Here’s why Google bought DoubleClick and Microsoft bought AQuantive

I believe the ability to sell advertising by conversion is a big part of why Google bought DoubleClick for over $3 Billion and Microsoft bought AQuantive for $6 Billon.

Over a year ago Google introduced conversion tracking in its AdWords advertising program. When a visitor to a website takes a specific action such as making a purchase or signing up for a free trial this action can be measured as a ‘conversion’. You should not be doing pay-per-click marketing unless you’re tracking conversions.

Conversion tracking is the most significant difference between internet business in 1999/2000 before the dot-bomb crash, the internet business today. Instead of measuring hits to a website we can now measure what the consumer did on the website.

Earlier this year, Google launched ‘Pay Per Action’ in beta. This program works like an affiliate program where the referring website gets paid for a conversion on the site. This beta program was run in Google AdSense largely Google ads and banners run on partner websites. The purchase of DoubleClick gives Google strength in the banner impressions business (Google’s strength was in small text based search ads). After they work out the technical kinks, Google (and MSN) will be able to offer advertisers one interface that measures ad performance in search and banners with conversion tracking.