I’ve always found Google shareholders to be funny animals and yesterday provided yet another example of the curiosity that is their buying/selling patterns. The big story being covered right now is the purchase of display advertising giant DoubleClick by Google for 3.1 billion (that’s right … billion) dollars. This is the largest purchase by Google to date in terms of sale price.
As Jim Hedger from SiteProNews.com points out in his article on the DoubleClick purchase, Google’s paid 20 times DoubleClick’s annual revenue. This is well above the standard for the purchase on online properties. Even so, Google is looking at it not as a normal acquisition but rather a means to propel themselves into the display advertising space years ahead of when they otherwise could. And of course, that they’ve once again trumped both Yahoo! and Microsoft (both of whom were interested in DoubleClick as well) has got to be an added bonus.
Here are some important links on the deal:
- Google’s press release – hear it from the source.
- Jim Hedger’s article – a great summary
- Donna Bogatin’s article on ZDNet – a great eye-opener on some of the questionable sides of the deal. Of course, I’ve loved Donna since her article on Click Fraud.
- Bill Slawski’s post on seobythesea.com – A brilliant analysis by a brilliant patent analyst (don’t forget, Google gets all their patents too).
- WebmasterWorld forums – a place to read discussions and discuss the deal yourself.
So why does all this make me call Google shareholders strange animals? Because Google shares actually dropped yesterday in after-hours trading. This reminds me of the drop their shares took after their Q4 earnings report where they announced an increase in revenue but still noted a decline in share values because the increase wasn’t as high as anticipated (though still in the double-digits). Sometimes it appears that good news for Google’s overall health aren’t properly received by shareholders who sell too quickly and miss out on the true value.
Take my advice shareholders, the DoubleClick deal is a good one for Google. While it might not look great on paper from a pure trade based on the dollar value of the company purchased, the technology and the leaps ahead this will give Google over it’s competitors is well worth the investment. And hey, even $3.1 billion lighter, Google will still report net gains this year.
But what about this makes me