Although it comes as no surprise to industry watchers, the Federal Trade Commission has opened an antitrust investigation to examine Google’s planned $3.1 billion acquisition of online ad company DoubleClick.
Google announced its plans to acquire DoubleClick last month; the New York-based company is one of the longest-standing online ad brokerages; the company was being aggressively courted by both Microsoft and Google, who sought to acquire the company to augment their existing advertising businesses. Google eventually won, with the $3.1 billion deal marking the company’s largest acquisition to date (and making its early $1.6 billion acquisition of YouTube seem like small change in comparison). Google is already a major force in Internet marketing, commanding the bulk of the search advertising market. Adding DoubleClick to its portfolio would enable the company to expand its advertising network beyond its current core strengths.
Privacy groups like the Electronic Privacy Information Center have recommended the merger be blocked by the FTC, saying Google has not established reasonable privacy protection for the information it and DoubleClick collect from Internet users and partner sites. In the dot-com rush of the 1990s, DoubleClick was a frequent target of privacy groups for using browser cookies and other techniques to compile individual profiles of Internet users and attempt to target them with advertising they might find more relevant or appealing. Similar criticisms have been leveled against Google.
Google representatives have indicated they expect the proposed deal will easily clear FTC scrutiny, citing several recent deals by Yahoo and AOL as evidence the online advertising industry is vibrant and offers a combined Google/DoubleClick plenty of competition.
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