EU clears Google + DoubleClick; merger complete

The two largest players in the Internet advertising industry are now officially one this morning, as the final hurdle to their merger has been cleared, and the final lines on the papers have officially been signed, according to Google's CEO.

On the theory that display advertising provider DoubleClick wasn't really a competitor to contextual advertising provider Google anyway, the European Commission concluded this afternoon, Brussels time, that a merger of the two entities would not actually result in the elimination of competition.

A check of the EC's database this morning did not reveal the text of today's decision, which is generally posted quickly, though BetaNews will analyze the decision the moment it does become available.

In the meantime, we do have a statement from the EC, which includes the following: "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. Even if DoubleClick could become an effective competitor in online intermediation services, it is likely that other competitors would continue to exert sufficient competitive pressure after the merger. The Commission therefore concluded that the elimination of DoubleClick as a potential competitor would not have an adverse impact on competition in the online intermediation advertising services market."

With the final obstacle to merged operations now behind it, Google immediately responded to the news this morning by saying it has officially closed the merger transaction, having completed all other business to that end.

"We are thrilled that our acquisition of DoubleClick has closed," proclaimed Google CEO Eric Schmidt this morning. "With DoubleClick, Google now has the leading display ad platform, which will enable us to rapidly bring to market advances in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies, while improving the relevance of advertising for users."

Google and DoubleClick have long been allies, and insofar as their New York offices are concerned, even share the same building. The theory of the benefits of their merger -- one which appears to have won the day -- is that both entities would continue to provide the same services they do currently, including DoubleClick's display ad platform and its DART tools for advertisers, but would only be bolstered by full access to each other's resources.

Apparently with full intent to make good on its plans after being absorbed by Google, DoubleClick announced major changes to its DART platform just last Wednesday.

This morning's statement did not make mention of opponent's theories that a combined Google + DoubleClick would result in the combined entities having access to a huge database of personally identifying material, without legal controls in place over what they do with that material.

But in the end, what might very well have provided the final grease for the EC's wheels to get spinning is Microsoft's bid for Yahoo, which is already coming under intense scrutiny worldwide for the possibility of potentially eliminating a competitor -- the critical test in European law for whether a merger is approved or rejected. Last December, Microsoft made the case before the US Justice Dept. that the merger might leave Microsoft in a tenuous position in online advertising...a position that might place it, conceivably, in the position of having to make an acquisition of its own in order to survive.

The EC has declined to publicly comment on its position on Microsoft's bid for Yahoo, although tangential statements it has made thus far tend to point to the prospects of initial disapproval. This morning, the EC referred to both Microsoft and Yahoo as separate entities to whom prospective advertising customers could turn as an alternative to DoubleClick, even after its merger with Google.

DoubleClick has yet to provide its own statement on the matter, as has Microsoft. And prominent opponents of the merger, including the Electronic Privacy Information Center and the Center for Digital Democracy, have yet to release statements. BetaNews will share them with you when and if they do.


UPDATE 6:40 PM EDT March 11, 2008 - Microsoft officially declined comment for BetaNews on the merger's completion.

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