Will The FTC Block Google’s Acquisition Of DoubleClick?

24 Comments

by Duncan Riley on July 17, 2007

Scott Cleland, an analyst at the Washington, D.C. based telecom research group Prescursor has published a 35 page paper “Googleopoly: the Google-DoubleClick Anti-Competitive Case”. The paper argues that the US Federal Trade Commission will block Google’s $3.5 billion acquisition of DoubleClick on the basis that it will allow “Google to dominate online advertising and dramatically increase the opportunity for market collusion and price manipulation in the market for consumer click data, ad-performance tools, ad-brokering and ad-exchanges.”

Those interested can read the full report here. The stand out portion of Cleland’s report is how he describes Google dominance of the online advertising market post acquisition:

To equal Google-DoubleClick’s level of market concentration in the intermediary online advertising market, one single financial services company would have to own:

The top 15 Wall Street banks/asset managers;

~60% of the hedge fund and private equity industries;

The New York and London Stock Exchanges;

The two leading providers of financial analytical tools: Bloomberg and Factset;

Two of the three national providers of credit profiles: Experian and Equifax; and

~60% of the Federal Reserve’s and U.S. Census Bureau’s raw market and consumer data.

Cleland’s analysis of Google’s acquisition of DoubleClick though needs some perspective. Cleland is also an anti-net neutrality activist who has backed the position of the existing telecommunications players in testimony to a Congressional hearing; simply as with any analyst or lobbyist, he makes a case that is usually in line with the concerns or beliefs of the industry that backs him. The only real question with this report: who wants Google’s DoubleClick acquisition to fail this badly?

The FTC has acted against anti-competitive behavior in the tech industry before (most notably with Microsoft), however the FTC under the Bush Administration has become far more laissez faire towards business practices than it was in the past. It won’t be all clear sailing for Google, but given recent history it would be surprising if the FTC did block Google’s DoubleClick acquisition.

Comments

Search*Engines WEB - July 17th, 2007 at 10:18 pm PDT

It does not appear likely that the top legal staff working at and for Google would not have examined that very possibility for planning the acquisition.

There would have to be a public outcry or a national and media wave of anti-Google sentiment to cause anything that drastic to happen

At one point a few years ago, Microsoft was acquiring Claria.

homer - July 17th, 2007 at 10:18 pm PDT

This is great. Duncan, your boycott has been officially called off.

Duncan Riley - July 17th, 2007 at 10:22 pm PDT

Thanks Homer…I think

matt - July 17th, 2007 at 11:01 pm PDT

Duncan, I’m with homer, this is good writing and a great story. A+

Dominic - July 17th, 2007 at 11:02 pm PDT

They should block it. GooTube is becoming far too powerful on the web. I remember Microsoft’s offer to buy Intuit. Feds blocked it and I do believe this has monopoly written all over it. They truly do want to control the world’s information, well; them and George Bush.

Have a nice night !

sam madino - July 17th, 2007 at 11:29 pm PDT

They should block Murdoch and WSJ that’s more important to me.

Hosting - July 17th, 2007 at 11:31 pm PDT

Google going the Microsoft way – every which way

gettit - July 18th, 2007 at 12:06 am PDT

I’m glad they won’t block it, and I’d be glad even if it was truly a monopoly. Just because a few people are annoyed (and I don’t like Google), doesn’t make it abusive at all. There’s nothing Google can do to keep competitors out of their space, and if they abuse their position it is people’s responsibility to move to those competitors when they arose.

I don’t know anyone that would believe that the anti-trust case versus Microsoft is the reason they left the platform. It was dissatisfaction. That’s something you can judge without the FTC.

aandarian - July 18th, 2007 at 12:14 am PDT

woohoo Duncan

James - July 18th, 2007 at 12:39 am PDT

Googleopoly, Liveopoly, Yahooploy, Askoploy, Amazoploy, Viacomoploy.

They all want to create bigger internet economy than superbowl, olypmic games, and wealthly middle east oil. News corporation want to buy Dow jones. I think internet web 2.0 create billion dollars and more jobs.

I think milk, oil, and gold is still worthless. I won’t don’t want to buy gold bars or chain. It doesn’t make me rich and look sexy. Gold can’t stop aging.

If I ever have $ 1 million dollar gold pound. I would sell it for 5 dollars.

Joe - July 18th, 2007 at 1:33 am PDT

The possibility of the Bush administration blocking an acquisition on monopolistic grounds is comical. Thanks for the laugh

Josh Catone - July 18th, 2007 at 2:51 am PDT

Now if the FTC does block it, will Microsoft be bummed that DoubleClick is back on the market and they’re stuck with aQuantive?

carmen - July 18th, 2007 at 3:58 am PDT

these people giving money to Google – whoever they are – have chosen them for a reason (biggest distribution, best price etc), otherwise they’d take their business elsewhere. hasn’t anybody heard of capitalism? its not like Google relies on the govt for heavy regulation and support and of their oligopoly **cough-pharma** . the notion that they should be punished for being good at what they do is ludicrous.