Microsoft Wary of DoubleClick Buyout

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By Sam Diaz
Washington Post Staff Writer
Monday, April 16, 2007

Microsoft said yesterday that Google's proposed purchase of Internet advertising company DoubleClick raises antitrust and privacy concerns that deserve careful review by authorities.

Executives at the software giant said they talked over the weekend with AT&T, AOL and Yahoo about similar concerns. Microsoft had bid for DoubleClick but lost to Google.

The $3.1 billion acquisition, announced late Friday, would combine the largest providers of online advertising and create a dominant force, Microsoft said. Spending on Internet advertising rose 17 percent last year from 2005, to $9.8 billion, far faster than advertising for traditional media, according to research firm TNS Media Intelligence.

"By putting together a single company that will control virtually the entire market . . . Google will control the economic fuel of the Internet," said Brad Smith, general counsel for Microsoft.

Microsoft also raised concerns about the privacy of Internet users under a combined company. DoubleClick utilizes a technology that remembers sites a user visits and serves up relevant ads; Google keeps data about searches conducted on its site.

Smith said Google would have "an unprecedented degree" of personal information about a person's activity on the Internet.

A Google spokesman defended the deal, saying in an e-mailed statement that "we do not believe this acquisition is anti-competitive, as it promotes a vibrant, healthy market for online advertising."

Jim Cicconi, executive vice president of external and legislative affairs for AT&T, said yesterday that his company is reviewing the deal. "I don't think AT&T is drawing a conclusion, per se, whether the transaction should or should not happen, but we do have sufficient concern and feel this deserves careful scrutiny from the government," he said.

An AOL spokesman declined to comment yesterday.


© 2007 The Washington Post Company

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