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Too Much of a Goog Thing?

Brand-name rivals discuss how loudly they should complain about Google's $3.1 billion offer for DoubleClick.
Felix Salmon
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Last Trade:Change:
Industry:
Technology
Primary executive:
Dr. Eric E. Schmidt, Ph.D.,
Summary:
The Company provides targeted advertising and global internet search solutions as well as intranet solutions via an enterprise search appliance. View More
Last Trade:Change:
Industry:
Technology
Primary executive:
Steven A. Ballmer,
Summary:
The Company develops, manufactures, licenses, and supports a range of software products for many different types of computing devices. View More

Microsoft, itself no stranger to allegations of monopolistic and anticompetitive behavior, is talking with other big technology and media companies about whether they should work together to oppose Google's plan to buy internet advertising agency DoubleClick.

Critics contend that a combined Google and DoubleClick would account for more than 80 percent of the advertising placed with online publishers. A company so dominant would have the power to unilaterally set prices and terms for ad sales, and the ability to squeeze the life out of competitors, they argue.

"To the extent that they are the broker of advertising for anything moving on the internet, we would be forced to deal with Google on Google's terms," Jim Cicconi, head of external and legislative affairs at AT&T, told the Financial Times. He added that a Google-DoubleClick deal would threaten AT&T's plans to deliver video over the internet. Smaller companies would be even more vulnerable, Cicconi said. "Google would be in a position to pick winners and losers."

Similar complaints have come from other big internet companies, notably Viacom, Yahoo and AOL. Executives at several of the companies discussed tactics and strategy by phone over the weekend, the Wall Street Journal reported. Opponents could coordinate their opposition to the $3.1 billion cash deal as American and European competition regulators review it. Many of the critics were unsuccessful bidders for DoubleClick.

Rivals worry a deal would allow Google to extend its lead in "contextual" advertising -- text-only announcements placed next to related search results and other content -- into "display" ads that include photos or illustrations. DoubleClick dominates the market for display ads on the Web, placing as much as 85 percent of them, according to one rival.

Google downplayed antitrust issues when it announced the transaction on Friday: "We do not believe this acquisition is anticompetitive, as it promotes a vibrant, healthy market for online advertising."

The search company's considerable ambition to become a multichannel advertising force will be demonstrated today. Google plans to announce that it has signed a deal to sell advertising on all stations owned by Clear Channel Communications, the No. 1 radio-station owner in the U.S., the New York Times reports. It said an announcement will come today.

The deal, part of Google's campaign to expand its ad sales operation into traditional media, will give Google access to about 5 percent of the commercial time on all of Clear Channel's 675 stations. The companies did not disclose the financial details of the arrangement.

The Financial Times reported that critics may use privacy concerns to try to block a deal. Google said that it will use DoubleClick's technology to "tag" its users --  placing small software markets on its customers' computers so that it could "increase the relevance of ads."


 



 

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