Search engine leader Google has announced it will buy top digital marketing services firm DoubleClick for $3.1 billion from private equity firm Hellman & Friedman, which bought DoubleClick for $1.1 billion in 2005. The deal, Google's largest to date, will likely help boost Google's presence in the area of Internet display advertising, not that it doesn't already dominate the market. DoubleClick specializes on placing and serving banners and other display ads on prominent Web sites. Google CEO Eric Schmidt noted that the addition of DoubleClick to Google's business would strengthen Google's position with large brand-name advertisers, who tend to rely more on display ads than the search ads that Google specializes in.
The companies added in the statement that the deal, which should close by the end of the year, will lead to more relevant ads for consumers and a more efficient ad buying and selling process for online publishers and advertisers. Google's deal for DoubleClick is both a blow to Yahoo and Microsoft, which were also interested in buying DoubleClick. DoubleClick also announced earlier this month that it was setting up an auction-based online exchange for buying and selling Internet ads, making it even more attractive to the bidders. When asked about why Google felt the need to pay as much as it will for DoubleClick, Schmidt responded: "When we looked at DoubleClick, we felt after a very detailed financial analysis that we could afford to pay this and that it would be a good deal for us and our shareholders." Google has more than $11 billion in cash on its balance sheet.