Mergers, mergers everywhere

Hey, let's party like it's 1999. No, really, we can. Online is hot again and you can tell by all the mergers taking place:

Google buys DoubleClick for $3.1 billion.

Yahoo buys Right Media for $725 million.

WPP buys 24/7 Media for $650 million.

Microsoft buys aQuantive for $6 billion.

What's the impact of all these mergers? Don't get your hopes up. What I expect is that some of these mergers will have minimal impact and in some cases make things less efficient. These companies will struggle to create the synergy that was the reason for their mergers.

Yahoo buying RightMedia - I wonder if they'll still be a place where you can "find the best partners to do business with, transact directly and always at fair market value."

WPP buying 24/7 - I can't see WPP, or any of the big advertising conglomerates doing anything to make the company better outside of demanding financial accountability, and return, and sending a good chunk of money to headquarters.

Microsoft buys aQuantive - Microsoft doesn't know advertising. They're not a leader in search and their existing network is mediocre, especially when you look at the resources at their disposal. I look for Microsoft to leave well enough alone, possibly changing the technical architecture and forcing all the creative designers to get PCs.

The one that I think will be interesting is Google and DoubleClick. I believe Google will apply their engineering machine and combine their tools with DoubleClick to make something really interesting. Trafficking, tracking, optimization at a whole new level.

It would be a good idea for all these companies to take  look at the failed merger of Daimler and Chrysler. This was supposed to be the merger of two companies that brought different strengths to the table, namely German engineering and American marketing expertise. Now, it's not a pretty divorce. As pointed out in this great article from Business Week, organic growth beats synergy.

The more things change, the more they remain the same. - Paul Herring

Comments

[Paul McEnany]

It's going to be interesting to see how all this stuff shakes out, that's for sure.