March 28 (Bloomberg) -- Microsoft Corp. is in talks to buy DoubleClick Inc., the Internet advertising company owned by private-equity firm Hellman & Friedman LLC, the Wall Street Journal reported, citing unidentified people familiar with the situation.
DoubleClick hired Morgan Stanley to explore its options, including a possible stock-market listing, the Journal said, citing the people, who indicated there are other potential suitors. Hellman & Friedman is seeking at least $2 billion, almost double the $1.1 billion it paid for the New York-based company in 2005, the newspaper said.
The purchase would give Microsoft tools to battle Google Inc. for ads that appear on Web sites. DoubleClick works with advertisers to create online campaigns, such as streaming video clips to promote New Line Cinema's movie ``The Number 23.'' The New York-based company's Dart technology monitors the performance of Internet ads for marketing companies.
``Microsoft is seeing the growth in display advertising after the last couple years were dominated by search,'' said Sameet Sinha, an analyst at Kaufman Bros. LP in New York who covers DoubleClick competitors aQuantive Inc. and ValueClick Inc. He rates both companies ``buy'' and doesn't hold either stock.
DoubleClick spokeswoman Elizabeth Crosta, Microsoft spokeswoman Dawn Beauparlant, and Hellman & Friedman spokesman Steve Bruce declined to comment on the report.
DoubleClick went public in 1998 at a split-adjusted $4.25 a share and reached a record of $134 on the first trading day of 2000. Its shares collapsed along with other Internet stocks in March 2000, and it traded as low as $4.53 on Aug. 5, 2002.
The company competes with aQuantive in providing technology that shows advertisers how many customers they are reaching with online campaigns. Seattle-based aQuantive, with sales of $442 million last year, is valued at $2.15 billion.
By comparison, DoubleClick had about $150 million in sales last year, the Journal said, citing an unidentified person familiar with the company. Sinha at Kaufman and Richard Fetyko, an analyst at Merriman Curhan Ford & Co. in New York, said Hellman & Friedman is seeking too high a price based on that number.
``It doesn't make sense,'' Fetyko said. ``Either the $2 billion is off or the $150 million is off.''
Shares of aQuantive fell 6 cents to $27.40 at 4 p.m. New York time in Nasdaq Stock Market trading, and ValueClick shares rose 8 cents to $26.52. Shares of Redmond, Washington-based Microsoft shed 8 cents to $27.64.
Earlier this year, Publicis Groupe SA bought Digitas Inc., a Boston-based online ad agency with sales of $565.5 million, for $1.3 billion.
Microsoft may be able to use DoubleClick's Dart technology to steer advertisers away from Google, the owner of the most-used search engine. The Mountain View, California-based company and No. 2 Yahoo! Inc. have been more successful than Microsoft in winning customers by offering more ways to track ads and measure their impact.
The recent proliferation of user-generated content on Web sites gives Microsoft a chance to use DoubleClick to move into display ads for Web sites before Google has a chance to expand its own services for advertisers, Kaufman's Sinha said.
Since Microsoft first released its own search technology more than two years ago, the company's share of the market has declined. In standard Internet search, Google has more than five times the usage of Microsoft's MSN and Windows Live search engines, according to researcher Nielsen//NetRatings in New York.