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Google-DoubleClick Deal Win-Win for Consumers

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Google-DoubleClick Deal Win-Win for Consumers

Triumph of New vs. Old Economy

Washington, D.C., December 20, 2007―Today the Federal Trade Commission (FTC) approved Google’s acquisition of online advertising company DoubleClick, allowing the two to collaborate on new technologies to improve the relevance and effectiveness of Internet ads. Critics had focused on the supposed monopoly power this would confer on Google-DoubleClick and a controversial marketing strategy from several years ago, later abandoned by DoubleClick over consumer privacy concerns.

"While the controversy seems complex, it is really quite simple," said Cord Blomquist, Technology Policy Analyst at the Competitive Enterprise Institute. "The merger is efficient, it helps fledgling websites with ad revenues, and it benefits investors and consumers. Google teaming up with DoubleClick is a win-win for everyone involved."

Despite pressure from several members of Congress, the Justice Department ultimately allowed the merger to proceed, but until today Google and its investors faced scrutiny from the FTC. The political controversy surrounding the merger highlights the inadequacies of antitrust law in a 21st century economy. Smoke-stack era laws do not foster entrepreneurship or protect consumers – they stifle competition and drive away innovators.

"There were no concrete legal reasons to oppose this move by Google," said Blomquist. "The acquisition will make the market more competitive by allowing Google to compete with Yahoo in image-based advertising. As with most criticism of acquisitions, facts and economic reality hardly influence regulators and Congress."

The acquisition's approval sends a positive signal to digital pioneers, encouraging efficient consolidation and advancing the evolution of the online marketplace. Consumers will enjoy more relevant and informative ads while websites will be able to generate more content due to additional ad revenue.

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.