Oct 11th, 2007
Oct 11th, 2007
On Wednesday, Reuters reported that Google’s purchase of advertising company DoubleClick is likely to be approved by regulators — despite fierce objections from Google’s chief rivals, Microsoft and Yahoo.
At the same time, many experts point out that Internet advertising is a huge and largely untapped market that is ripe for new entrants, even if mergers like the Google-DoubleClick deal are approved.
Google’s $3.1 billion buyout of DoubleClick, if approved, is just one sign of a larger trend — the rapid consolidation of the lucrative Internet advertising industry. Though Microsoft and Yahoo are objecting to Google’s intention to acquire DoubleClick, they have made their own acquisitions as well. Microsoft Corp bought aQuantive Inc — the largest interactive ad agency — for $6 billion; Yahoo purchased BlueLithium for $300 million. Both of these deals were approved by
Because the online ad market is constantly evolving, incredibly dynamic, and difficult to define, it’s difficult to say whether the Google-DoubleClick deal would really represent an antitrust violation. The online ad market is currently expanding 15 to 20 percent a year worldwide. The global ad market, in contrast, is growing only 2 to 3 percent a year. Similarly, online advertising revenue surged to nearly $10 billion in the first half of 2007.
Because the online ad market is so huge and still surging, experts argue, it is possible for many more players to burst onto the scene and carve out their own segment of the market, even if Google and DoubleClick do merge. Online ad prices, some say, are highly unlikely to rise as a result of the deal.
