Affiliate Marketing

Google announced today that they have reached a definitive agreement to acquire DoubleClick Inc. for a cool $3.1 billion in cash from Hellman & Friedman along with JMI equity and management. In the affiliate marketing world, DoubleClick is best known as the parent company of Performics, which has long been considered one of the big three affiliate networks alongside Commission Junction and Linkshare.

Google is looking to expand their advertising network capabilities, and this is perhaps another move by Google to get into the affiliate marketing space. I have long thought they had larger plans than the simple entry into the CPA space they announced a couple weeks ago. Google wants a piece of the affiliate marketing pie, and apparently they just got themselves one. It only cost them $3 billion.

The official reasons for the acquisitions are as follows:

The combination of Google and DoubleClick will offer superior tools for targeting, serving and analyzing online ads of all types, significantly benefiting customers and consumers:

• For users, the combined company will deliver an improved experience on the web, by increasing the relevancy and the quality of the ads they see.
• For online publishers, the combination provides access to new advertisers, which creates a powerful opportunity to monetize their inventory more efficiently.
• For agencies and advertisers, Google and DoubleClick will provide an easy and efficient way to manage both search and display ads in one place. They will be able to optimize their ad spending across different online media using a common set of metrics.

I have no doubt that Google will greatly expand their advertising network and publisher content alliances through this acquisition. I have to ask myself where Google is headed. In light of their recent attacks on the affiliate marketing space in both Adwords and through their search algorithm: Is Google out to kill affiliate marketing once and for all? Are they going to disband the traditional form of affiliate marketing that Performics currently engages in and replace it with their own proprietary “affiliate technology”? Somehow, I doubt it.

I think they are more interested in keeping the network as it is and collecting the revenue share from merchants. But parent companies and affiliate networks don’t always share the same viewpoint. The last time a large affiliate network’s interests clashed with it’s parent company was at Commission Junction. It is widely thought that ValueClick was behind the ill-advised Javascript Link Initiative that caused so much outrage in the affiliate marketing space. It took thousands of complaints, a petition, and several large merchants considering leaving the network before CJ backed down from requiring the transition to javascript links. Let’ hope Google does not have similar plans in their takeover of Performics.