Rivals complain about Google, DoubleClick Deal; investors expect further mergers

Citing antitrust concerns, rival companies of Google Inc., want regulators to closely scrutinize the planned $3.1 billion acquisition by Google of online advertising firm DoubleClick Inc.

by Geoffrey Ramos

Investors in Wall Street, however, showed no apprehension over the acquisition deal. Stock prices for smaller digital advertising firms on Monday rallied in light of the merger, suggesting that investors are more excited over further potential takeovers in the digital marketing industry than worried over Google-DoubleClick potentially stealing business away from smaller rivals.

Microsoft Corporation, rumored as one of the losing bidders in the DoubleClick purchase, is leading protests over the merger deal that could potentially give Google control of 85 percent of the online ad distribution market.

Brad Smith, senior vice president and general counsel of Microsoft, said the merger deal "raises serious competition and privacy concerns" and has called for regulatory authorities to closely scrutinize the merger.

"[Google's purchase of DoubleClick] gives them unprecedented control in the delivery of online advertising and access to a huge amount of consumer information by tracking what customers do online," Smith said.

"We think this merger deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market."

Market analyst, Nate Elliot of JupiterResearch, told PC World that Google-DoubleClick's control of the online ad business is also worrisome. "The biggest question is not antitrust but trust: whether Google's and DoubleClick's customers will trust a single, large company with the majority of their advertising data," he said.

The announcement of the Google-DoubleClick merger caused a rally in share prices for other online ad distributors, including aQuantive, Real Media Inc., and ValueClick Inc.

Shares for aQuantive Inc. jumped 12.2 percent, while Real Media Inc. prices rose by 10.6 percent. ValueClick also gained 2.3 percent in shares.

Wall Street analysts are predicting another merger deal would follow Google's acquisition of DoubleClick. The deal itself followed Publicis' $1.3 billion purchase of Digitas Inc. four months ago. After failing to land DoubleClick, Microsoft is said to be eyeing aQuantive, but neither have confirmed any potential deal.