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March 11, 2008

The EU Approves Google’s DoubleClick Deal. Yahoo Needs To Pick a Partner Fast.

Erick Schonfeld

31 comments »

The last barrier to Google’s year-long quest to buy DoubleClick has been removed. The European Union’s antitrust regulator has approved the $3.1 billion deal “without conditions.” Word of the impending approval got out last week.

Now Google can move seriously into the part of the online advertising business it doesn’t control: display ads. The vigorous objections of Google’s competitors Microsoft and Yahoo may have delayed the approval, but ultimately the European Commission didn’t buy the arguments.

Interestingly, the commission seemed to ignore the possibility of Microsoft buying Yahoo, or Yahoo merging with AOL. According to CNNMoney:

The commission said it found the merged entity would not have the ability to engage in strategies aimed at marginalising Google’s competitors, mainly because of the presence of credible ad serving alternatives to which customers can switch, in particular vertically integrated companies such as Microsoft Corp , Yahoo! Inc, and Time Warner’s AOL.

But what happens when those credible alternatives go through their own consolidation in reaction to the Google-DoubelClick combination? Whether Yahoo merges with Microsoft or AOL, there will soon be one less major competitor. It seems odd that the European Commission would not take that into consideration, even if any such deal remains uncertain.

Yahoo had better decide quickly what it wants to do with its future because its comfortable position as the leader in display advertising is about to come under some major pressure from Google.

Update: A few hours after the EU approved the deal, Google CEO Eric Schmidt announced that the acquisition is now complete. That was fast. In his note he hints at headcount reductions that will be in store—a nod to Wall Street, no doubt.

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Comments

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  1. ionix5891

    March 11th, 2008 at 7:15 am

    Google are now officially evil

  2. YDRIVE

    March 11th, 2008 at 7:18 am

    Not unreasonable approval.

  3. Jesus H Christ

    March 11th, 2008 at 7:49 am

    When do you think we will see double fully integrated into adsense ?

  4. Nina Hartley

    March 11th, 2008 at 7:56 am

    I bet they already were working on integration….I’d say we see integration in under a month.

  5. Vitas

    March 11th, 2008 at 7:57 am

    Microsoft just offered $2B for Doubleclick before Google bought it for $3.1B. That is monopoly i think. Google want to get all possible traffic. There is big war between google and microsoft.

  6. Carsten Reinke

    March 11th, 2008 at 7:59 am

    Yahoo Publisher Network and Microsoft Adcenter still haven’t fully reached Europe. For whatever reasons. Small publishers (like me) are craving for their arrival.

    Meanwhile Adwords/Adsense gets more and more market share. With this in mind I frankly don’t understand why the deal got approved without conditions…

    (I know display ads and adwords are different, but still…)

  7. YDRIVE

    March 11th, 2008 at 8:04 am

    Yahoo! really needs to relax the YPN signup process, at least should be no more complications than AdSense.

  8. Chris

    March 11th, 2008 at 8:08 am

    @YDrive, I agree

    There is still not a self service publisher solution offered by any of the major players other than Google. Someone should create this, or buy something like AdBrite to pick up on this need.

  9. Bob M

    March 11th, 2008 at 8:14 am

    Guys, what Google is doing is no different then what Microsoft did when they tried to kill Netscape. Destroy the other company. MS did it to Netscape. I do not think that Google can do it to MS but they can dent it a bit. Unless MS tries another Netscape against Google (something I do not think they can do anymore).

  10. Nina Hartley

    March 11th, 2008 at 8:22 am

    Ever use MSN Adcenter?

    it is a bad…really bad….all they had to do was take the best of Google..and the best of Yahoo! and they would have a great product…..

  11. The Googlopoly Has Come

    March 11th, 2008 at 8:31 am

    Yup. Googlopoly.

    About 3 quarters of ALL online ads will be Google-owned now.
    Great…

    This just put another nail in Yahoo’s coffin. They simply MUST sell to Microsoft, Congress and the EU won’t let them outsource their search and search ads to Google now, and News Corp just walked away. It’s game over.

    There simply HAS to be someone left standing to compete (even if it’s a weak competitor) with the Googlopoly.

  12. Widgity

    March 11th, 2008 at 8:35 am

    BTW - Googlopoly (c) 2008, Widgity.com

    :-)

  13. I Am Not Posting To Spam My Blog

    March 11th, 2008 at 8:38 am

    Right decision. Competition regulation is only remotely justified where there’s an inherent monopoly. By which I mean something like rail networks, where it’s completely impractical to build a second competing network alongside the existing one so the barriers to entry are unscalably high. Internet advertising doesn’t fit that definition by any stretch of the imagination.

    Competition in business is not like competition in sports. It’s easy to be deluded on this point since business journalists have been emulating sports journalists in their coverage for decades. But whereas in sports you always want the teams to be as equal as possible to make it exciting - if Manchester United are always 1st in the league, it gets boring - there is no reason why this has to be the case with business.

  14. The Googlopoly Has Come

    March 11th, 2008 at 9:00 am

    It’s OK #13, that was me with the longer post/Googlopoly first. (i.e. not spamming)

  15. The Googlopoly Has Come

    March 11th, 2008 at 9:05 am

    True, but rail networks, etc. don’t have access to immense amounts of personal data…and aggregate that to maximize ROI via behavioral advertising, etc.

    It’s a bit more disconcerting to have a Googlopoly in an industry with that much access to private data, than it is when one has only 1 or 2 options for rail travel.

  16. Sandra G

    March 11th, 2008 at 10:14 am

    Good. I’m happy that Google got the approval. If Microsoft bought DoubleClick, I would think they would just kill it. MS can’t innovate anymore. This is just one more step to Yahoo and Microsoft becoming irrelevant.

    I, for one, welcome our Google overlords and would stress my usefulness in rounding up others to toil away in the underground salt mines.

  17. I for one....

    March 11th, 2008 at 11:28 am

    …welcome our ad-serving overlords!

    Long live Adblock plus!

  18. Andy

    March 11th, 2008 at 12:42 pm

    You see Europeans don’t milk every american company to fill its cash reserves (refering to article on Microsoft and European Regulators)

  19. what

    March 11th, 2008 at 12:51 pm

    Google’s informal motto, “Don’t be evil” nolonger fits. Now, its like eating others to survive.

  20. Tony

    March 11th, 2008 at 2:15 pm

    @18

    Nope, they just hate Microsoft for some reason

  21. Forumistan

    March 11th, 2008 at 4:46 pm

    Google is an evil.

  22. Isaac

    March 11th, 2008 at 8:35 pm

    What will Y! do??? Y! stock is going to slip…

  23. lazysupper

    March 12th, 2008 at 6:14 pm

    Finally people are starting to notice.
    Some of us been sayin’ it for years. ;P
    All hail the Googlepire

  24. Rel

    March 26th, 2008 at 4:41 am

    lets be realistic, they couldn’t exactly refuse Google. Google already have a monopoly! Its a bit too late for that! They are in cahoots with the governments.

    And yes, Google is now evil, however still a source of income. Conflicting morals and will to earn money. But hey, supermarkets…

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