Who really wins?

So Google will gobble DoubleClick for $3.1 billion in an all cash purchase (not stock as was the case in the YouTube acquisition). Word on the street is Microsoft was also in hot pursuit for DoubleClick. But it seems Google won this round. Or did they?

Microsoft has $28.8 billion in cash, cash equivalents and short-term investments vs. Google’s $11.2 billion. The Google machine currently spits out $3 billion of profit per year vs. Microsoft’s $12.6 billion. DoubleClick’s customer base and entrenched network could have provided Microsoft’s Internet profit engine a badly needed booster shot. Granted Google will also reap benefits here, but Microsoft’s utility curve is much steeper then Googles in this regard.

It appears Microsoft wasn’t prepared to pay an insane valuation even if they needed DoubleClick more then Google. And Google was prepared to any price to protect its dominance in Internet advertising. Maybe Microsoft saw this as not only an opportunity to gain if they did end up purchasing DoubleClick, but also a gain if they made Google pay foolishly.

(Disclosure: Ethan Bloch has no affiliation, nor does he posses any material investment (ex. Common stock) in either Google Inc. or Microsoft Corp.)