Chris Dixon begins this episode of Founder Stories with DoubleClick and FindTheBest Co-founder Kevin O’Conner by telling O’Connor that “DoubleClick is probably the closest thing New York has to a PayPal.” Meaning the two companies share an aptitude for hiring employees that go on to start innovative businesses.  Just as Paypal spawned Yelp, YouTube, and LinkedIn, DoubleClick spawned dozens of startups in New York City like Right Media.

With this in mind, Dixon asks O’Connor if he intentionally created an environment that encouraged innovation while at DoubleClick, before going on to ask O’Connor what he considers to be the defining characteristics of successful entrepreneurs.

O’Connor describes his systemized way of spurring innovation.  He lists a few signs of a successful entrepreneur.  A desire for control and the ability to challenge authority are near top of the list. A way to detect the second trait? “Have you told your boss to shove it?”

In the video below, O’Connor discusses his genesis of his latest startup, FindTheBest, a service that offers side-by-side comparisons of everything from cigars to business schools. At the intersection of trying to solve a “big obvious” idea and not finding a site that served his needs, O’Connor began to build what would become the company. He describes it as a “decision engine” to help you make complicated decisions where search falls flat. What dog should I buy? Where should I send my kid to summer camp? What investment adviser should I hire?

Make sure to watch both videos for additional insights along with the first two installments of this interview (Part I and Part II), as well as past episodes of Founder Stories here.

A serial entrepreneur, Kevin O’Connor’s latest venture is FindTheBest, a company that offers comparisons on everything from credit cards to golf courses. Prior to FindTheBest Kevin was a founder of DoubleClick, which Google ended up buying for $3 billion.

In this episode of Founder Stories, O’Connor takes us back before his DoubleClick days to when he joined Atlanta’s Internet Security Systems during its infancy. He tells host Chris Dixon what a 20-year old college dropout had to do with him signing with the startup. Speaking of those early days, O’Connor says, “I don’t think any of us realized it would be a billion dollar company.”

Below, O’Connor discusses life after ISS and the path he and  Dwight Merriman took en route to creating DoubleClick. He says the two quit their jobs, spent six months brainstorming products and initially struck out with a job service site. As O’Connor tells Dixon, the two “made a fundamental mistake” while pitching potential clients.

Dusting themselves off, they struck gold while conceiving scores of ideas out of O’Connor’s basement. The idea for DoubleClick was crowned the winner and after taking center stage O’Connor says, “I went upstairs and I told my wife… the search is over, tomorrow we start the business.”

Make sure to watch both videos for additional insights along with past episodes of Founder Stories which can be found here, especially this one with former DoubleClick CEO Kevin Ryan.

Former DoubleClick CEO, Kevin Ryan led the company through a period of explosive growth in the late ’90′s. He took the ad-targeting company from a handful of employees to more than 2,000 in just 4 years before selling to Google for $3 billion. However, as Ryan discusses in this episode of Founder Stories with Chris Dixon, the dot.com bust threatened to wash it all away.

Ryan says during the downturn, “we lost 70% of our clients, bankrupt, and the only thing that saved us is we probably lost 80% of our competitors.” His white collar war story features seven rounds of layoffs.  Make sure to watch this episode as Ryan relates how he rebounded and went on to start AlleyCorp, a network of companies that includes Gilt Groupe, Business Insider, ShopWiki, and 10gen.

In the below clip, Ryan dives into the beginnings of one of these AlleyCorp companies, 10gen, which makes the MongoDB database.

The first Founder Stories episode with Kevin Ryan can be found here and past episodes of Founder Stories, with founders such as David Karp, Fred Wilson and Christopher Poole can be found here.

Is Google serving up ads targeted at sites which categorize themselves as “extreme porn,” bestiality,” and “child porn”? Rest assured, it is not. But if you are a website publisher using DoubleClick’s Ad Planner to select categories to match your site to advertiser’s interests, you might think so. The screenshot at right and below shows what one publisher found when choosing self-descriptive categories. Under “Adult” and “Porn” are those three categories. The issue was first brought to Google’s attention in this help forum, and subsequently by TechCrunch.

