Google’s DoubleClick Acquisition Will Threaten Rivalry & Privacy - Microsoft

Google and DoubleClick
Washington: Microsoft has urged a US Senate group to go up against Google’s acquisition of online ad targeting giant DoubleClick, arguing that the 3.1 billion dollar threatens rivalry and confidentiality.

Microsoft general counsel Brad Smith condemned the pending Google-DoubleClick contract during an antitrust inquiry headed by a legislator who admonished the acquirement deserves close assessment.

“If Google and DoubleClick are allowed to merge, Google will become the overwhelmingly dominant pipeline for all forms of online advertising,” Smith told Senator Herb Kohl, chairman of antitrust subcommittee, at a hearing.

"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," Smith said.

David Drummond, Google chief legal officer defended the agreement, anticipating that the world’s top Internet search engine and DoubleClick were balancing business frms and not rivals.

Drummond testified, “We are confident, and numerous independent analysts have agreed, that our purchase of DoubleClick does not raise antitrust issues.”

“The simplest way to look at this is by way of analogy. DoubleClick is to Google what FedEx or UPS is to Amazon.com,” Drummond said, referring to the main US package delivery companies and the popular retail website.

Drummond said while buying DoubleClick will aid Google perk up sales of display advertisements it will not block up other companies from contending.

Drummond noticed that competitors including Yahoo, Microsoft and America Online also signed up agreements recently to get hold of ad-specialty firms.

Microsoft has decided to pay around six billion dollars for ad-targeting company aQuantive and Yahoo paid 680 million dollars to obtain the reins of Internet ad broker Right Media.

Recently AOL purchased ad-serving companies ADTECH and TACODA that specializes in behavioral targeting of online advertisements.

Internet rights counselors and the president of technology market research firm Precursor coupled Microsoft in turning legislators to make use of their influence with federal regulators to end Google from finishing the DoubleClick purchase.

US senators do not have the power to block up the transaction but can sway antitrust representatives at the Federal Trade Commission that is investigating whether Google would get inequitable marketplace clout by owning up DoubleClick.

Google has asked EU governors to evaluate and approve the DoubleClick transaction.

Kohl said, “This merger and the ongoing consolidation in the Internet advertising industry as a whole raises important issues of consumer privacy. Google collects an enormous amount of information on computer users' search history and Internet preferences.”

In a practice common in the industry, DoubleClick installs software bits referred to as "cookies" on Internet users' computers to track where they go online and what pages they view.

Privacy lawyers fear that Google and DoubleClick would be capable of merging their grand databases about people’s Internet activities.

“This merger review is a watershed moment for internet competition. I believe Google-DoubleClick is clearly one of the most far-reaching, least-understood and important mergers this subcommittee has ever reviewed,” Precursor president Scott Cleland testified at the hearing.

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