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Tickers in this Article: AMZN, AQNT, MNI, TFSM, YHOO, GOOG, TRB, GCI
Advertising is tricky business, and it's become even more so with the rise of the internet.

Early last week, advertising stocks began to see some movement after Google (NYSE: GOOG) said it would acquire internet-advertiser Doubleclick for $3.1 billion... a hefty sum by most standards.

Doubleclick Acquisition Important for Google
However, perhaps the huge price tag had more to do with Google wanting to control its competitors, than actually needing Doubleclick's vast network of display ads.

The internet advertising arena could be entering a new era of merger activity. I'd be surprised if Google's move doesn't spark further consolidation.

There's been talk that Google's acquisition of Doubleclick violates antitrust laws, but, more than likely, nothing significant will be made of it.

Yahoo! (NYSE: YHOO) and Amazon (NYSE: AMZN) are both lobbying for internet ads and sales, and thus are probably the most likely candidates to announce future buy outs.

Buy Out Targets
The question is, who are they going to buy? Here's the short list: Aquantive (NYSE: AQNT), 24/7 Real Media and McClatchy Co. (NYSE: MNI).

McClatchy Co. is probably No.1 on the list, mostly due to its depressed stock price. The company is a old-world newspaper publisher, but has been working hard to come back to profitability via the internet. Also, McClatchy just announced that it is defecting from an internet-advertising pact with Gannet (NYSE: GCI) and Tribune (NYSE: TRB) to join another group of publishers who have better ties with Yahoo. What's more, by buying McClatchy, Yahoo or Amazon would also gain control of it's stake in the help-wanted site Careerbuilder.com.


By The Numbers
McClatchy has had a tough run over the past few years, but the company is expected to come back to profitability in the next quarter or two, which means its decently valued at current levels. In fact, the stock is trading with a forward P/E of just under 14, 1.56 times sales, and with a very exciting 0.84 times book. It also pays a fairly significant dividend of $1.24, a 2.1% dividend yield. (For further reading, see Understanding The P/E Ratio.)

Although M&A activity is hard to predict, it appears that McClatchy could be a target very soon.

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