It turns out this is a software bug, but what a doozy. DoubleClick, which is part of Google, maintains a blacklist of categories and keywords it will not serve ads against. Those include “extreme porn,” “bestiality,” and “child porn.” Somehow categories from the blacklist started appearing as regular options within Ad Planner. Google is removing those now and says no ads were actually served against those categories even if somebody selected them.

A Google spokesperson provided us with the following statement:

“This was a mistake that we are fixing. This screenshot is from the Ad Planner Publisher Center, where we allow publishers to claim their sites and self-identify the categories of content that their sites showcase. We maintain an internal list of categories of policy-violating content to prevent that content from entering the network, and due to an error some items from that list were recently surfaced in the Publisher Center UI. We are working to correct this error immediately, and we can confirm that it was strictly an error in the publisher interface. No advertiser has ever had or will ever have the ability to target ads to categories like child pornography or bestiality.”

That’s reassuring. But how does a mistake like that happen in the first place?

Henger joins Catalina Marketing from Google’s Affiliate Network business, originally part of the Google acquisition of DoubleClick in 2008 and launched in August of that year.

Henger served as a member of the executive team at Performics, an interactive marketing firm specialized in search and affiliate marketing, which was acquired by DoubleClick in 2004, for six years. After the acquisition, Henger played a key role in integrating DoubleClick Performics with Google’s Affiliate Network launch.

Prior to joining Performics, Henger was Senior Vice President/General Manager at publicly held Emusic.com, (acquired by Vivendi Universal).

Previously, he was responsible for all aspects of RollingStone.com including managing sales, technology, marketing and operations for the standalone division.

Henger spots a lot of similarities between Catalina Marketing and his previous employer:

“Catalina Marketing essentially does for its retail and CPG partners and brand clients what Google does for its advertisers – delivering relevant, highly-valued communications to large, but precise audiences; plus, Catalina Marketing gives brand advertisers access to the most important measure of engagement – incremental units sold.”

Henger will manage the company’s in-store network, said to be comprised of 90 million households and 300 million weekly shopper transactions.

(Thanks to Affiliate Summit / Flickr for letting us use the picture of Henger)

If you run a Website that uses DoubleClick’s DART ad server or Google Ad Manager, those products just got a major upgrade and rebranding. The DART brand is being retired and it will now be called DoubleClick For Publishers. Meanwhile, Google Ad Manager (which targets smaller Websites) will now be called DFP Small Business. With the rebranding, DoubleClick is rolling out a new dashboard to manage the ads served on a publisher’s Website, improved ad-serving algorithms, and a new set of APIs.

Google is consolidating all of its ad serving products for display ads under the DoubleClick banner, and turning DFP Small Business (formerly Google Ad manager) into a feeder system for DoubleClick for Publishers (formerly DART). Google details some of the new changes on its main blog:

• A new interface that has been completely redesigned to save time and reduce errors.
• Far more detailed reporting and forecasting data to help publishers understand where their revenue is coming from and what ads are most valuable.
• Sophisticated algorithms that automatically improve ad performance and delivery.
• A new, open, public API which enables publishers to build and integrate their own apps with DFP, or integrate apps created for DFP by a growing third-party developer community (apps under development today include sales, order management and workflow tools).
• Integration with the new DoubleClick Ad Exchange’s “dynamic allocation” feature, which maximizes revenue by enabling publishers to open up their ad space to bids from multiple ad networks.

There is more detailed info on the DoubleClick blog.

Google, which has dominated search advertising, is hoping to take over the display advertisement space by launching new DoubleClick Ad Exchange to create an open, real-time marketplace for large online publishers and ad networks and agencies to buy and sell display advertising space. In an announcement made on the company’s blog, Google says that display advertising, which are ad formats that include videos, images and interactive ads are becoming “vital in boosting awareness and sales” on the web.

Traditionally, publishers and advertisers using Google’s AdSense and AdWords products would have to manually plan their display ad campaigns. Now, publishers can tap into Google’s ecosystem for ads where prices are set in a real-time auction and advertisers can access a large pool of inventory within one platform.

