Google Inc (GOOG) recently announced that its online ad-placing service Doubleclick and social-networking giant Facebook Inc (FB) have entered into a partnership. As per the terms of this partnership, the clients of Google’s Doubleclick exchange will be able to purchase re-targeted inventory on Facebook Exchange, an auction service started by Facebook in 2012.
Prior to this partnership, Doubleclick clients wishing to deal with the Facebook exchange had to deal with Facebook separately. But now, the Doubleclick exchange also includes Facebook inventory, which increases flexibility and reach for Google’s advertising clients.
In online auction services, advertisers buy a lot of space simultaneously. Auction services like DoubleClick are largely dependent on a huge amount of inventory to sell to customers. With the addition of Facebook Exchange, Doubleclick gets to significantly expand its inventory.
Google’s decision to partner Facebook is something of a surprise since the two companies happen to be fierce competitors. The partnership, however, is likely to be beneficial to both. Facebook hopes to see prices increase, as Google’s hoard of customers may be expected to bid up its inventory. This will help both revenues and profits Google, on the other hand, hopes to charge a certain amount as fees per customer that it sends to Facebook, helping it make money from a rival platform.
In the meantime, Google continues to innovate. With the recently launched update to Google’s search application for devices running Apple’s (AAPL) mobile operating system, people will be able to avail a unique facility by which they can set reminders on an android device at home and later receive them on an iPhone.
Google is a market leader in online advertising and it has been trying to explore various ways to diversify its revenues and fight competition. Google continues to acquire smaller companies with specialized technology to boost its different offerings. In Feb 2013, it acquired Channel Intelligence for $125 million to boost its e-commerce business.
Earlier this year, it acquired an infrastructure startup company, Talaria Technologies, to boost its cloud offerings. Google also acquired a mobile mapping and navigation company – Waze Inc. – for about $1.1 billion.
Google reported gross revenue of $14.89 billion in the third quarter of 2013, up 5.6% on a year over year basis. The company has expressed its intention to increase investment in its core products in the future.
Currently, Google has a Zacks Rank #3 (Hold). LinkedIn Corp (LNKD) with Zacks Rank #2 is also worth consideration, this season.
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