WebProNews - Google, DoubleClick On Defense Against Senators
September 29, 2007
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Google, DoubleClick On Defense Against Senators
David A. Utter | Staff Writer

The main defense put forth by Google and supporters of its proposed
acquisition of DoubleClick holds that the two companies do business
differently when it comes to advertising.

One company sells ads, one delivers them. In a nutshell, that's
Google's view of the DoubleClick deal, and there isn't any reason
for people to be so fired up about it.

In testimony before a Senate Judiciary subcommittee, Google and its
main DoubleClick detractor, Microsoft, fenced over the subtleties
of that characterization. The Los Angeles Times noted how the tech
companies resorted to analogies to help less tech-savvy Senators
understand what is taking place. Google's David Drummond and
Microsoft's Brad Smith quibbled over the choice of analogy:

"Google is to DoubleClick what, say, Amazon is to FedEx,"
Drummond said. "Amazon sells books. FedEx delivers them. And by
analogy, we sell ads, DoubleClick delivers ads. Two different
businesses."

"I think a better analogy is this: Google is already Amazon
and is already FedEx," (Smith) said. "Now, they're proposing to
buy the post office."


Those who participate in Google's AdSense Network may be surprised
to learn that Google isn't in the ad-delivery business, especially
since AdSense does exactly that.

Drummond acknowledged Google does serve some ads; as Smith
demonstrated to the Subcommittee, Google does serve display
advertising in the form of image ads on AdSense units.

Buying DoubleClick will let Google reach beyond its AdSense
partners to hit the screens of more Internet users. Microsoft
wanted DoubleClick for the same reason, but was rebuffed in its
advances on the company.

As far as the antitrust implications of Google's purchase, the
Federal Trade Commission will have the final say on that. The group
likely listens to suggestions from its friends in the legislative
branch, so Senators who feel strongly about the merger may be able
to influence the FTC's decision making.

In addition to the two top lawyers from Google and Microsoft, the
Subcommittee took in other testimony. Thomas Lenard of the Progress
& Freedom Foundation suggested that government interference with the
evolving online market posed more of a consumer threat than a Google
and DoubleClick merger.

Lenard echoed Drummond's point about Google and DoubleClick being in
two different businesses, ad sales and ad delivery. "The firms will
not gain any market power from this merger since they do not have
any business in common," he said.

Precursor's Scott Cleland submitted 64 pages of testimony against
the deal. He sees it as "a de facto end-run around media ownership
limits," saying that while laws limit TV, cable, radio, and
newspapers in their reach, a Google-DoubleClick deal would reach
90 percent of the global online media audience.

"If a business wants its content to succeed on the Internet, it
would have no choice but to use the Google-DoubleClick-YouTube
online advertising platform," said Cleland. "No real competitive
choice."