Farewell to DoubleClick

The last three million shares of DoubleClick changed hands yesterday, and the acquisition of the digital marketing specialist is now complete. An April offer to take the company private at $8.50 a stub proved to be too tempting for DoubleClick to pass up. It accepted the buyout offer and now it's publicly traded life is history.

Oh, how it all could have turned out so differently.

DoubleClick was once a giant in online advertising. Its graphical banner ads owned the dot-com landscape. That was before contextual advertising took off. That shift, toward less intrusive, paid-search text ads, meant that portals like Google (Nasdaq: GOOG  ) and Yahoo! (Nasdaq: YHOO  ) were running the show.

DoubleClick tried to evolve into a more diversified provider of online marketing services. It wasn't a bad strategy. Shares of aQuantive (Nasdaq: AQNT  ) have more than doubled so far in 2005 on the strength of its abilities to get companies noticed on the Internet.

Then again, you can guess right and still perform poorly. Just check out some of the companies that are having a bad time of it in paid search like LookSmart (Nasdaq: LOOK  ) and Mamma.com (Nasdaq: MAMA  ) .

DoubleClick's graphical banner proving grounds are now populated by companies like ValueClick (Nasdaq: VCLK  ) and FastClick (Nasdaq: FSTC  ) . ValueClick is doing fairly well. It is looking to earn as much as $0.40 a share this year on a better than 30% surge in revenue.

FastClick? It may be looking to cash in before too long. The company went public earlier this year with a $12 price tag and is now fetching just $8.65 a share.

This doesn't mean that DoubleClick is dead. An affiliate of private equity firm Hellman and Friedman wouldn't be buying DoubleClick for $8.50 per share today if it didn't think the company would be worth more than that tomorrow. Then again, investors who were buying DoubleClick for just over $130 a stub as it peaked back in the summer of 1999 were probably thinking the same thing.

There is no such thing as easy money. Let's hope that DoubleClick is retooled appropriately and comes back to the market stronger than ever.

Want to read more about how text ads roughed up the graphics space?

Longtime Fool contributor Rick Munarriz believes that contextual paid search is far more effective than banner and rich media ads.He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 493952, ~/Articles/ArticleHandler.aspx, 10/1/2014 2:15:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement