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Internet Giants Continue Race to Build Advertising Capabilities

greek_race.gifIn the past week, the internet giants Microsoft and Google both took major steps in their competitive race, each trying to rapidly build up their capabilities in the digital advertising area. Although the acquired companies do not all have mobile capabilities at the moment, its clear that all of the internet incumbents are trying to build widen their capabilities, and at the same time are migrating these capabilities from the internet to mobile arena.

Microsoft announced the purchase of Rapt, a company that helps on line publishers manage their advertising. The Rapt system generates a database of the ad inventory on a publishers site, regardless of how it is sold (ie through an ad network or directly by the publisher). This can help them with optimizing performance and forecasting.

Rapt also has a consulting group, which helps with publishers with advertising management. According to Scott Howe, general manager of Microsoft’s advertiser and publisher solutions group, Rapt has “an army of consultants, PhDs who used to work at McKinsey or Boston Consulting Groups. These are people we can parachute into publishers to help them. It’s not enough to give clients the rocket ship — you’ve got to teach them how to fly it.”

Google just completed their acquisition of DoubleClick. The $3.1 billion acquisition was pending approval from the European Commission about potential effects on competition in the E.U. This acquisition provides Google with one of the key players in the display advertising business, something they have not really entered themselves. Last year when the deal was announced, Dave Morgan, chairman of TACODA, a targeted advertising network commented, “DoubleClick currently has relationships with virtually every major online publisher and more than half of the online ad agencies.”

DoubleClick has also announced previously that they will be integrating mobile advertising into their DART system, which provided for trafficking, targeting, forecasting and reporting of online ads.

Google this week also announced the beta version of Google Ad Manager. According to the official Google Blog, Ad manager is “directed at addressing the ad management and serving needs of publishers with smaller sales teams. Google Ad Manager is a free, hosted ad and inventory management tool that can help publishers sell, schedule, deliver and measure their directly-sold and network-based ad inventory” … “by providing detailed inventory forecasts and tracking at a very granular level, Ad Manager helps publishers maximize their inventory sell-through rates.”

The next big piece of this puzzle will be to see if Microsoft can work out a deal to acquire Yahoo!. It is an interesting point – because Google has been allowed to acquire DoubleClick, there is now even more pressure on Microsoft to acquire Yahoo!, which arguably would seriously effect the level of competition in this market.

17.03.2008    Tags: , ,
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