Google says the benefits for publishers include the real-time allocation, letting them allocate ad space to the advertiser that pays the most at a given time; access to more advertisers; greater control over advertisers and ad formats, a sleeker UI, and payment system managed completely by Google.

And of course advertisers can access a platform that provides more publishers and ad space, a greater control over where a display ad appears, and access to a new API that lets advertisers and networks integrate their own functionality and systems when working with the Ad Exchange.

Google bought display ad provider DoubleClick in 2007 for $3.1 billion in cash, after apparently winning a bidding war with Microsoft. The announcement of this new marketplace is a direct move against Yahoo, which has dominated the display ad marketplace for some time.

Adgregate Markets, a TechCrunch 50 startup, has signed a distribution deal with Google’s DoubleClick. Adgregate’s ShopAds allow consumers to browse, interact, and ultimately purchase directly within an ad unit. Normal display ads take users away from a publisher’s site and brings them to a third-party store but Adgregate lets users buy products featured in ads without moving away from the page. Adgregate, which presented its technology at TechCrunch 50 last fall, received positive reviews from our panelists, who included entrepreneur Marc Andreessen; MySpace CEO Chris DeWolfe; Salesforce founder Marc Benioff, angel investor Yossi Vardi; and former Yahoo executive VP Ash Patel. The panelists unanimously agreed that Adgregate was a great idea that will make money and address a need in the display ad market.

It was only a matter of time before Adgregate’s technology attracted big-name interest. ShopAds, which is a widget, can replace any size banner ad and will now be available to all of DoubleClick’s advertisers. If a user views the ad widget and wants to buy the product it’s advertising, they need only to click the description button under the ad and click “add to cart” to buy it. From there, the user can pay directly in the widget by inputting credit card information in a secure buying process.

Adgregate will share revenue with both DoubleClick and the retailer whose goods are being sold in the ShopAd widget. But the publisher of the ad only gets a share of revenue if the retailer has accepted them as an affiliate publisher. If that is the case, then the publisher will also get a separate commission fee from the advertiser. This isn’t a bad deal for publishers. Advertisers have an incentive to pay a higher commission to publishers so they put their ads in a more prominent spot on their page, but the money is being split an awful lot of ways.

Competitors to Adgregate include Nooked and Lemonade, which both also allow publishers to embed an e-commerce widget on their sites, but lead users to the retailer’s site for purchases. Adrgregate’s technology is useful to publishers because users can purchase an item in the ShopAd widget without having to ever leave their site.

Display ad network DoubleClick was bought by Google in 2007 for a $3.1 billion, outbidding Microsoft and pushing through eventual approval of the deal in both the U.S. and Europe.

Here’s an example of one of Adgregate’s embeddable ShopAd widgets:

https://secure.adgregate.com/p_item_m_widget_preview.swf

As online advertising spending continues its meteoric rise — the Wall Street Journal is reporting a healthy gain of 20 percent in the second quarter alone — not every form of advertising is enjoying such success. In fact, as economic troubles continue, more and more advertisers are only willing to spend money on search ads and are increasingly ignoring other forms of advertising.

According to eMarketer, search ad spending will reach $10.4 billion this year, more than twice as much as advertisers will spend on display ads. More importantly for Google, search ads will represent 42 percent of all advertising spending, while display ads will account for just 21 percent of all online advertising.

With an economic downturn running amok, Google is quickly becoming one of the few companies that can actually withstand its onslaught. Because search results currently provide the best place for advertisers to spend money and realize a positive ROI, Google’s control of over 60 percent of the search market becomes even more important.

“We believe that if there were (a U.S. recession), we’ll be well positioned,” Google CEO Eric Schmidt said in a recent earnings call.

Generally speaking, search ads are better targeted than display ads. And in an environment where companies have less money to go around, they need to find the best ways to utilize that cash and speak to the target audience. For now, display advertising will not be the best place to spend ad dollars and although Microsoft and others will do their best to compete, Google is still in the cat bird’s seat.

Just don’t mention DoubleClick.

As we reported March 12, Performics presented a major conflict of interest for Google as the service offered SEO services that were focused on improving site rankings in Google.

