Google made one of the most high-profile
advertising acquisitions of the year when it agreed to purchase advertising
leader DoubleClick for a total of $3.1 billion USD. Now the deal is ready
to be finalized, having received official FTC approval late last week.
The Federal Trade Commission had been mulling over the acquisition for
months. There was an antitrust
investigation into if the acquisition would kill competition in the online
advertising market. In the end, the FTC voted 4-1 to end the
investigation and tentatively
approve the deal, agreeing to keep a watchful eye on Google.
The FTC feels that, despite the fact that the acquisition may radically alter
the market; there is no real evidence that it will destroy competition in the
However, one FTC Commissioner acknowledged that the situation is really
entirely unpredictable, stating, "The markets within
the online advertising space continue to quickly evolve, and predicting their
future course is not a simple task."
The FTC was largely unconcerned about privacy fears of consolidation of
information resulting from the deal. The Commission pointed out that
these are very real concerns, but are no more applicable to this particular
deal than the market in general. It did propose behavioral marketing
guidelines to protect users' privacy.
Commisioner Harbour released
a dissenting statement (PDF), which can be found here. Harbour dissented
because he felt Google and DoubleClick are or will soon be competitors in
several markets, and a merger would be tantamount to quelling
Key criteria for FTC approval of mergers is that the businesses involved are
not competitors, as dictated by federal horizontal
merger guidelines. The FTC's majority decided that Google and DoubleClick
are not, in fact, direct competitors in any major market.
The FTC also pointed out that DoubleClick by no means had a monopoly on
internet advertising, so exclusive bundling -- a typical anti-competitive
process -- was less of a threat.
Google's acquisition of DoubleClick is expected to put some heat on internet
advertising and service competitors Microsoft, which recently acquired aQuantive
for $6 billion USD, and Yahoo, which acquired advertiser BlueLithium
for $300 million USD and Right
Media for $680 million USD.