Tuesday, January 24, 2006

Understanding Google's dMarc Purchase

Henry "Internet Outsider" Blodget helps us understand the Google dMarc purchase.

From his post:

"So let's extrapolate: If there aren't already, there will soon be companies like dMarc for all media: Television, newspapers, magazines, telemarketing, outdoor advertising, etc. Google will buy the leading player in each market. Advertisers will go to Google to design and manage coordinated advertising campaigns across all media--with Google, presumably, taking a cut of every dollar spent on other companies' media properties (the TV and newspaper equivalent of AdWords for Google Network Partners). Other media companies will continue to manage the expensive hassle of creating content, and Google will monetize it.

The profit equation, in other words, will look similar to the current one on the web: Other companies create the content, Google helps users find it and advertisers find them. In exchange for this service, Google keeps a fat cut of the profits."

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Anonymous Anonymous said...

Was browsing Technorati and found your blog. I don't find this Google/dMarc description very compelling. Basically this posits that Google will be an ad agency with slightly better distribution efficiency. If this is the case, the purchase price is way out of line.

Jim Kerr
Pollack Media Group

January 26, 2006  
Blogger daniel davenport said...

Hey Jim

Thanks for stopping by. There are a number of posts around about the valuation of the deal. In general it seem like if they can monitize audio like they have with user generated web content then its a good deal. More real estate to sell.

See my previous post:


From Mark Ratcliffe:

"At $102 million, the least Google will eventually pay, dMarc appears to be a steal. As the company meets undisclosed ad revenue targets over the next three years, its shareholders will receive up to $1.1 billion more. Google only pays if dMarc's business develops as promised, so it's not a risky investment at all; at full price, however, the deal's not cheap because the radio advertising market is shrinking and there is mounting evidence that people will pay for audio content without advertising."

January 27, 2006  

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