I'll admit that I was wrong - very wrong. I didn't think Google would buy Invite Media because I was hearing strong rumours that Google was building in DSP capabilities (including RTB functionality) into DFA. But what can you do. I guess Google thought it was a better strategy to fork out 70 million odd dollars for an existing platform. According to some industry insiders, Invite Media will continue to offer its service to clients, but there will be closer integration with DFA. This purchase does throw up a lot of questions:

a) What do the agencies think of this move now that Google is firmly in the DSP space?
b) Will Google play nice with other platforms, allowing existing Invite users to buy across the multiple inventory sources?
c) Is it really that healthy Google to control large chunks of the display eco-system given that it already owns a publisher ad server, an agency ad server, an exchange and now a DSP?

The debate now is only beginning.

Here's the post by Google's Product Management VP, Neil Mohan, in full:

We’re happy to announce that we’ve acquired Invite Media, an innovative start-up based in New York and Philadelphia.

The team at Invite Media has developed technology that enables advertisers and agencies to use “real time bidding” to buy display ad space, and to optimize display ad campaigns, across multiple advertising exchanges, all in a single interface.

As we’ve regularly said lately, we’re investing significantly in the display advertising ecosystem and are seeing great momentum. We’ve developed, and are continuing to develop, tools that help both publishers and advertisers take advantage of the opportunities that display advertising offers. These investments are really bearing fruit: publishers are getting improved returns from our suite of publisher solutions; and advertisers and agencies are running effective and creative display campaigns with Google across the web.

Real time bidding technology is an important part of this ecosystem. It enables advertisers and agencies to tailor their bids on an impression-by-impression basis, based on their own data, when bidding on websites that choose to make their ad space available through an advertising exchange. Exchanges that enable real time bidding to all, or some, of their buyers include the DoubleClick Ad Exchange, along with a number of other exchange platforms.

For example, using real time bidding, a retailer running a display ad campaign for a shoe sale can bid $5 CPM (cost per 1000 impressions) for ad impressions on a particular news website, but specify that it will bid $10 CPM and show an ad for running shoes if it knows that browser has previously visited the athletics part of its website. Details of the ad impression are passed to the retailer’s bidding platform in real time by the exchange, and the auction takes into account the retailer’s increased bid. This technology lets advertisers and agencies continuously tailor and hone their display ad campaigns, and alter their bids and ads, to reach potential customers they want to attract.

We’re big believers in the benefits and future of this type of display ad buying. But we’re all just at the beginning. It can, and will, be much bigger than it is today, which will benefit the entire ecosystem - advertisers and agencies who can run more effective campaigns, demand-side platforms who offer real-time bidding services to advertisers and agencies, publishers who will get higher prices and more competition for their ad space (while controlling what space they make available, and to whom), and users who will see more useful ads that load faster.

For those who are involved in display advertising, you’ll know that there’s a lot of momentum and buzz in this particular area. In recent months, many agencies and advertisers have been asking us to make a bidding platform available directly to them, as they want to take advantage of the opportunities that real time bidding presents. We’re going to continue to invest significantly in improving Invite Media’s technology and products as a separate platform and, in time, make it work seamlessly with our DoubleClick for Advertisers (DFA) ad serving product. DFA enables advertisers and agencies to effectively plan, target, serve and measure display ad campaigns across the web. Integrating Invite Media’s technology will help DFA’s clients to easily buy ad space across multiple ad exchanges, as part of managing their broader display ad campaigns. Invite Media’s platform will of course continue to be available to any agency or advertiser, whether they use DFA or not.

Invite Media enables ad space to be bought across multiple exchanges and platforms, with its clients in control of where their ad dollars are spent. It’s going to continue that way. Think of Invite Media as just like DFA itself - technology that delivers ads across multiple websites.

One final note about how this fits in with the DoubleClick Ad Exchange. Just as Invite Media works across multiple exchanges, this announcement changes nothing about the operation of the Ad Exchange - it will continue to provide exactly the same open and neutral access to ad space for multiple buyers, partner support and API availability as it has always done.

We’re excited by the huge potential of real-time bidding and display advertising. Together with other participants in the industry, we’re working to help them both grow significantly in the years ahead.