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Who's Making Book on the Google-DoubleClick Deal Going Through?

Well, now we'll get to see just how powerful Microsoft really is

Well, now we'll get to see just how powerful Microsoft really is.

The test is whether it can stop Google from taking over DoubleClick and becoming, in Microsoft's words, the "dominant pipeline for all forms of online advertising" as well as "the largest database of online user data in the world."

The Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights held a webcast two-hour hearing Thursday afternoon on Google's proposed $3.1 billion acquisition of DoubleClick, the advertising company Google outbid Microsoft for.

Google's general counsel David Drummond turned up as did his opposition, Microsoft's general counsel Brad Smith, Thomas Lenard, senior fellow of the Progress and Freedom Foundation, Scott Cleland, president of Precursor LLC and Marc Rotenberg, executive director of the Electronic Privacy Information Center.

The subcommittee can't do much about the proposed merger on its own but it can whisper its takeaways into the ear of the Federal Trade Commission, which is reviewing the acquisition, and could stop it dead in its tracks or weigh it down with a lot of conditions.

Microsoft wants it flat out stopped, arguing on the privacy side that "This country doesn't permit a phone company to listen to what you say and use that information to target ads. The computer industry doesn't permit a software company to record what you type and use that information to target ads. Yet with this merger, Google seeks to record almost everything you see and so on the Internet and use that information to target ads. One question is whether this merger will create a whole new meaning to the term 'being googled.'"

Microsoft claims that with DoubleClick under its belt Google "will account for nearly 80% of all spending on non-search ads" along with a good chunk of the economy, a situation that will be "bad for publishers, bad for advertisers, and most importantly, bad for consumers."

Combined Google and DoubleClick will create a barrier to entry, Smith told the subcommittee, akin to the New York Stock Exchange uniting with Nasdaq. "Who would go anywhere else? What chance would an alternative have?"

Google, Cleland testified, has too big an infrastructure - with a million servers copying every page of the Internet every day - for a would-be rival to take on. Smith said Google was "creating a brain that controls all the major networks."

Smith claimed Google and DoubleClick are the two largest competitors in non-search ads and that antitrust laws don't permit a dominant firm "to buy success by purchasing its largest competitors."

Drummond denied that Google and DoubleClick are competitors. According to Google, they're in different, complementary businesses and so their merger isn't anti-competitive.

Heck, according to Google, Google doesn't even serve up ads, which is a pretty big suspension of belief, sort of like the time years ago when Bill Gates went to Washington and claimed Microsoft wasn't a monopoly.

According to Google, DoubleClick provides the technology to deliver ads and statistics relating to the ads while Google sells them. DoubleClick is to Google, it says, what UPS and FedEx are to Amazon.

Smith called Drummond's argument "artificial, superficial and preposterous." DoubleClick, he said, is Google's "largest and most significant competitor."

Drummond also claimed that Google has made privacy a priority, a statement none of the privacy folks believes.

Despite Google's assurances that it would destroy consumer information, Smith said, "I don't believe Google is anonymizing anything." It's merely deleting what are essentially a couple of numbers in a phone number that can be easily reconstructed, a position supported by Rotenberg, who testified that greater data collection is now planned than originally proposed.

Unseen at the hearing was the AEI-Brooking Joint Center for Regulatory Studies, which has concluded that the Google-DoubleClick merger could reduce competition in online advertising.

Besides Washington - where yesterday no clear winner was declared - Google also has to deal with the European Commission, not to mention Canadian and Australian authorities.

More Stories By Search News Desk

SYS-CON Media's Search Developer's Journal (search.sys-con.com), is the first and only global publication to present the hottest timely topics on the merging search engine companies, search optimization and search engine marketing industry, and all related articles, feature and news stories for search technology professionals.

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