Google, Microsoft Testify About DoubleClick

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This is the Internet age. We don’t have to wait for general counsels to drop their bon mots before a Senate Judiciary subcommittee, because they are already posted online.

Upon review of the testimony by David Drummond of Google, and Brad Smith of Microsoft, Google thinks its proposed purchase of DoubleClick represents a routine business development, one that isn’t worthy of all the kerfuffle raised by privacy advocates and antitrust regulators.

Microsoft sees it as an anti-competitive move that would be akin to arming polar bears with invisibility cloaks and Desert Eagle .50AE handguns. Competitors, and normal people with privacy concerns, would be the equivalent of newborns left out on the frozen tundra.

"If Google is allowed to proceed with this merger, it will also obtain a dominant gateway position over the other main type of online advertising – non-search ads. Today Google and DoubleClick are the two largest competitors in this area. Combined, Google will account for nearly 80 percent of all spending on non-search ads," Smith said in his remarks about the merger during the hearing.

"We are confident – and numerous independent analysts have agreed – that our purchase of DoubleClick does not raise antitrust issues because of one simple fact: Google and DoubleClick are complementary businesses, and do not compete with each other. DoubleClick does not buy ads, sell ads, or buy or sell advertising space," Drummond remarked in his merger testimony.

As an AP report from the hearing noted, the Senators in attendance cannot block Google’s proposed acquisition of DoubleClick. They can make their views known to antitrust regulators, who do have the power to do so.

Subcommittee chair Senator Herb Kohl thinks the deal "warrants close examination" and wondered if "advertisers and Internet publishers (will) have no choice but to deal with Google, giving Google a stranglehold over Internet advertising and the power to raise ad rates."

A study on the Google-DoubleClick deal released only hours ahead of the hearing suggested Google would be able to effectively raise DoubleClick prices, as DoubleClick advertisers view Google as the next best thing to participating in DoubleClick’s programs.

Google, Microsoft Testify About DoubleClick
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