It has been a long, protracted affair but the European Commission has finally followed in the footsteps of its US counterparts - the U.S Federal Trade Commission - and granted approval to Google to conclude their $3.1 million deal for online advertising firm, DoubleClick. The European Commission, the 27-nation EU's antitrust authority in Brussels, said in a statement that the deal can go ahead without conditions, making the acquisition the largest in Google's nine-year history.Google originally announced the purchase DoubleClick back in April 2007 to help bolster its sales of internet ads that include pictures and videos. However, the deal has been subject to intense grumblings and legal challenges before finally being granted approval by the FTC in December 2007 following an eight month review into possible antitrust violations. The Australian Competition and Consumer Commission also performed a review of the proposed purchase before granting its approval in October 2007.
The EU rubber-stamp will come as a blow to Google's competitors, which include rivals Yahoo! Inc and Microsoft Corp, who both expressed grave concerns that the union between Google and DoubleClick would damage competition in the highly lucrative global online advertising market. However, the European Commission felt that the deal would not have a detrimental effect on consumers due to the presence of alternatives, while the new merger would lack the necessary firepower to marginalize Google's competitors.
Upon announcement of the proposed deal last April, Microsoft claimed that the acquisition would place over 80 per cent of the web advertising market into Google's hands. Google have argued that its text-based advertising system complements DoubleClick's graphical display ads, and also that both companies participate in different spheres of the advertising sales and delivery process; thus they were not competitors and not subject to antitrust allegations. Google generates revenue by selling text-based advertisements that appear next to search results, while DoubleClick allows for display ads, which include graphics or animation.
Microsoft bought DoubleClick rival, aQuantive Inc, for $6 billion in May 2007 but still trails Google in web search services. Last month, the software giant's $44.6 billion bid for Yahoo! was rejected by the search engine pioneer, but a hostile takeover may still be on the cards as Microsoft tries to close the gap on its rival in Mountain View.
Many of Google's competitors may have hoped that the European Commission and the FTC would veto any deal. But now with the deal rubberstamped, the last regulatory hurdle facing Google has been cleared and the blockbuster deal can now, at last, be finalised.