Tom Phillips, Director, DoubleClick Integration at Google wrote on the Google Blog:

It’s clear to us that we do not want to be in the search engine marketing business. Maintaining objectivity in both search and advertising is paramount to Google’s mission and core to the trust we ask from our users. For this reason, we plan to sell the Performics search marketing business to a third party. We believe this will allow us to maintain objectivity and the search marketing business to continue to grow and innovate and serve its customers. While we have not yet identified a buyer, we’ve received preliminary interest from a number of our current partners. Search Marketing will continue to run as a separate entity until the division is sold.

Phillips noted that Google will keep the affiliate marketing arm of Performics and integrate it into existing Google services.

DoubleClick’s Performics offers search engine services that include “natural search solutions” such as “link building.” Some highlights from the Performics service

Our experts methodically optimize copy and content for each page to boost page rankings…

Addresses external ranking factors and new business opportunities

Now there is nothing wrong with what Performics offers; SEO and SEM are legitimate businesses. The catch is that Google is now offering paid services that promise improved search engine listings in Google itself, a 100% conflict of interest. Danny Sullivan at Search Engine Land calls for Google to divest itself of Performics, and it’s a call that should be supported.

New York based Eyeblaster offers online campaign management solutions and services to advertising agencies and advertisers. Eyeblaster manages campaigns across digital media channels in multiple formats including rich media, in-stream video, display and search.

Eyeblaster’s major competitors include Google through DoubleClick, and Microsoft with Atlas.

The company was founded in 1999 and has 221 employees in 23 countries with R&D facilities in Israel. The company booked a $7.4 million profit in 2007 on revenue of $44.7 million from 979 customers.

(via CNN)

One company petitioning against the acquisition is Microsoft. The NY Times has a copy of a leaked Microsoft document here (.doc) that details in dot points the case against the acquisition. One choice quote:

By acquiring the dominant provider of ad-serving tools that publishers use to manage and make their inventory available to advertisers, Google will force other online ad networks to build and market their own ad-serving tools. Unless and until Google’s competitors are able to obtain access to competitively neutral and unbiased ad-serving tools like those currently provided by DoubleClick, the ability of Google’s rivals to create viable alternative pipelines will be very difficult, if possible at all. Moreover, by the time competitors are able to assemble their own pipelines, given the network economics that characterize online advertising, Google likely will have obtained in non-search advertising the same unbeatable market position that it now enjoys in search advertising.

And then there’s the Powerpoint slides. Here’s Microsoft’s case in pictures:

As Erick previously noted: “The European Commission won’t bow out so easily.” The EU has a much stronger track record against anti-competitive behavior that the FTC has under the Bush Administration, and with Microsoft spending time and money lobbying against the deal it would a brave person who bets that Google is assured of getting unconditional approval for the acquisition.

(slides via Slashdot)

Third party ad serving markets are highly competitive. [No argument there].

Privacy not a part of the merger review. [You lucked out, boys].

Data combination wouldn’t pose problems. [That means Google won't be hobbled by any separate-but-equal clauses keeping Google and DoubleClick data apart, which would have probably squirreled the deal].

Advertisers and publishers aren’t concerned. [Well, at least not enough to complain publicly about it to the FTC].

Now that the U.S. is cleared, Google still has its toughest hurdle ahead. The European Commission won’t bow out so easily. It could very well delay a decision until April. (Those Old World regulators like to take things at an Old World pace). In the meantime, Microsoft will keep trying to steal away more business from DoubleClick, as it did yesterday with its Viacom deal. Oh, and it will be spending a lot of time lobbying its good friends at the EC as well. The longer the delay, the more Microsoft can use that time to try to catch up. But come April, DoubleGoog will start to punch back.

The FTC has been investigating the acquisition on competition grounds since it was first announced in April. A number of high profile respondents argued against the acquisition, including AT&T and Microsoft, and in July Scott Cleland of telecom research group Prescursor presented a strong case arguing against the merger.

At the time we noted:

The FTC has acted against anti-competitive behavior in the tech industry before (most notably with Microsoft), however the FTC under the Bush Administration has become far more laissez faire towards business practices than it was in the past. It won’t be all clear sailing for Google, but given recent history it would be surprising if the FTC did block Google’s DoubleClick acquisition.

