Ad Deals Lacking Logic

There's no shortage of analysis of all the recent blizzard of M&A deals, but I don't think you can say that many of them have much rational promise of a satisfactory return. Sure, they may pay off in the end, but you can say the same about any speculative transaction.

Strategically speaking, these deals are defensible, even sensible. DoubleClick has the potential to give Google the leverage it needs to expand its advertising dominance from search and into banner ads. And aQuantive has the potential to keep Microsoft a nimble racer in Internet advertising.

But we've reached a point where deals can make a lot of sense strategically -- and none financially. Big-ticket Internet deals have been popping up here and there for a while -- Google's $1.7 billion purchase of YouTube, eBay's $2.6 billion bid for Skype and Cisco's (CSCO Quote) $3.2 billion buy of Webex -- each drawing observations that they were outrageously priced and signs of a new tech bubble.

But those earlier acquisitions had a difference: They involved clear leaders in emerging technologies that promised to disrupt old ways. DoubleClick and aQuantive -- and for that matter 24/7 Real Media (which ad giant WPP is buying for $649 million) and ValueClick (which, despite a pending FTC inquiry, is viewed as a possible target of Yahoo! ) -- all offer some interesting technologies, but none are disruptive and all have been around for the picking for years.