According to Bloomberg, Google has agreed to buy DoubleClick for $3.1 billion, almost double the amount that they bought YouTube last year. In my previous post, I talked about the desired for Google in maintaining the market leadership for whatever acquisition. But it clearly showed that the acquisition of DoubleClick will mark as the Google’s largest acquisition ever. $3.1 billion was in fact a significant valuation and the San Francisco-based private-equity firm, i.e. Hellman & Friedman that bought DoubleClick for $1.1 billion in 2005 had strike the “cash” windfall by Google while the iron is hot now. However, I didn’t quite understand why Microsoft did not raised the price of bidding in order to acquire DoubleClick, is this mean DoubleClick is not worth that $3.1 billion?

In the meantime, the above acquisition will make Google the front runner in all the competition of online-advertising market throughout the world. The combination of Google and DoubleClick will offer superior tools for targeting, serving and analyzing online advertisement of all types, significantly benefiting the users, online publishers, as well as agencies and advertisers, as told by Hellman & Friedman.

About once in two-three months, we would definitely came across Microsoft or Google or some other big players bidding for some smaller companies, with the aim to further expand their empires. Reuters just ran an interesting story entitled, “Google interested in DoubleClick purchase: report,” that talked about the proposed acquiring DoubleClick by Google. Acquisitions, mergers, takeovers, have become a significant source of economic activity in the world economy. People all around the world are wondering what is the indication of price each time they came across this news. Though a reputable consulting firm stated that approx. 50% of the acquisitions do not create value for the acquiring firm’s shareholders, but this type of activities are almost appeared daily on Reuters or Bloomberg. I started interesting to find out whether acquisition is the fundamental concept or business rule that a firm should implement as a means for growth. What is the strategy for growth? Does acquire the smaller players in the market is a good strategy when prevail in the global competition? Which theory should we believe in: Big is beautiful or small is beautiful? Why there are so many cases or real examples thereafter acquired a smaller player, the acquiring firm seldom capable in monetize from it, why the stated acquiring firm still going for small and potential companies?

In analyze the above mentioned Microsoft and Google both bidding for DoubleClick, my sense is that Google is prepare to acquire DoubleClick in order to maintain its existing market position whereas Microsoft, on the other hand, has trying to expand its Internet position against its primary competitor on the web, i.e. Google. Simple conclusion but not always correct.