Google, Microsoft Clash Over DoubleClick

NEW YORK Google and Microsoft presented sharply different takes on Google’s proposed acquisition of DoubleClick at a Senate hearing yesterday.

In prepared testimony, Google’s chief legal officer, David Drummond, insisted the $3.2 billion deal poses no threat to the industry because, despite its prowess in the text-based search ad arena, Google is a smaller player in the realm of display advertising.

Meanwhile, Microsoft general counsel Brad Smith said the combination would make Google “the overwhelmingly dominant pipeline for online advertising.”

The statements came at a Senate Judiciary Committee hearing on the implications of the deal. (Since Google agreed to buy DoubleClick in April, a raft of U.S. and international regulatory bodies have begun reviews on antitrust and privacy grounds.)

In their arguments, Google and Microsoft offered vastly different views of the online ad market. Google sees search and display advertising distinctly, while Microsoft contends they are two sides of the same coin. Smith said Google and DoubleClick are competitors, while Google maintains they are complementary businesses that do not compete with each other.

Drummond noted the spate of acquisitions that followed the DoubleClick deal—including Microsoft’s purchase of the parent company of Atlas, a DoubleClick competitor—as proof that competition in the online ad space is robust.

“These acquisitions are strong signals that the market believes this space has a lot of room for growth and competition,” Drummond said.

What’s more, Drummond said, Atlas has added 20 new clients since becoming part of Microsoft, proving that the company can compete once Google’s acquisition of DoubleClick is finalized.

For its part, Microsoft touched on privacy concerns, citing the consumer data used for ad targeting as the main motivation for the Google-DoubleClick deal. Smith painted the combination in stark terms. “Google seeks to record almost everything you see and do on the Internet and use that information to target ads,” he stated. “One question is whether this merger will create a whole new meaning to the term ‘being Googled.'”

Google is committed to maintaining user privacy, Drummond said. With DoubleClick, it would continue to let users opt out of cookies and would experiment with “crumbled” cookies, which disperse data rather than retain it in a single cookie.