It's Official - Google Buys Admeld

According to The Official Google blog, Google has purchased AdMeld for a still-to-be disclosed sum.

From the Google blog post and VP Neal Mohan:

“By combining Admeld’s services, expertise and technology with Google’s offerings, we’re investing in what we hope will be an improved era of flexible ad management tools for major publishers. Together with Admeld, we hope to make display advertising simpler, more efficient and more valuable, provide improved support and services, and enable publishers to make more informed decisions across all their ad space. These are all things our publisher partners have been asking us to further invest in. Of course, Admeld will continue to support other ad networks, demand side platforms, exchanges and ad servers, to yield the best possible results for publishers.”

Read Mohan’s interview with AdExchanger.com on the deal here.

TechCrunch’s Mike Arrington, who reported the deal was done as of last Thursday, said at the time that the price tag was $400 million.

There’s also a post from Admeld CEO Michael Barrett on the Admeld blog here which reads in part:

“This is an exciting moment for Admeld, not only because it speaks to the quality of our platform, team, and the results we produce for our clients, but also because it underscores Google’s dedication to helping publishers get the most out of the display ad landscape.

What’s driving this relationship is a shared belief that managing display advertising is still far too complicated for publishers, and together Admeld and Google can help address some of the underlying inefficiencies. Though we have no specific integration plans yet, we imagine our combined offerings can help publishers make more informed, efficient, and profitable decisions across all tiers of their inventory.”

Reaction from around the Web (will update throughout the day):

The Real Reason Google Is Paying Up Big For Admeld – Ad Age
News Analysis: Google’s AdMeld Deal – MediaPost
Google Enters Agreement to Acquire Admeld – LUMA Partners
Google Strikes Deal for Admeld (subscription) – The Wall Street Journal
Google-AdMeld Deal Opens Questions – DIGIDAY
Google And Admeld: Pressure Is On Display Competitiors—And Publishers – PaidContent
Google Announces Deal for Admeld; Price Tag Said to Be $390 Million – Ad Age

Forrester analyst Michael Greene offers:

“This deal continues to demonstrate Google’s dedication to the online display market, and especially to the ecosystem of exchange-based media buying. In buying AdMeld, they take out a competitor in the business of enabling real-time bidding (RTB) for publishers and gain incremental liquidity and volume in what will become a combined exchange. AdMeld also brings with it a large roster of high-quality publisher clients. Gaining access to high-quality inventory has been a major pain point for every exchange/SSP. However, there is no guarantee that these publishers will stick with the combined offering. Relatively low switching costs mean these relationships aren’t the most sticky and you can bet that competitors – most notably Rubicon Project – will be aggressive in appealing to publisher concerns over Google’s dominant market position.”

Read more industry reaction to the acquisition on AdExchanger.com here. And, PubMatic CEO Rajeev Goel’s views here.

More Analysis from AdExchanger.com

There are many in ad ecosystem who will likely be breathing a sigh of relief if the $400 million price is correct. This isn’t the $70 or $80 million Invite Media transaction which temporarily capped the potential for a profitable exit for some.

Regardless, new questions arise such as:

Will large Admeld publishers stay with Admeld/Google and “feed the beast” as Google continues – like no other company – to put a stranglehold on all layers of the marketing stack? How will big media react?
Is regulatory scrutiny possible?
Real-time bidding (RTB) is “hot” to a relatively small number of buyers, sellers and inventory today given the potential. Google is betting its display chips on RTB. Can the company “own” real-time bidding?
How does this impact the buyside with fewer RTB enable inventory pools assuming Admeld is integrated into the same pool as DoubleClick Ad Exchange? It will be interesting to learn integration plans and timing.
What will be the impact of Admeld technology in or with DFP? One would assume this helps solidify DFP with existing clients and makes the case not to switch to other up and coming (or legacy) ad serving solutions at the least.
Private exchanges (Admeld) and private ad slots (Google) – what’s next here? Do these two strategies come together?
Will other players such as Yahoo!, Microsoft – or companies like Oracle, IBM, SAP, etc. – feel the need to step-up and buy competing sell-side platforms, networks, exchanges?
Where will Michael Barrett go next assuming he’ll depart the company once the transition is over? Or, will the Admeld CEO make an extended stay at “the cabana”? A great win for him and the Admeld founders Ben Barokas and Brian Adams.
And LUMA Partner’s Terence Kawaja point is well-taken (who was also the investment banker on the deal) about taking this RTB world to premium/guaranteed inventory. It’s been non-guaranteed/remnant at first – but how long until the big brand seller is comfortable with letting go of his more premium inventory in a biddable environment? Effective automation comes over time to some guaranteed. The custom opportunity remains the domain of the direct seller.