Wednesday, July 27, 2011
Last month we announced our plans to acquire Admeld, in order to make display advertising simpler, more efficient and more valuable for publishers. Companies have publicly said that this acquisition “is great news for the industry and is proof that our space will continue to have aggressive, compound growth for the next several years” (Cadreon) and that it “will accelerate innovation and lead to great new advertising options for both publishers and advertisers” (Photobucket). Some more industry reaction is here.
We’ve been discussing this deal with the Department of Justice, who are obliged to review the transaction because of its purchase price. As they do for many acquisitions, they have sent us a “second request”, which means that they are asking for more information in order to complete their review of this particular acquisition. This doesn’t surprise us, as today’s display advertising industry is very new and highly complex. But we’ll work to enable this review to be concluded as quickly as possible - display advertising is highly competitive and fast moving, and we don’t want our efforts to bring better services to our clients to be delayed.
Here’s why we think the display advertising business is, and will remain, extremely competitive:
- Buyers and sellers of display ads and ad space have an incredible and ever-growing range of options for transacting display ads—direct sales, networks, exchanges, demand and supply platforms, yield managers, private exchanges and more.
- In fact, since we announced this acquisition about a month ago, at least three new and expanded platforms for buyers and publishers have been launched. Others continue to grow.
- Analysts have noted that switching suppliers is relatively easy and that this isn’t a “sticky” business.
- Even another supplier of publisher solutions is reported as acknowledging the reality that Google “continues to face competitive pressure from the more than a thousand companies angling for a piece of marketers' budgets".