News broke this afternoon that Publicis Groupe has agreed to acquire the search division of (Doubleclick) Performics.

Terms of the transaction were not disclosed. However, in my opinion this deal is likely priced between $250-500 million.

Despite Google’s recent announcement to keep the affiliate marketing division of Performics and rename it “Google Affiliate Network,” everyone in the search community knew that Google’s was going to sell Performics search because of the inherent conflict of interest it poses - think about it…Google, the King of pay per click ad delivery managing its own inventory. Aside from the fact that that could result in a complete monopoly over search (BTW - they already have the monopoly), there are other more obvious concerns such as Google being able to provide preferential treatment to their pay per click and search engine optimization managed clients. You couldn’t build a Chinese Wall large enough to prevent that from happening.

It also isn’t a surprise that Publicis Group was the winning bidder of Performics Search. Rumor had it for several weeks that it was down to WPP and Publicis, both traditional offline ad agencies in need of a serious facelift because they are getting their ass kicked by innovative online marketing companies such as Pepperjam, iCrossing, Did-It, and others. These offline agencies have one of three choices - (1) acquire an online digital company like Performics, (2) White Label the services of an online digital company like Performics, or (3) Build from within. Let’s take #3 off the table because it takes too long and there is a serious supply demand issue with hiring experienced online ad agency people. Many of the offline ad agencies have already attempted to White Label using companies like Pepperjam, as well as the others (and more) I mentioned.

Therefore, the only true option for offline, traditional ad agencies is to acquire. Expect to see more of this in the coming weeks, months, and years.

So - there you are.

Google no longer owns a search-engine marketing management company. This is a slight breath of fresh air…..despite Google’s recent release of Google’s CPC optimizer, which in some respects attempts to compete with the likes of Performics Search. I think it’s going too far.

This entry was posted on Wednesday, August 6th, 2008 at 12:45 pm and is filed under Uncategorized, search-engine marketing, affiliate marketing, search engine optimization, pepperjam, Google, Pepperjam Network, pepperjamADS, Performics, Publicis Groupe. 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.