Tuesday, August 21, 2007

PFF: Google-DoubleClick merger will create benefits for consumers

I wrote a few weeks ago about the recent activity in the online advertising arena since we announced our acquisition of DoubleClick. Today, I suggest you check out an op-ed in the Wall Street Journal from Tom Lenard and Paul Rubin of the Progress & Freedom Foundation. They write that "both the antitrust and the consumer protection branches of the FTC should leave this acquisition alone. It will create benefits with no increase in market power and no harmful reduction of privacy." (Note that Google is a PFF supporter, though they are independent in their positions and we have disagreements with them about a number of issues, including net neutrality.)

A few highlights from the op-ed:

Those who complain about Google's purchase of DoubleClick make two claims. Both are flawed.

The first argument is that, since both firms have a large market share of their respective spheres, a merger would be monopolistic. The flaw is that the two companies undertake activities that don't overlap. Google places text ads mainly on its own Web sites and search-result screens. DoubleClick delivers display ads from advertisers to Web sites. It creates no ads and controls no Web sites. Even if we believe that Internet advertising is a distinct market (debatable, since it comprises only about 5% of all advertising) the combined firms will not gain any market power since they do not have any business in common.

The second argument comes from privacy advocates who have filed a brief with the FTC. They say the merger "could impact the privacy interests of 233 million Internet users in North America." The FTC's antitrust function and its consumer protection function are fundamentally different. Indeed, the more information markets have, the more competitive they are. If "privacy" advocates have their way, there would be less information and markets would not work as well.

We have a slightly different take from PFF on privacy. We recognize that user, advertiser and publisher trust is paramount to the success of our business and to the success of this acquisition, and we take seriously the concerns that some have raised about the privacy aspects of online advertising. We also think the public debate over online privacy is important, and we plan on joining the FTC's November town hall meeting looking at the issue.

As it happens, I'm in Aspen this week for PFF's annual Aspen Policy Summit, where issues like privacy, spectrum policy, child online safety, and patent reform have been hot topics of debate (Dow Jones, CNET, the Rocky Mountain News, Tech Daily Dose, Tech Liberation Front, and the 463 Blog have all been covering the conference). And tonight, our CEO Eric Schmidt will speak to the conference attendees -- keep an eye on this space later this week for more about Eric's talk.


Daithí said...

Pablo -

Do you not think relying upon support from the infamous tobacco industry shill "Progress and Freedom" Foundation - an organisation which Google funds, along with a lot of what most Google users would see as traditional 'Big Business' like Disney, AT&T, etc - is a bit desperate?

The PFF has never sought anything other than the promotion of the interests of its corporate supporters. Really, I'm not sure how reports-for-hire from lobbyists is consistent with Google's ethical mission at all. Putting PFF policies into action would surely mean the destruction of Google (or do you have to pay more to change the tone of reports?)

The PFF opposing any type of public-interest control is about as newsworthy as a celebrity walking down a red carpet. It's hardly worth your while trumpeting it as an endorsement. Now, if the PFF had come out and supported privacy law, or indeed anything that involves a preference for users or consumers over corporate interests, that would have been worth posting about. What about it, eh?

mountain19 said...

so they have been bought off by the corporations protecting the exposure by google vids? seems this is what i am reading. if wrong tell me. otherwise will download as much as i can for now. news worthy is right like paris hilton crap. how stiffeling.

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