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Google expanded its power in online advertising Tuesday when it
completed its takeover of DoubleClick, a move which increases the
pressure on rival Microsoft to win its hostile bid for Yahoo.
The merger of the world's top
online search firm with the industry leader in matching ads to
people's Internet activities came after European regulators signed
off on the deal, and strengthened Google's domination of the
lucrative online ad business.
"We are thrilled that our
acquisition of DoubleClick has closed," Google chairman and
chief executive Eric Schmidt said in a written statement shortly
after European antitrust regulators cleared the deal.
"Google now has the leading
display ad platform."
The European Commission said an
investigation opened in November 2007 concluded that the transaction
"would be unlikely to have harmful effects on consumers."
US regulators approved the deal last year.
Google ended a bidding war with
Microsoft in April 2007 by agreeing to pay 3.1 billion dollars to
add DoubleClick to its Internet money-making arsenal.
"It's part of Google's
desire to control most of the online ad revenue," said analyst
Rob Enderle of Enderle Group in Silicon Valley.
"Google is trying to become
a one-stop shop for ads."
Google's purchase of DoubleClick
is likely among the reasons Microsoft is now trying to buy Yahoo for
44.6 billion dollars in cash and stock, analysts said.
Microsoft opposed Google's
purchase of DoubleClick, and says it wants to combine resources with
Yahoo to battle Google's dominance on the Internet.
"It is hard to see how
Microsoft's original acquisition effort or idea was not somehow
predicated on the belief Google would acquire DoubleClick,"
Cantor Fitzgerald analyst Derek Brown told AFP.
"It doesn't seem to be a
wild card in the equation."
Yahoo's board of directors
rejected Microsoft's February 1 offer, saying it undervalues the
California company.
Microsoft is reportedly scheming
to replace the incumbents with board members that would approve the
takeover.
"Google owning DoubleClick
does increase the pressure on Microsoft to close the deal with
Yahoo, absolutely," Enderle said.
DoubleClick "is the most
powerful company in its space," using online behavior tracking
to target people with online ads, according to Enderle.
In a practice common in the
industry, DoubleClick installs software bits referred to as
"cookies" on Internet users' computers to track pages they
view.
Google meanwhile stores its
users' search terms in a way that can identify them through their
Internet Protocol address.
Privacy advocates fear that
Google and DoubleClick would be able to merge their expansive
databases in a way that allows the company to further track people's
Internet activities.
Regulators on both sides of the
Atlantic said they did not take into account the impact on privacy
of the takeover because they are legally required to focus on
competition.
In December, US Federal Trade
Commission members voted 4-1 to refrain from blocking the deal and
said Google and DoubleClick "are not direct competitors in any
relevant antitrust market."
The panel expressed concern about
the privacy implications of the tie-up but said that could not be
considered in its review.
"The FTC lacks the legal
authority to block the transaction on grounds, or require conditions
to this transaction, that do not relate to antitrust," the FTC
said.
But the agency said it released a
set of proposed marketing principles at the same time to address
privacy and said it would "closely watch" Google.
-- AFP
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