Google’s planned $3.1bn acquisition of DoubleClick ran into a storm of complaints on Sunday. Some of the companies biggest rivals claims the deal would create an advertising behemoth with the power to dictate terms to online publishers and service providers.
The wave of protest included the first time that Microsoft, itself long a target of anti-trust scrutiny, has levelled a charge of anti-competitive behaviour against its new arch-rival.
Between them, Google and DoubleClick account for “over 80 per cent of the adverts delivered to website publishers, so their combination in a single company has big ramifications,” Brad Smith, Microsoft’s general counsel, said on Sunday.
AT&T, which has ambitious plans to take on the cable providers with a push into video delivered over the internet, said that any company that looked to online advertising for a significant part of its revenue could suffer if the deal went through.
“To the extent that they are the broker of advertising for anything moving on the internet, we would be forced to deal with Google on Google’s terms,” said Jim Cicconi, head of external and legislative affairs at AT&T. Small internet companies in particular could be vulnerable, since “Google would be in a position to pick winners and losers,” he added.
Yahoo and AOL had also expressed similar concerns over the weekend, according to one person involved in the discussions, though neither they nor Google could be contacted immediately for comment. On Friday, as it unveiled its all-cash deal for DoubleClick, Google executives said they were confident the combination would pass anti-trust reviews. Both the Department of Justice in the US and European regulators will have to clear the transaction.
At issue is the proposed union of Google’s AdSense network, through which it delivers contextually relevant text ads to other Websites, and DoubleClick’s system for placing display ads, which one rival estimated was responsible for brokering 85 per cent of such advertising.
On Friday, Google executives themselves used the fact that it would unite the internet’s two biggest ad networks to justify the high price of the deal. The proposed acquisition was widely seen as a coup for the company against Microsoft and Yahoo, both of which were also involved in the bidding to try to buy DoubleClick.
Google’s gambit also showed signs of drawing complaints over its potential impact on online privacy. In one side-effect of the deal, Google said it would for the first start to “tag” its users, or add identifying cookies to their machines, an approach that would “increase the relevance of ads online.” In the past, it said it hadn’t followed this practice “because we could not guarantee the quality of the ad,” but added that working with DoubleClick it would be able to overcome this.
Besides prompting complaints about privacy, collecting more information about users would also add to the anti-competitive nature of the deal, said Mr Smith. Google would have far more personal information on which to base its decisions about advertising placement, making it difficult for rivals to compete, he added.
.

COMPANIES 
