Thursday, December 20, 2007

Feds approve Google's $3.1 billion purchase of DoubleClick

Google took one more step toward world Internet domination this morning when federal regulators approved its $3.1 billion acquisition of online advertising company DoubleClick.

However, Google must still jump through a rather large hoop before it seals the deal. European regulators must also sign off. The European Commission, which has an April 2 deadline, has emerged as a much tougher obstacle to approving large mergers.

But back on Google's home shores, the Federal Trade Commission voted 4-1 to approve the deal. The commissioners accepted Google's arguments that there was little overlap between is online ad sales and the tools that DoubleClick provides that allow other companies to make money from things like banner adds.

"The FTC's strong support sends a clear message: this acquisition poses no risk to competition and will benefit consumers," Eric Schmidt, Google's chief executive, said in a press release this morning. "We hope that the European Commission will soon reach the same conclusion."

The deal was announced in April, but immediately prompted opposition on two main fronts. Google rivals such as Microsoft tried to argue that deal would give Google too large of a share of the online advertising market. And privacy advocates opposed the deal because they worried Google would have far too much information about what its customers did online.

The result has been an intense campaign on the part of Google to secure approval. The company beefed up its lobbying team in the nation's capital over the past year as it sought to persuade regulators and politicians.

While the FTC has said it lacks authority to block deals on privacy grounds, it offered an unusual aside to its approval today. The FTC proposed a set of privacy guidelines for the online advertising industry, something the commissioners said were targeted not just at Google, but the entire industry.

Google's stock rose $5.49 to $682.86 in early trading.

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