Google Critics Miss the Mark on Ad Deal

Google Critics Miss the Mark on Ad Deal

Buyout of DoubleClick Would Offer Benefits to Consumers
November 19, 2007

Washington, D.C., November 20, 2007—Google’s proposed acquisition of online advertising firm DoubleClick was criticized this week by U.S. Senators and antitrust committee members Orrin Hatch (R-UT) and Herb Kohl (D-WI). Google is seeking to acquire DoubleClick to enhance its advertising business, but Kohl and Hatch contend that the purchase will threaten competition.

The following is a statement on opposition to the Google DoubleClick deal by Cord Blomquist, Technology Policy Analyst at the Competitive Enterprise Institute

"Kohl and Hatch overlook the merger’s benefits to consumers. A Google-DoubleClick merger would offer a vastly improved product to content-driven websites. One of the greatest challenges on the web is generating ad clicks, which are a crucial revenue source. With individualized information, Google-DoubleClick would be able to deliver tailored ads, better informing consumers of products they might actually purchase and giving fledgling websites a shot at establishing a strong online presence.

"The Senators’ concerns about market consolidation are unfounded. They depict the web advertising market as static—yet the last decade has shown the dynamic nature of Internet commerce. The history of the Internet is littered with former giants like AOL, AltaVista, and Lycos that lost significant market share or went bust because they couldn’t keep innovating. The real competition to Google-DoubleClick may not even exist yet—Google itself was a grad student science project a decade ago. Startups can grow exponentially in a short time on the web. Facebook, a $10-billion gorilla today, didn’t even exist four years ago. Established advertising powerhouses like Microsoft and Yahoo also pose a threat to Google in the marketplace. Both have recently bought ‘ad serving’ companies in anticipation of competing with Google.

"The efficiency of the free market is nowhere more evident than on the Web, where creativity matters far more than market leverage. Government intervention would undermine this innovative spirit, just as antitrust prosecutions against Microsoft retarded the pace of progress. If federal regulators reject the proposed Google acquisition, Internet users will be the ultimate victims."

CEI is a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government. For more information about CEI, please visit our website at www.cei.org.