Google DoubleClick merger gets ACCC go-ahead

The Australian Competition and Consumer Commission says it will not intervene in Google's US$3.1 billion acquisition of ad-serving company DoubleClick.

"A key focus of the ACCC's investigation was whether the combination of Google's network of Web site publishers and DoubleClick's ad serving capabilities would enable the merged entity to increase the cost of ad serving to Web site publishers and advertisers," said ACCC chairman Graeme Samuel yesterday.

"In reaching its decision, the ACCC noted that Google and DoubleClick are not close competitors in the provision of ad serving. In addition, the ACCC also took into account the presence of other competitors in this market that would be likely to constrain the merged entity post-merger," said Samuel.

DoubleClick is a dominant player in the Australian ad-serving market, but there is also strong competition from local service providers, said John Butterworth, CEO of the Australian Interactive Media Industry Association (AIMIA).

The ACCC's decision remains a significant move because it had the potential to stifle the merged company's actions in Australia, said Butterworth.

"It's important that our local jurisdiction has a say in this. They still would have been able to block a merger of action in Australia. But the ACCC is required to go through the motions and I'm not surprised at its conclusion," he told ZDNet Australia.

Business Review Weekly estimated that Google's revenue from Internet search advertising in Australia was AU$206 million in 2006, giving it an 89 percent share of search advertising revenue and 20 percent of the total online advertising market, estimated to be worth over AU$1 billion. Google's closest Australian competitors are Sensis, Fairfax Digital and Seek.

US based Gartner analyst Andrew Frank wrote in a research note earlier this year that Google's acquisition will give it greater reach into the display advertising market and warned advertisers and publishers to be wary of an erosion of DoubleClick's neutrality in supporting networks and publishers that compete with Google -- particularly in emerging areas such as mobile applications.