Google-DoubleClick deal probed by House, Senate

Two U.S. congressional subcommittees are investigating whether Google Inc.’s $3.1 billion purchase of DoubleClick Inc. will stifle competition in the online advertising market.
The Commerce, Trade and Consumer Protection subcommittee of the U.S. House of Representatives may hold a hearing after lawmakers return from their August recess, Representative Bobby Rush said last week in a letter to Federal Trade Commission Chairman Deborah Platt Majoras.
Senator Herb Kohl, a Democrat from Wisconsin who heads a subcommittee on business competition, also is assessing the purchase, his spokeswoman Lynn Becker said today in an e-mail. The senator plans to hold a hearing in September, she said.
Google, owner of the world’s most popular search engine, announced plans to buy DoubleClick in April to bolster sales of Internet ads that include pictures and videos. The Federal Trade Commission began a probe in May, and European Union regulators last week said they would also review the transaction.
Rush, an Illinois Democrat, asked Majoras to brief his panel on the FTC’s investigation in a private meeting. He said he’s also concerned about the effect the transaction may have on users’ online privacy.
“The subcommittee takes very seriously the protection of consumer privacy,” Rush said in the letter.
Google is confident that the FTC will approve the deal, Adam Kovacevich, a spokesman for the Mountain View, Calif.-based company, said in an e-mailed statement.
“Numerous independent analysts and academics have determined that the online advertising industry is a dynamic and evolving space,” Kovacevich said. “Rich competition in this industry will bring more relevant ads to consumers and more choices for advertisers and Web site publishers.”
DoubleClick’s two main products help Web publishers and advertisers manage online advertising. The promotions are typically so-called display ads, which include graphics or animation.
The government probe will determine whether customers consider these display ads to be a separate market than text ads, the sponsored links that often appear next to search results, Blair Levin, an analyst at Stifel Nicolaus & Co., said in an April report.
AT&T Inc., the biggest U.S. telephone company, and Microsoft Corp., the world’s largest software maker, have said the transaction would give Google too much control over the online ad market.
Spending on search-engine ads may rise 33 percent to $16.3 billion this year, while display-advertising spending may rise 21 percent to $11.9 billion, according to Merrill Lynch & Co.