any specific feedback on whether the advertising money leads to increased sales.

By contrast, a closed-loop solution measures the specific response to the advertising dollar -- tracking whether a user clicks on an ad and whether that clicking leads to an online purchase. I call it a solution because it lets the advertiser measure the extent to which advertising expense leads to increased sales. The closed-loop solution's ability to measure return on advertising is an enormous breakthrough for advertisers.

As everybody knows, Google's algorithm for linking tiny text advertising to Internet search has boosted the online advertising business. According to the Wall Street Journal [subscription required], those search-related ads now account for 40% of the $20 billion U.S. internet ad market. And internet-ad sales overall have nearly tripled in the past five years -- to 7% of the $286 billion overall U.S. ad market -- up from 3% in 2002.

Moreover, Google's success is coming out of the hide of TV and newspaper advertisers. For example, in 2006 General Motors Corp. (NYSE: GM) cut its TV ad spending 15% to $1.38 billion and reduced its newspaper advertising 60% to $232.1 million. Meanwhile, GM's online spending rose 16% to $130 million.

Continue reading Online ads' closed-loop solution

Online ads' closed-loop solution originally appeared on BloggingStocks on Sat, 19 May 2007 15:40:00 EST. Please see our terms for use of feeds.

Microsoft Corp. (NASDAQ: MSFT) is paying an 85% premium to buy online advertising firm aQuantive Inc. (NASDAQ: AQNT). Yes, that's 85%. It is the price for being late to the dance.

After missing out on both DoubleClick and 24/7 Real Media (NASDAQ: TFSM), Microsoft had few options left if it wanted a presence in the internet advertising brokerage business -- the intersection where markets buy ads and place them on websites. The companies in this business have huge amounts of data on internet use patterns.

So, Microsoft will pay about $6 billion for a company that had $143 million in revenue last quarter and an operating profit of $20 million. Doesn't Steve Ballmer keeps saying he won't over pay for anything? Before the DoubleClick deal with Google Inc. (NASDAQ: GOOG), aQuantive sold below $30, so the real premium can actually be viewed as well over 100%.

Being so late, and paying so much is a huge strategic blunder, but it is the price for waiting

Douglas A. McIntyre is a partner at 24/7 Wall St.

Microsoft pays too much for aQuantive originally appeared on BloggingStocks on Fri, 18 May 2007 09:10:00 EST. Please see our terms for use of feeds.

NY files to halt Google/Doubleclick deal originally appeared on BloggingStocks on Fri, 11 May 2007 10:40:00 EST. Please see our terms for use of feeds.