Posted by: Rob Hof on March 11, 2008
It was expected by now, but the European Commission has just approved Google’s $3.1 billion bid for ad serving firm DoubleClick. Even though competitors such as Microsoft and privacy advocates had both opposed the deal, the EC imposed no conditions. Its statement:
“The Commission’s in-depth market investigation found that Google and DoubleClick were not exerting major competitive constraints on each other’s activities and could, therefore, not be considered as competitors at the moment.”
I’m not entirely surprised. For all of Google’s power, especially in Europe, DoubleClick’s business looked rather different from Google’s, so it was tough to make the case that Google was swallowing a rival to concentrate its power. Fact is, Google is nowhere in online display ads, where both Microsoft and Yahoo have considerable leadership.
Google also said it closed the deal. The news this morning has bouyed Google’s stock, which has been hammered by concerns that it may be feeling the slowing economy for the first time. Shares were up close to 4% in early trading.
Schmidt added a bit of color on Google’s official blog (including the likelihood that there will be layoffs as it integrates DoubleClick):
“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.
“As the combination of Google and DoubleClick delivers better, more relevant display ads, we’re also looking forward to delivering an improved online experience to users. Because user trust is paramount to the success of our business, users will continue to benefit from our commitment to protecting user privacy following this acquisition. And our scale and infrastructure mean that users will also be spending less time waiting for web pages to load. Ultimately, we believe that by combining our advertising network with DoubleClick’s display ad serving products, and by investing resources in the display ad business, we will be able to help publishers and advertisers generate more revenue. That in turn will fuel the creation of even more rich and diverse content for Internet users everywhere.”