US Regulators OK Google-DoubleClick Deal
http://biz.yahoo.com/ap/071220/googl...rust.html?.v=8

FTC Clears Google's $3.1 Billion Purchase of DoubleClick; Deal Still
Faces Scrutiny in Europe

WASHINGTON (AP) -- With U.S. antitrust clearance for its DoubleClick
purchase, Google's focus now turns to European regulators, who are
expected to be more critical of the top search engine linking up with a
market leader in online advertising.

The proposed $3.1 billion transaction, which is strongly opposed by
privacy advocates, cannot be completed without approval from the
European Commission, whose review deadline is April 2.

The Federal Trade Commission said that the deal won't significantly
lessen competition in the online advertising market, rebuffing
complaints from Microsoft Corp. and AT&T Inc. that it would give Google
a dominant position.

"The FTC's strong support sends a clear message: this acquisition poses
no risk to competition and will benefit consumers," Eric Schmidt, Google
Inc.'s chief executive, said. "We hope that the European Commission will
soon reach the same conclusion."

The European Commission declined to comment on the FTC's decision,
spokesman Jonathan Todd said.

The FTC's approval of the deal without conditions could push European
regulators to take a tougher line, says Rebecca Arbogast, an analyst at
Stifel Nicolaus.

For example, they could restrict the ability of the two companies to
share the market data they collect or require the combined company to
sell off certain assets, analysts have said.

But Arbogast believes Europe will ultimately approve the deal, noting
that Google could benefit from the fact that Microsoft has had
significant antitrust problems in the EU.

"With enemies like Microsoft, you don't need friends when you're in
Europe," Arbogast said.

In addition to selling text ads on its own Web site, Google acts as an
intermediary, selling ads through its AdSense network to thousands of
online publishers, from small Web sites such as AsktheBuilder.com to
large media companies like the New York Times Co.

DoubleClick Inc., meanwhile, helps publishers place and track display
ads. Oppenheimer & Co. says DoubleClick, with 40 percent market share,
is the leader in display advertising technology and services.

Microsoft and other critics argue the deal would enable Google to
dominate two aspects of the Internet advertising market -- ad sales and
ad-serving tools.

The FTC said in a report on its investigation that both the online ad
sales and ad-serving markets have numerous competitors, several of which
have been bolstered by recent acquisitions.

Those include Microsoft's $6 billion purchase of DoubleClick rival
aQuantive, the acquisition of online advertising provider Tacoda by Time
Warner Inc.'s AOL, and Yahoo Inc.'s purchase of Internet advertising
exchange Right Media Inc. for $680 million.

Other competitors include ValueClick Inc. and 24/7 Real Media, which was
purchased by London-based advertising giant WPP Group PLC for $649
million in May, the FTC said.

Privacy advocates say the combined company will have access to a huge
amount of data on individual Web-surfing habits. The FTC said it lacked
the legal authority to block the deal on any grounds except on antitrust
matters.

However, in an apparent nod to these concerns, the FTC on Thursday
proposed a set of privacy guidelines for the online advertising
industry, describing them as something that "clearly transcend" the
Google-DoubleClick deal. It remains to be seen how such guidelines would
be enforced.

Privacy advocates were not assuaged.

The FTC "sidestepped its responsibility today when it approved the
merger of two companies whose new, extended data-collection reach will
give it unprecedented access to track our every move throughout the
digital landscape," Jeffrey Chester, executive director of the Center
for Digital Democracy, said. The CDD and the Electronic Privacy
Information Center fought the deal on privacy grounds.

The five-member commission voted 4-1 in favor of the deal. Commissioner
Pamela Jones Harbour dissented "because I make alternate predictions
about where this market is heading, and the transformative role the
combined Google/DoubleClick will play if the proposed acquisition is
consummated."

Online ad spending is projected to reach $21.4 billion this year,
according to research group eMarketer, surpassing the $20.5 billion
radio advertising market for the first time. EMarketer expects online ad
spending to nearly double to $42 billion in 2011.

Shares of Google added $12.32, or 1.8 percent, to close at $689.69 Thursday.