Google Rivals Up in Arms Over News of DoubleClick Buy

Following Google’s announcement Friday that it is acquiring online advertising company DoubleClick, its Internet and media rivals began urging regulators to scrutinize the US$3.1 billion deal.

Microsoft, itself no stranger to competitive complaints both in the United States and abroad, issued a statement featuring the comments of Brad Smith, its senior vice president and general counsel.

“This proposed acquisition raises serious competition and privacy concerns in that it gives the Google-DoubleClick combination unprecedented control in the delivery of online advertising, and access to a huge amount of consumer information by tracking what customers do online,” Smith said. “We think this merger deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market.”

Suggesting Scrutiny

Microsoft was also a DoubleClick suitor, as were Yahoo and Time Warner. By winning the Internet ad supplier, Google has secured a top spot as the leading advertising business on the Internet. It has also raised the specter of an Internet advertising monopoly among the companies with which it competes.

“It’s critical that this merger be stringently reviewed by regulators,” said Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs. “Google is acquiring its only substantial competitor, thereby positioning itself as the sole broker of Internet advertising. This merger has implications for any business, large or small, that does business on the Internet because it will allow Google to pick winners and losers in the Internet ad space.”

A Yahoo spokesperson declined to comment specifically on any monopoly concerns. Time Warner could not be reached for comment.

A Game of Monopoly

“This is a case of the rich getting richer and the strong getting stronger,” Yankee Group analyst Laura DiDio told the E-Commerce Times. “Google has been on a run. Now people are starting to look at it as a monopoly in the making.”

Google is, in fact, much like a winning player in a “real-life, high-stakes game of high-tech Monopoly,” DiDio added. “They’ve got Boardwalk and Park Place, and they’re going for the railroads and utilities. They’ve got money, and they’re spending it.”

The fact that Microsoft is among the first to protest is ironic, she noted.

“It is the height of irony,” DiDio said. “This is the first time that Microsoft, which has been a target numerous times, has leveled the charge against someone else. I guess the quote has to be, ‘It takes one to know one.'”

However, overall, these protests may just be the beginning. “We’re going to see a bare-knuckles brawl here, and this is the first salvo,” she stated. “The real question is: Can anything rain on the Google parade?”

Working for Google

Google’s move was expected, Rob Enderle, president and principal analyst at Enderle Group, told the E-Commerce Times. “We saw this coming. … Google is attempting to create a monopoly at a very high level in the advertising food chain.”

If Google is the dominant player in Internet advertising, then rivals such as Microsoft and AT&T, whose revenues depend on advertising, “could find themselves working for Google,” Enderle noted.

Of course, whether the union is found by the Department of Justice or Federal Trade Commission to constitute an illegal monopoly is another question. “It is the formation of what appears to be a monopoly,” Enderle said. “But only monopolies that reduce choice for customers, or put customers at risk, are illegal.”

“There are corporate risks here, but the FTC may have trouble any seeing harm to the user. It’s a little more difficult to pick one side over the other,” he added.