Commentary

Criteo Could Become Next M&A Target As It Prepares To Launch Search Platform

Criteo is preparing to roll out a search platform this year, although the company has been deemed a potential acquisition target.

Pacific Crest Securities Senior Research Analyst Evan Wilson wrote in a research note that he believes "the most likely acquisition would be Criteo, which has a wide number of potential acquirers and a differentiated data set." The prediction was made in a LinkedIn research note in reference to possible future industry acquisitions.

Criteo, however, has its hands full. The company is preparing to launch a search platform as it looks for marketers to join the team.

During Criteo's first-quarter 2016 earnings report in May, JP Morgan Analyst Doug Anmuth asked the company's CEO, Eric Eichmann, for more details around its search strategy. Eichmann said: "In terms of product innovations, as you know, we are still in proof of concept stage," but said he expects to release more information later this year, "either positive or negative."

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Eichmann said the overall concept of bringing performance to search by using people-based data or browsing remains a top priority, and is very real because it has "potential." Criteo made a name for itself in search retargeting, but began working to build out its platform after acquiring DataPop in February 2015.

A report published in May 2016 by RBC Capital Markets suggests that Criteo exceeded $1.5 billion in ad spend in 2015, "providing search-like ROI for display ads by leveraging direct relationships with advertisers/publishers and user/transaction data."

Search-like ROI for display, per the RBC Capital report, but what if Criteo brought that "search-like ROI for display back into search, similar to the way cClearly Founder Oren Netzer did?

And there's more. Criteo also recently filed a lawsuit against U.S.-based performance marketing competitor SteelHouse, claiming that it undercuts its business and steals potential clients by counterfeiting clicks, which often happens seconds after legitimate clicks are attributed to the France-based company.

"SteelHouse exploited its manipulation of these key performance metrics by falsely advertising that it consistently outperformed Criteo in head-to-head comparisons in order to divert business to SteelHouse,” per one report, citing the lawsuit.

Perhaps the industry must take a wait-and-see approach. More acquisitions and search technology to come -- and some will come from unexpected participants.

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