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Google enters DoubleClick sweepstakes; Microsoft must be annoyed

Google is reportedly entering the DoubleClick sweepstakes in an effort to keep Microsoft from buying the ad network. It is almost as if Google is playing the how-annoying-can-we-be-to-Microsoft game.

The Wall Street Journal (subscription required) reported that Google is now interested in DoubleClick (see Techmeme discussion.) Sure, Google could build its own DoubleClick-ish network, but why not just buy it for a few billion if only to annoy Microsoft. After all, Google paid $1.65 billion for YouTube, which had nearly zilch for revenue. Google could surely pay the $2 billion DoubleClick's owners want for something that resembles a real business.

For those keeping score at home the DoubleClick sales process shapes up like this: Microsoft is annoyed; Google is like the wealthy kid that giggles as he keeps poking you; and the private equity firm that owns DoubleClick is downright giddy.

Just imagine if you're the owner of DoubleClick right now. Hellman & Friedman bought DoubleClick, which had a spotty track record as a public company, for $1 billion, did some tinkering in the background and now is sitting on a potential bidding war between Google and Microsoft. With any luck–and a few more leaks to the Journal–Hellman & Friedman could more than double its money. Gotta love the private equity game right now.

Meanwhile, the Journal notes that Microsoft is likely to win as the bidding for DoubleClick surpasses $2 billion. That's a shame because Microsoft can't afford to let Google acquire DoubleClick. As noted before, Microsoft should buy DoubleClick to bolster its online advertising services. Microsoft employee Don Dodge has a nice rebuttal to my idea, but Google's entry may change things a bit.

Let's assume Google is serious about DoubleClick. If you combine Google and DoubleClick Microsoft will really have to play catch-up. And I'd argue we're beyond the point where Microsoft could build its way to parity. Take DoubleClick off the market and Yahoo becomes one of the few options for Microsoft's online advertising aspirations. And that's really going to be pricey.