Google, DoubleClick On Defense Against Senators
The main defense put forth by Google and supporters of its proposed acquisition of DoubleClick holds that the two companies do business differently when it comes to advertising.
|Google, DoubleClick On Defense Against Senators|
One company sells ads, one delivers them. In a nutshell, that’s Google’s view of the DoubleClick deal, and there isn’t any reason for people to be so fired up about it.
In testimony before a Senate Judiciary subcommittee, Google and its main DoubleClick detractor, Microsoft, fenced over the subtleties of that characterization. The Los Angeles Times noted how the tech companies resorted to analogies to help less tech-savvy Senators understand what is taking place. Google’s David Drummond and Microsoft’s Brad Smith quibbled over the choice of analogy:
“Google is to DoubleClick what, say, Amazon is to FedEx,” Drummond said. “Amazon sells books. FedEx delivers them. And by analogy, we sell ads, DoubleClick delivers ads. Two different businesses.”
“I think a better analogy is this: Google is already Amazon and is already FedEx,” (Smith) said. “Now, they’re proposing to buy the post office.”
Those who participate in Google’s AdSense Network may be surprised to learn that Google isn’t in the ad-delivery business, especially since AdSense does exactly that.
Drummond acknowledged Google does serve some ads; as Smith demonstrated to the Subcommittee, Google does serve display advertising in the form of image ads on AdSense units.
Buying DoubleClick will let Google reach beyond its AdSense partners to hit the screens of more Internet users. Microsoft wanted DoubleClick for the same reason, but was rebuffed in its advances on the company.
As far as the antitrust implications of Google’s purchase, the Federal Trade Commission will have the final say on that. The group likely listens to suggestions from its friends in the legislative branch, so Senators who feel strongly about the merger may be able to influence the FTC’s decision making.
In addition to the two top lawyers from Google and Microsoft, the Subcommittee took in other testimony. Thomas Lenard of the Progress & Freedom Foundation suggested that government interference with the evolving online market posed more of a consumer threat than a Google and DoubleClick merger.
Lenard echoed Drummond’s point about Google and DoubleClick being in two different businesses, ad sales and ad delivery. “The firms will not gain any market power from this merger since they do not have any business in common,” he said.
Precursor’s Scott Cleland submitted 64 pages of testimony against the deal. He sees it as “a de facto end-run around media ownership limits,” saying that while laws limit TV, cable, radio, and newspapers in their reach, a Google-DoubleClick deal would reach 90 percent of the global online media audience.
“If a business wants its content to succeed on the Internet, it would have no choice but to use the Google-DoubleClick-YouTube online advertising platform,” said Cleland. “No real competitive choice.”