US senate looks at Google

Rudolph Muller

Rudolph Muller is the editor at MyBroadband and covers telecoms and broadband news. Rudolph comes from an academic background, but left the University of...

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Microsoft has urged a US Senate panel to oppose Google’s purchase of online ad targeting colossus DoubleClick, arguing that the 3.1 billion dollar deal threatens competition and privacy.

Microsoft general counsel Brad Smith condemned the pending Google-DoubleClick deal during an antitrust hearing led by a senator that warned the acquisition “warrants close scrutiny”.

“If Google and DoubleClick are allowed to merge, Google will become the overwhelmingly dominant pipeline for all forms of online advertising,” Smith told Wisconsin Senator Herb Kohl at the hearing in Washington, DC.

“This merger will almost certainly result in higher profits for the operator of the dominant advertising pipeline, but it will be bad for everyone else,” Smith said.

Google chief legal officer David Drummond defended the deal, countering that the world’s leading Internet search engine and DoubleClick were complementary companies and not competitors.

“We are confident, and numerous independent analysts have agreed, that our purchase of DoubleClick does not raise antitrust issues,” Drummond testified.

“The simplest way to look at this is by way of analogy. DoubleClick is to Google what FedEx or UPS is to Amazon.com,” he said, referring to the main US package delivery companies and the popular retail website.

While buying DoubleClick will help Google improve sales of display ads it won’t block other companies from competing, Drummond said.

Drummond pointed out that rivals Microsoft, Yahoo and America Online made deals recently to acquire ad-specialty firms.

Microsoft agreed to pay six billion dollars for ad-targeting firm aQuantive and Yahoo paid 680 million dollars to take the reins of Internet ad broker Right Media.

AOL recently bought ad-serving companies ADTECH and TACODA, which specializes in behavioral targeting of online ads.