Valueclick’s stock price trended up after the Doubleclick acquisition by Google. When I saw this I thought, “that’s not that surprising, it seems like the market would react positively to anyone related to online advertising after such a large purchase price.”
But then when I see financial writers making claims like “Valueclick is the better Doubleclick”, I have to say something.
Valueclick has had a nice run, and as the writer points out that have some nice financial numbers. But the Google acquisition of Doubleclick at such a price is based on more than the raw revenue and profit of Doubleclick. It’s based on strategy. Valueclick is SORT OF like Doubleclick in the sense that they both do have ad serving business units, and they both have affiliate business units. However, Doubleclick’s ad serving business is much larger with a much higher quality client base. Valueclick’s media business which got a big boost when they bought Fastclick drives a lot of their revenue. This is entirely different from Doubleclick.
Doubleclick has deep technology relationships and integration with the best advertisers/agencies and web publishers. While they might not extract the most revenue possible from these parties due to their technology, Google was paying such a premium because of these relationships and because of the potential for Doubleclick to put together an ad exchange based on these relationships (harder to execute than they might think). Those deep technology relationships are not dropped easily.
Valueclick on the other hand profits from operating mostly as an ad network. A relationship that is all easy for publishers and advertisers to drop at any point in time. Buying Valueclick would not give Google or Microsoft or Yahoo the deep relationships with top advertisers and publishers that buying Doubleclick provides.
This is not to say Valueclick isn’t a successful company, that’s not what I’m arguing. But it’s not really accurate to relate the two that closely, and it’s not accurate to label them as the better Doubleclick.