Google To Sell Performics, Eyes Expedia And Skype

Putting questions about possible conflicts of interest to rest, Google announced Wednesday it will sell search marketing and optimization firm Performics, which it acquired as part of DoubleClick.

The decision comes three weeks after Google's $3.2 billion takeover of online ad service DoubleClick. The sale will enable Google to preserve the trust of its users, according to Tom Phillips, who is overseeing the company's DoubleClick acquisition.

"It's clear to us that we do not want to be in the search engine marketing business," Phillips wrote in a blog on Google's Web site. "Maintaining objectivity in both search and advertising is paramount to Google's mission." Google doesn't have a buyer for Performics yet, but several of the company's business partners already have expressed interest, Phillips wrote.

In other fallout from the DoubleClick deal, Google reportedly is preparing to eliminate about 300 jobs in the biggest purge in the company's nearly 10-year history. The New York Times reported Google's layoff plans on its Web site late Wednesday, citing an unnamed person with direct knowledge of the upcoming cuts.

Meanwhile, travel giant Expedia's shares were up in late-afternoon trading Wednesday amidst rumors that Google was considering acquiring the company. And buzz persists about the search giant's intentions to gobble up eBay's beleaguered Internet chat division, Skype.

Representatives from the trio of companies said they don't comment on rumor or speculation, but that didn't stop investors or the blogosphere from buying into the ideas.

The Expedia buy would make Google a direct competitor of travel portals like Priceline and Orbitz Worldwide--companies that currently use the giant's paid-search platform to advertise their own travel deals. And that would generate a costly conflict of interest, according to industry analysts like The Motley Fool's Rick Aristotle Munarriz. "Sleeping with the enemy is one thing. Paying for its fare and making a rival stronger in the process, is another," Munarriz wrote.

On the other hand, a Skype acquisition would fit right in with the giant's voice-based cross-platform communications strategy, which includes the free GOOG-411 directory assistance service, an existing VoIP service with GTalk, as well as GrandCentral, a phone call management service that Google purchased in 2007 for $50 million.

While Skype has not been a financial success for eBay (with roughly $400 million in revenues in 2007--a drop in the bucket for its parent company), the VoIP provider has surged in popularity, boasting that it currently supports some 10 million users simultaneously at any given time.

Silicon Alley Insider's Henry Blodget argues that with the right engineers and financing (a la brains and budget backed by the Googleplex), Skype would be a valuable acquisition: "Once integrated with Gmail, contacts, etc., Skype would give Google the most complete all around communications platform on the web," Blodget wrote. "Google's global dominance, meanwhile, would provide an awesome distribution platform for Skype. Sounds like a match made in heaven."

The speculation increased amidst the noticeable absence of bigwigs from Google's voice products group--including vice president of product management Salar Kamangar and GrandCentral founders Craig Walker and Vincent Paquet--at Wednesday's CTIA Wireless Conference in Las Vegas. "That doesn't mean the team is busy working on a partnership or acquisition of Skype instead of attending the conference," wrote TechCrunch founder Michael Arrington. "But given that we've heard from sources close to the deal that something is happening between the companies, it's not a stretch, either."

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