Could Google-DoubleClick Merger be Halted? - Senate's Antitrust Concerns about GoogleClick
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What will happen when Google's user data about search and DoubleClick's user data are merged? That seems to be everyone's biggest concern, especially in light of the company's privacy policies. Google recently bowed to pressure from the European community to change its data retention period to 18 months rather than indefinitely, but that has done little in the way of calming anyone's fears.
Microsoft, not surprisingly, opposes the merger. Brad Smith, the software giant's General Counsel, noted that "This merger will almost certainly result in higher profits for the operator of the dominant advertising pipeline, but it will be bad for everyone else. It will be bad for publishers, bad for advertisers, and most importantly, bad for consumers." He was one of five witnesses who spoke before the Senate subcommittee hearing.
To be sure, safeguarding consumer privacy was hardly the only issue on the minds of the senators at the hearing. In his opening remarks, subcommittee chairman Herb Kohl (D-Wisconsin) observed that "The total amount of merger activity in the industry exceeds $30 billion this year, creating profound consequences for all who use the 'net and all who sell products and services using the 'net. The leading company placing Internet display ads is DoubleClick...In less than a decade Google has become universally known as the best, fastest way of searching the Internet...Once these two companies have joined forces, will the barrier for a new entrant to the marketplace simply be too high? Or will the likely benefit outweigh the potential damage?"
David Drummond, Google's chief legal officer, addressed the antitrust issue at the hearing. "The acquisition does not raise antitrust issues, because DoubleClick is not our most significant competitor," he said. "Google is in the business of selling advertising. DoubleClick does not buy ads or sell ads -- it provides tools that enable pubs [online publishers] to deliver ads -- they don't compete."
Microsoft disagreed, and so did Internet business expert Scott Cleland, founder of Precursor and author of a white paper entitled "Googleopoly." Cleland pointed out that "They do compete, because it's about how ads get served to a screen. Google serves those screens with text and contextual ads and DoubleClick serves them in banner or video -- but it's the exact same function that serves ones and zeroes through a network. These are interrelated markets and they compete for the same ad dollars. It's like someone saying since my eye and ear are separate they don't have any interaction with my brain."
Next: Microsoft's Self-Interest >>
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