Google, Don't Be Evil: Sell Performics

Mar. 16, 2008 6:26 AM ETAlphabet Inc. (GOOG)
Daya Baran profile picture
Daya Baran
5 Followers

Danny Sullivan has a great post on the conflict of interest facing Google (NASDAQ:GOOG) with the consummation of DoubleClick. DoubleClick is an online behavioral target ad network. DoubleClick also owns Performics, one of the largest paid inclusion and pay-for-performance providers. Danny points out that by owning Performics, Google is essentially competing with its customers - in this case SEO and SEM specialists. Even the perception of such can be dangerous to Google's search and advertising business as it erodes the trust of the professional services industry that has built Google's revenue base.

According to sources, Google has been shopping Performics since May 2007 (DoubleClick Performics Shopping). A very high level source also told me that last year that Google and Performics transacted upwards on US$70 million in revenue. So losing Performics would have an impact on Google's share price, which is enjoying a fat multiple. Further, only an entity with deep pockets can afford the money to take Performics off Google's hands. I contacted four (4) CEOs of advertising companies and none of them are in discussions with Google about Performics. So who would Google be shopping Performics to? I don't have a clue. Send me your thoughts.

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Daya Baran profile picture
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Daya Baran is a Seeking Alpha contributor.

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