Double take on DoubleClick

Like many early dot-coms, DoubleClick once led a promising industry before its time. That would be the business of selling and targeting ads for thousands of Web sites. It reigned as a powerful online ad network, promising an all-seeing eye for data that could match any advertiser with the right customer.

But when market forces and privacy concerns came to bear, DoubleClick retreated into the safer business of supplying the technology to deliver ads and marketing campaigns.

Now, some would say (and some did say) that was the smart move. But now that online advertising sales have rebounded, it would seem not.

Google and Yahoo, for example, are making billions of dollars annually on selling and targeting ads on their own sites, as well as for thousands of other Web sites. Their success has primarily been fueled by sales of effective search ads, but both are now looking to DoubleClick's early banner-ad business as a new avenue for growth.

Meanwhile, DoubleClick's marketing-technology business has been squeezed by commodity pricing, and many industry watchers have wondered openly when marketing automation software will take off. DoubleClick's $1.1 billion buyout by private equity firm Hellman & Friedman leaves questions of how the business will grow in the next several years.

Mary Meeker, financial analyst at Morgan Stanley, wondered that aloud Monday at the Ad-Tech conference in San Francisco. "We'll see private equity firms become more and more active. (But) I'm not sure how they will transform the business in the next three or four years," she said. Hellman & Friedman has yet to lay out a plan of action.

But the way it stands now and likely into the future, companies with the most influence to sell advertisements are those with the most influence among consumers. That's the way it works in the print world at least. And as an online ad network, DoubleClick didn't hold influence with consumers.

Yahoo and Google, on the other hand, play host to billions of visitors every year.

"Google and Yahoo, those are the companies most interesting to look at" when it comes to online advertising, said Meeker, whose bank took Google public last year.