Google Closes In on DoubleClick Deal

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It also didn't help Google opponents that many of the company's competitors recently struck agreements to buy ad networks themselves, similar to Google's proposed deal with DoubleClick. Microsoft bought DoubleClick competitor aQuantive for $6 billion in May (BusinessWeek.com, 5/18/07). Yahoo! (YHOO) and Time Warner's (TWX) AOL also scooped up ad-serving and targeting firms earlier this year. Meanwhile, independent players, such as Specific Media, have secured millions in funding to consolidate their operations with other smaller ad networks (BusinessWeek.com, 11/1/07).

In a statement on Google's blog, Chief Legal Officer David Drummond applauded the ruling: "The FTC's decision publicly affirms what we and numerous independent analysts have been saying for months, our acquisition does not threaten competition in what is a robust, innovative, and quickly evolving online advertising space."

Privacy Violation?

But will it threaten Web users? The final answer may rest with the European Commission. In November the commission delayed a decision on the deal (BusinessWeek.com, 11/14/07), saying it was more complicated than many competition cases and demanded further review. The EC has until Apr. 2 to issue a ruling.

Privacy advocates worry that Google, combining its wealth of search data with the information DoubleClick collects on who visits clients' sites, would violate consumer privacy. The sheer volume of information that DoubleClick collects would make it easy for Google to understand nearly everything about what millions of individual consumers do on the Web, critics say.

Google counters that DoubleClick clients own information about who visits their sites and what they do there. Many of those clients would consider it a violation of that agreement for Google to, say, sell car ads on its Gmail service to people who have recently visited an automotive site that uses DoubleClick. As a result, Google says, it can't simply fuse its data with DoubleClick's customer information. However, privacy groups argue that Google could easily encourage DoubleClick clients to relinquish their data in exchange for, say, free search ads.

The FTC did offer a ray of hope for privacy advocates. The commissioners issued several recommendations about behavioral targeting, where information about users' Web activity is used to tailor online ads. The FTC said sites should clearly notify users when they're collecting data on their actions, and that sites should limit the length of time they store that data to reduce the risk of it falling into the wrong hands.

The FTC said it plans to look into whether "heightened protections" are needed to safeguard consumer privacy online.

Holahan is a writer for BusinessWeek.com in New York .