Later today David Drummond, our Senior VP for Corporate Development and Chief Legal Officer, will take to Capitol Hill to testify before the Senate Judiciary Committee about the latest developments in the online advertising industry, including our acquisition of DoubleClick. You can read David's complete testimony here.
David will tell the committee about some of the benefits of online advertising generally:
"In our experience, our users value the advertisements that we deliver along with search results and other web content because the ads help connect them to the information, products, and services they seek. Simply put, advertising is information, and relevant advertising is information that is useful to consumers. The advertising we deliver to our users complements the natural search results that we provide, because our users are often searching for products and services that our advertisers offer. Making this connection is critical. In fact, we strive to deliver the ads that are the most relevant to our users, not just the ones that generate the most revenue for us."
"The simplest way to look at this is by way of analogy. DoubleClick is to Google what FedEx or UPS is to Amazon.com. Our current business involves primarily the selling of text-based ads – books in our analogy. By contrast, DoubleClick's business at its core is to deliver and report on display ads."
"Our acquisition of DoubleClick does not foreclose other companies from competing in the online advertising space. Rather, the transaction is just one of several that underscore the strong competition in the online advertising space...Each of the acquisitions following our purchase of DoubleClick demonstrates that there are many sophisticated, well-financed, and competitive companies that believe that the online advertising space merits more investment and remains open to strong competition."
And since some have raised questions about privacy in connection with this acquisition, he'll address those issues as well:
"We make privacy a priority because our business depends on it. If our users are uncomfortable with how we manage the information they provide to us, they are only one click away from switching to a competitor’s services. If you don't believe me, recall that before Google, users clicked on an earlier generation of search engines like Excite, Altavista, Lycos, and Infoseek – each extremely popular in its time. User interests effectively regulate our behavior, and user trust is a critical component of our business model."
You can read more about why we decided to buy DoubleClick, some of the recent steps we've taken to strengthen privacy, and the recent flurry of online ad acquisitions. Here's also some background on the acquisition, and comments that newspapers, independent analysts, and advertising industry leaders have made about this acquisition. Watch this space later for video from the hearing.
UPDATE (6:17 p.m. ET): Check out video below of David Drummond's testimony: