According to a report this morning on Morningstar, AOL Time Warner has offered $900 million U.S. to buy TradeDoubler. Reports conflict regarding whether or not there is enough support from TradeDoubler’s Board of Directors to approve the offer. Investors representing about 20 percent of TradeDoubler’s shares, including the company’s largest holder, Arctic Ventures, have said they will accept the offer. But Swedish pension group Alecta, which said it owns 10.01 percent of TradeDoubler, rejected the bid, saying it undervalued the company. AOL said the deal’s closing was conditional on 90 percent of TradeDoubler shares accepting the offer; therefore, it is possible the deal will be rejected. In addition, it is very possible that another company may come in and make a more lucrative offer, which is probably what Alecta is hoping for.

With Rakuten’s purchase of Linkshare in 2006, Doubleclick’s purchase of Performics in 2004, and ValueClick’s acquisitions of Commission Junction in 2003 and BeFREE in 2002, the “Big Three” traditional affiliate marketing networks are in the hands of deep pocketed parent companies.

Some would argue that AOL’s expected purchase of TradeDoubler is a good thing - for TradeDoubler it is, but what about for TradeDoubler publishers / affiliates? I would argue that what typically happens when a large parent comes in is that the original company quickly becomes corporate and loses its edge.

The nimbleness that defined the original company becomes muddied and innovation is placed on the back burner or just placed in the que. Also, getting in touch with the company becomes much more “corporate-like” and getting things done quickly with almost unachievable deadlines becomes something of the past. Moreover, the now larger company hires a bunch of new employees - but those new employees tend to lack the hands-on experience and drive that defined the former company. In addition, you find yourself talking to people who don’t have as much at stake and therefore aren’t as passionate as their former brethren.

Does my opinion mean that TradeDoubler is doomed if AOL buys them? No - TradeDoubler was already a publically traded company (UK) and in many ways was already very corporate - we have numerous personal experiences working with TradeDoubler that left us with a sour taste in our mouth.

However, the AOL buyout would signal an addition of even more red tape as it relates to working with TradeDoubler, but I still believe the story is the fact that performance-based marketing is global and presents an enourmous opportunity for entrepreneur’s and businesses alike.

This entry was posted on Monday, January 15th, 2007 at 12:28 pm and is filed under Uncategorized, affiliate marketing, internet marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.