Google buys ad network DoubleClick for $3.1 billion. And now Yahoo (YHOO) buys Right Media, another ad network, for $680 million. Both moves are an attempt to broaden each Web company's online ad prowess to display ads beyond their own networks. Danny Sullivan explains:
If Google has been weak in display, Yahoo was supposedly strong there. Or so we were told, especially by Yahoo over the years. . . . Yahoo's display network, of course, has been largely restricted to Yahoo's own properties. Yahoo's own properties have huge amounts of traffic, but Citigroup warned back in September that Yahoo's collection of web properties were going to fall behind Google's in traffic. That happened by at least February 2007, according to comScore figures.
So both Google (GOOG) and Yahoo have decided to buy rather than build their own display-ad networks. Right Media is more of an online exchange for display ads, but it amounts to the same thing as DoubleClick—a place to sell remnant ads and spots on the cheap that could not be sold directly or otherwise.
Of course, the whole point of an exchange is that it is a neutral trading ground. But Yahoo's ownership will change that, at least in perception. Will Microsoft (MSFT) or Google use Right Media now that it is owned by Yahoo? Probably not. (Smaller sites, though, may not have such qualms). But would Yahoo have felt compelled to purchase Right Media if Google had not bought DoubleClick? Probbaly not.
Now who is Microsoft going to buy?