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April 16, 2007

Microsoft tries to break up Google’s DoubleClick nuptials

Posted by David Hunter at 10:24 AM ET.

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.”

Next step:

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.

Filed under AOL, AT&T, Acquisitions, Antitrust, Coopetition, DoubleClick, General Business, Google, Governmental Relations, Legal, Microsoft, Yahoo

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7 Responses to “Microsoft tries to break up Google’s DoubleClick nuptials”

  1. FTC investigates Google acquisition of DoubleClick -- Microsoft News Tracker Says:

    [...] Microsoft got its wish and there will be a second stage investigation by the Federal Trade Commission of the Google acquisition of Internet ad firm DoubleClick. The news was broken by Steve Lohr at the NY Times this morning and confirmed by Google later in the day: Google is confident the FTC will conclude the acquisition “poses no risk to competition,” Google said in the statement. [...]

  2. FTC to review Microsoft’s acquisition of aQuantive -- Microsoft News Tracker Says:

    [...] Perhaps Microsoft executives should be careful of what they wish for. They famously suggested an antitrust investigation of Google’s acquisition of DoubleClick and got their wish. Now John R. Wilke and Kevin J. Delaney at the Wall Street Journal are reporting that the FTC is looking into other recent acquisitions in the Internet advertising industry including Microsoft’s blockbuster acquisition of aQuantive. [...]

  3. With DoubleClick, Google Plugs Into Display Advertising Says:

    [...] More Updates: Robert Scoble, Don Dodge.Google Watch, Washington Post, Things That, CNET, A VC, Microsoft, Jeremy’s Blog, Scobleizer, Search Engine Roundtable, Oliver Thylmann’s Thoughts, Microsoft News Tracker, WebProNews, Silicon Valley Watcher, GigaOm, Inc. Magazine and Andy Beal’s Marketing Pilgrim — Jay Sears Sphere It [...]

  4. Microsoft sics lobbyists on Google’s DoubleClick buy -- Microsoft News Tracker Says:

    [...] You may recall that Microsoft was rather upset to be left at the altar when DoubleClick ran off with Google and was vociferous in demanding a detailed antitrust investigation which came to pass when the FTC announced a second stage investigation of the acquisition. Now we find out that just in case the folks in Washington didn’t understand the nuances of their position, Microsoft hired the lobbying firm of Patton Boggs to tell their story: [...]

  5. FTC greenlights Google acquisition of DoubleClick | Microsoft News Tracker Says:

    [...] Despite Microsoft’s best efforts to stop Google’s acquisition of DoubleClick, the US Federal Trade Commission (FTC) announced today that they have completed their investigation and have no objections: [...]

  6. Google’s Doubleclick acquisition completed | Microsoft News Tracker Says:

    [...] Despite Microsoft’s best efforts, Google’s acquisition of Doubleclick was completed today as the European Union gave its approval. The key graph from Eric Schmidt’s blog post: Advertisers and publishers who work with us have long asked that we complement our search and content-based text advertising with display advertising capabilities. DoubleClick gives Google the leading platform for display advertising, enabling us to rapidly bring advances to the market in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies. [...]

  7. Google’s DoubleClick will serve Microsoft Silverlight ads | Microsoft News Tracker Says:

    [...] DoubleClick unit (whose acquisition was the source of much Microsoft rancor) announced today that it has added Microsoft’s Silverlight 2 to the video technologies in [...]

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