The sight of Google carrying off DoubleClick to the altar has driven rejected suitor Microsoft to extreme measures – an appeal for antitrust regulators to get involved to stop the wedding:
Microsoft has released the following statement by Brad Smith, Senior Vice President and General Counsel, Microsoft Corporation, on the proposed acquisition of DoubleClick by Google:
“This proposed acquisition raises serious competition and privacy concerns in that it gives the Google DoubleClick combination unprecedented control in the delivery of online advertising, and access to a huge amount of consumer information by tracking what customers do online. We think this merger deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market.”
Even more indicative of the chagrin in Redmond, they rounded up some other aggrieved parties this weekend:
Executives at the software giant said they talked over the weekend with AT&T, AOL and Yahoo about similar concerns.
and even arranged for Brad Smith to be interviewed on Sunday by the NY Times. So far only AT&T has actually weighed in with a public support statement:
“We think antitrust authorities should take a hard look at this deal and the implications,” said Jim Cicconi, senior executive vice president for external affairs at AT&T. “If any one company gets a hammerlock on the online advertising space, as Google seems to be trying to do, that is worrisome.”
The initial antitrust review of a merger lasts 30 days. It is not yet clear whether the Justice Department or the Federal Trade Commission, which share antitrust regulatory duties, will review the Google-DoubleClick deal.
Any review of a merger on antitrust grounds begins with a determination of the “relevant market” in which the two companies operate. “That is the first hurdle in case like this,” said Andrew I. Gavil, a law professor at Howard University, “and it looks as if DoubleClick may well be in a nearby, or complementary, market instead of the same market as Google. And then the question will be how easy it is for new entrants to compete in the online advertising markets.”
The WSJ (subscription reqd.) suggests that Microsoft hopes to raise enough objections that the regulators will make a “second request” for information from the parties, which may kill the deal and will certainly slow down the process. Hmm, I wonder if the folks in Redmond have tried Neelie Kroes at the European Commission yet?
More on the role reversal theme from Paul Kedrosky:
To borrow a phrase from Microsoft’s past, this is a brazen attempt to cut off Microsoft’s future air supply. The latter company is losing share in search, failing at ad placement, trying to find a new leg to growth, and generally floundering expensively in these crucial new fast-growing markets. What better way and time for bid-’em-up Brin to stick the knife in deeper every time Microsoft spots a possible life raft than for Google to buy the target acquisition company — like DoubleClick — out from under Microsoft.
This was, in other words, a strategic and offensive buy, not a financial one, even if you can make a financial quasi-justification for the price. Google is playing very hard ball with Microsoft, deploying brutal tactics right out of the Redmond playbook, circa 1995. Call it $2-billion for DoubleClick’s revenues and customer list, plus another $1-billion for a pinched air tube to Microsoft.
Kedrosky’s take is that if the deal goes through Microsoft will shortly be considering an acquisition of Yahoo, a view also advanced by Larry Dignan earlier this month.