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I’m a little nonplussed by the way the Google-DoubleClick hearing with the Senate went yesterday. I mean, I expected some verbal jabs between Google counsel David Drummond and Microsoft’s legal eagle Brad Smith, and we got ’em.
I especially enjoyed this serve and volley that made its way in just about every report. Analogies are great, but as Drummond learned, they lend themselves to sharp-witted jokes.
Observe, when Drummond told the gathering “DoubleClick is to Google what FedEx or UPS is to Amazon.com,” Smith said, “Google is already FedEX, Google is already Amazon and now they want to buy the post office.”
Classic legal strategy. Smith summed up his company’s argument that a Google-DoubleClick union would make the search vendor a monopolist and wowed the group with his humor in one stroke. Doesn’t matter if what he said was conjecture. Microsoft 1, Google 0.
Courthouse tactics aside, there was no real way to keep score. Sen. Herb Kohl, D-Wis., chairman of the antitrust subcommittee, and Sen. Charles Schumer, D-N.Y., presided, but they didn’t seem to weigh in much, let alone take a side, which is what I was expecting.
I truly believe we would see which way they were leaning, but Kohl told the gathering there was no clear winner, and Schumer apparently said he was satisfied with a letter from Google that committed to take “important steps” to improve its privacy standards.
Everyone fears the privacy issue. DoubleClick places and tracks online ads for its customers, collecting data on consumer Web surfing in the process. Google logs users’ search data.
Sprinkle in the online ad serving platform from DoubleClick and you get a powerful combination to target consumers and sift through data for advertisers. Another way to look at it is that Google would be an even bigger target for hackers who wanted data on users.
I do believe the deal, along with carefully planned moves in mobile advertising and mobile social networking, could lock in Google as the search leader for years unless someone else comes along (Facebook as spoiler, anyone?).
But why were the senators so noncommittal? Perhaps they don’t understand the online advertising business? Perhaps all the talk about horizontal versus vertical competition left them feeling dizzy, too. Reading all the rhetoric sure made me bleary-eyed.
Or perhaps they are satisfied enough with Google’s stance on privacy and are turning a blind-eye to the arguments of Microsoft, a universally held monopolist?
A colleague told me now it seems it’s up to the Federal Trade Commission, arbiter of big mergers in the United States. I believe if the Senate is satisfied with Google’s approach to privacy, it will tell the FTC, they are OK with the deal.
I don’t know which way the FTC will go. But I believe if it takes Google for its word, it will bless the deal. But if it perceives that what Google is doing in online ads is anything like what Microsoft has done in software, it will strike the deal down.