The acquisition has already been cleared by authorities in Australia, but still faces regulatory review in Europe.

Truth be told, that is precisely what Google is hoping for, although it must say the exact opposite to try to get the deal past regulators. Google CEO Eric Schmidt is crying that all of his rivals’ advertising deals (Microsoft-aQuantive, Yahoo-Right Media/BlueLithium, AOL-Tacoda/Quigo) have already been approved or face no similar scrutiny. But that misses the whole point of an antitrust review: to prevent the concentration of too much market power in any one company.

Those other deals don’t threaten to cement any one company’s market dominance, as the DoubleClick deal arguably does. (This must be the only time Steve Balmer is tickled that Google is being treated like the new Microsoft). There are also related privacy concerns, as tracking consumers across sites with ad cookies becomes the industry norm, but that is beyond the official purview of the European Commission.

In the U.S., the Federal Trade Commission has yet to approve the deal as well. But historically, it has been the European Commission that has always been tougher in approving big mergers because it doesn’t have as much enforcement teeth after a deal is already consummated. Its biggest influence (in terms of being able to squash a deal) is always at the initial approval stage, when it has to basically guess what the future may hold. In a sense, it is a futile exercise.

While search and display advertising may make up the bulk of online advertising today (40 percent and 22 percent, respectively, according to the Interactive Advertising Bureau), who is to say that social ads or some other as-yet-to-be invented form of digital advertising won’t sweep the world and make the DoubleClick deal irrelevant? In all likelihood, the deal will go through with the European Commission demanding a set of tough, but ultimately misguided, concessions.

Are there concessions it should demand that would make sense and promote a more competitive digital advertising market? Or should it just stop holding Google back and let the market decide who to reward and who to punish? Comments are open.

“Publishers are starting to see mobile as an exciting revenue growth area as budgets move from experimental to mainstream. Our clients want to take on this opportunity and sell mobile display advertising directly,” said Ari Paparo, DoubleClick’s vice president of rich media and emerging technologies. “As media companies begin to offer integrated digital ad packages to advertisers that include online display, rich media, video and mobile, everyone wins. The launch of DoubleClick Mobile marks an important step in bringing mobile into the mainstream digital advertising ecosystem.”

Interesting this comes just a week after Google opened up publisher enrollment for its AdSense for Mobile Program. Of course Google purchased DoubleClick earlier this year, so there is the possibility of integration between the two systems, but for now DoubleClick has said very little about Google’s AdSense for Mobile program. In fact, at this point the biggest competitor in the WAP space for DoubleClick could likely be aQuative’s Atlas division, which is currently owned by Microsoft.

DoubleClick Mobile could also change the way ads are viewed. But not by those who see them as potential buyers, but rather by those who produce them. As part of DoubleClick’s DART for Publishers (DFP) platform, DoubleClick Mobile will allow everyone involved in managing digital ad camps a way of tracking the results. This includes those from the ad staff to traffickers and even metrics analysts. Soon we’ll see how “targeted” a targeted ad campaign really is, and whether the results paid off.

DoubleClick

With DoubleClick, Google would have additional clout in the world of advertising. Combining its methods of collecting personal data about you, it would then also be able to serve traditional banner and newer flash video ads thanks to DoubleClick. That’s what scares people.

I’m not exactly one of those “Google is teh devil!!1″ people yet, but federal investigations don’t automatically mean someone is guilty. After all, if the movie Syriana is to be believed, then such an investigation could have just been launched to give the impression of due diligence. Though I guess it’s pretty safe to say Google isn’t exactly the Internet darling (to the Slashdot-type crowd) that it used to be, $8 zillion stock price notwithstanding.

Google Deal Said to Bring U.S. Scrutiny [New York Times]

DoubleClick was founded in 1996. DoubleClick was taken private in 2005 by Hellman & Friedman and JMI Equity for $1.1 billion. The New York Times is reporting that DoubleClicks revenues are about $300 million/year.

10x revenue for a mature company is a…healthy…valuation. At least part of the acquisition price appears to be due to a desire by Google to keep this asset out of Microsoft’s hands.