Unless you have been living in a cave for the last month, you have no doubt heard of Google’s plan to acquire online advertising company, DoubleClick. Along with that deal, they will acquire search marketing company, Performics which DoubleClick had purchased beforehand in 2004.
This has created a stir of controversy among search marketers who are now concerned over the fact that Google owns a search marketing company. Will they embrace it of which there would then be concerns over whether Google would give them preference over other search marketing efforts? Will they sell it to avoid the obvious conflict of interest? Or will they simply shut it down.
In a FAQ statement released last week when new of the acquisition was announced, Google said, “Performics is part of DoubleClick, and we are acquiring it as part of the transaction. We have no plans to dispose of it at this time.”
Today, when you read that same FAQ, it has the following to say about Performics:
They have built a strong business that is valued by their clients, and we will be evaluating all strategic alternatives for this business. We are committed to continuing to meet the needs of Performics clients, and we expect no interruption in service during this transition. Google has many important agency, SEM, and other partner relationships, and we continue to value those relationships.
That’s not a commitment to embrace nor sell of the company, only that they will be “evaluating all strategic alternatives.”
What They Might Do
If they keep Performics as is, then it will obviously create a conflict of interest in relation to Google’s organic search results. The reason being is that Google would be earning revenues directly related to the process of marketing sites for organic search, Google’s index being one of the targets. This would go against their commitment to ensure their organic index remains strictly editorial, meaning that money has no influence over it.
They could keep it but phase out the services that would generate controversy such as organic and paid search marketing. However, what happens to existing client relationships? Will they abandon these campaigns, refer them to another SEM agency or something else? With existing relationships with the likes of America Online, Cingular, CompUSA, Eddie Bauer, OfficeMax, Quickbooks, Staples, Verizon Wireless, etc., it is unlikely that Google would simply cut them off.
I doubt they will just kill it either as some are speculating. It just is not good business sense to shut down something that is profitable.
What They Should Do
What they should do in my opinion is to put Performics on the auction block – sell it to the highest bidder. If DoubleClick bought them at one time for $58 million, surely Google can get something for them today. Possibly another large online advertising agency would be interested in acquiring Performics’ technology as well as client base to add to their existing suite of services.
Any Alternatives?
The only other alternative if a buyer is not found would be to orphan it. In other words spin it off on their own to run as an independent company once again. This would be the “ethical” thing to do if a buyer is not found. However is it probable that Google would simply set a profitable company free to operate on its own with no monetary gain? Most likely not.
