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Google Gets Go-Ahead to Buy DoubleClick
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CNBC Silicon Valley Bureau Chief
The Federal Trade Commission will not block Google's $3.1 billion dollar deal to acquire Internet advertising company DoubleClick, capping an 8-month investigation by regulators trying to determine whether such a merger would give the world's biggest search engine too much of a competitive edge in the industry.
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CNBC.com Analysts see Google's move to acquire DoubleClick as a long-term growth play. |
The FTC voted 4 - 1 in favor of the deal, releasing a statement saying, "After carefully reviewing the evidence, we have concluded that Google's proposed acquisition of DoubleClick is unlikely to substantially lessen competition."
Google [GOOG
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] was quick to release a statement of its own Thursday morning: "The FTC's strong support sends a clear message: this acquisition poses no risk to competition and will benefit consumers," said Eric Schmidt, chairman and chief executive of Google.
The FTC fielded a number of complaints from Google competitors, including Microsoft [MSFT
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], Yahoo [YHOO
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] and 24/7 Media [TOFS
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], all of whom went on a multi-billion dollar spending spree soon after the DoubleClick deal was announced, to beef up their own online advertising business to better compete with Google. Analysts have said that those moves likely reduced those companies' abilities to argue successfully against the Google deal since they had taken steps to make themselves more competitive.
Unfurling Banner Ads
Analysts have long heralded Google's play for DoubleClick as key to Google's growth model in 2008 and beyond, since the deal gets Google into a segment of Internet advertising--banner ads--that the company hasn't played in before. That segment of Internet advertising is growing far faster than search advertising, which Google has long dominated.
Another complaint that came up often during the approval process: whether the deal would enable a new, higher level of privacy invasion for Web surfers because of the amount of new data Google would be able to collect. While the FTC didn't address that concern directly, it did release new privacy guidelines it says should help the industry self-regulate any concerns connected to so-called "behavioral advertising," or the tracking of consumer activities online, including searches consumers conduct, the Web pages they visit and the content viewed, in order to deliver targeted ads tailored to a consumer's specific interests.
But it's the FTC's words "self-regulation" that would suggest regulators will entrust the industry to monitor any privacy concerns, rather than take a more active role on the issue.
European regulators are still reviewing the Google-DoubleClick deal. Google released a statement this morning suggesting that the EU should follow the United States' lead to get the deal approved.
"We hope that the European Commission will soon reach the same conclusion, and we are confident that this deal will deliver more relevant ads for consumers, more choices for advertisers, and more opportunities for website publishers," Schmidt said in a statement.
Data is a real-time snapshot *Data is delayed at least 15 minutes
