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Google, Microsoft's DoubleClick Duel

If the truth hurts, get ready for a stinger, Google (Nasdaq: GOOG  ) fans: Your company may not be anywhere near as unique as you'd like to believe.

Earlier today, The Wall Street Journal reported that Big Goo is contemplating a bid for DoubleClick. If true, the move comes just days after Microsoft's (Nasdaq: MSFT  ) own reported $2 billion offer for the digital ad specialist.

But that shouldn't be surprising. Google, like Microsoft with Windows, has only one competitive advantage: a dominant and growing share of the roughly $20 billion market for digital ads.

And I do mean dominant. Researcher eMarketer says that Google captured 25% of all digital advertising revenue during 2006, and that it will grow its share to 32.1% in 2007. But that estimate doesn't appear to account for Microsoft or others beefing up their own offerings, as DoubleClick would do for Mr. Softy.

For investors, what matters here is that Google's cash-rich competitors -- Yahoo! (Nasdaq: YHOO  ) has more $2 billion in net cash and short-term investments, for example -- have realized the need to boost their share of the digital advertising market. I'm guessing they'll not only pay up for DoubleClick, but shell out plenty for some of its better-known peers as well. Here's a list, ranked by current market cap:


Market cap

CAPS stars (out of five)

ValueClick (NASDAQ:VCLK)

$2,680 million



$2,170 million


24/7 Real Media (NASDAQ:TFSM)

$407.9 million


Sources: Yahoo! Finance, Motley Fool CAPS.

Keep an eye on these stocks, Fool. You know Microsoft and Google will.

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Fool contributor Tim Beyers, ranked 1,445 out of more than 25,300 in our Motley Fool CAPS investor-intelligence database, owned shares of aQuantive at the time of publication. Microsoft is an Inside Value pick. Yahoo! is a Stock Advisor recommendation. The Motley Fool's disclosure policy often wonders how a company nicknamed "Mr. Softy" can lead such a hard life.

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