Google's Mad Dash

Some on Wall Street agree with Google about the potential of combing the two types of online ad businesses and believe it could even throw open the floodgates for large advertisers.

Bank of America Securities analyst Brian Pitz had forecast that the growth in branded advertising would outpace search advertising in the second half of 2007. "This deal gives us added confidence, as we believe the combined Search and Branded advertising platform should provide large branded advertisers with the accountability and tools they have been seeking with respect to online advertising spending -- a catalyst for accelerating the online migration of advertising dollars -- especially from larger under-penetrated industries such as Pharma and Consumer Package Goods where online represents only 1-2% of total ad budgets," he wrote in a research note on Friday. Bank of America Securities makes a market in Google shares.

Still, Schmidt struggled to explain why now was the right time for Google to snap up DoubleClick. In response to a question about why the deal was happening now, Schmidt said, "When we did a strategic review, which we've done for this year, we realized that the scale of the display ads business was much larger than we had thought." Google's move was driven by an "understanding now of how much larger an opportunity it was and how it could be targeted," he said.

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