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DoubleClick could snap Google out of its funk
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Written by Daniel   
Wednesday, 12 March 2008 11:38

   Facing threat of Microsoft buying Yahoo, missed earnings, and a report exposing its Achilles Heel, search giant's execs commit to rebalancing

By Juan Carlos Perez and Paul Meller, IDG News Service
March 12, 2008, InfoWorld

 After getting approval from the European Union for its DoubleClick acquisition Tuesday, Google promptly closed the deal and said it is eager to absorb the digital marketing company's technology and services -- and who can blame Google for its urgency?

It has been almost a year since Google announced its intention to buy DoubleClick for US$3.1 billion, and the consummation of the deal comes at a time when Google is displaying rare signs of vulnerability.

The search giant slightly missed earnings expectations for its fourth quarter -- a notable misstep for a company that typically crushes analyst forecasts -- and its stock is off more than $300 from its 52-week high.

Meanwhile, as it stares at the possibility of a stronger competitor if Microsoft buys Yahoo, Google has been busy trying to put a positive spin on a comScore report that highlighted Google's Achilles heel: its overwhelming dependence on pay-per-click (PPC) text ads.

These ads, delivered along with Google search results and in third-party sites in its ad network, make up most of Google's revenue. That's why comScore's report, which said Google's paid clicks had suffered a 7 percent decline in January compared with December, scared the living daylights out of Google investors. [InfoWorld...]  [Comment...]
 

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