Google’S $3.1bn (£1.5bn) purchase of online ad business Doubleclick will push up prices for advertisers and hit the income of web publishers, rival operator Yahoo! has told the European Commission.
Concerns are mounting that Google could become as dominant in online display advertising as it is in the £4.5bn European search market, where it controls more than 80 per cent of revenues.
Google will learn at the end of this month whether the commission, which is studying the deal, intends to launch a full three-month inquiry.
In Yahoo!’s first public expression of concern about Doubleclick, Andrew Cecil, public policy head, said: “Combining Google’s search business with Doubleclick’s ad technology will strengthen Google’s dominant position in Europe. The competitive landscape for online advertising will be negatively impacted. The end result will be higher prices for internet publishers and advertisers and less choice for European consumers.”
Yahoo!’s submission to the Commission says that a healthy degree of competition in online display acts as a constraint on Google’s search prices. If search costs too much, advertisers can simply spend more on display.
Owning Doubleclick, however, could give Google the ability to expand its display business much faster than competitors. And internet publishers could be forced to give Google a larger slice of their ad revenues. In the complicated world of online advertising, premium advertising slots on the most popular sites are sold by real people, but most inventory is sold through online auctions.
Advertisers use such auctions, called advertising exchanges or networks, to bid against rivals to place ads on websites. Ad exchanges are growing faster than any other online ad business.
Google has an online auction business, Adsense, which already controls an estimated 25 per cent of the European market. Doubleclick has technology which helps advertisers to manage their campaigns – sending back information on cost and number of people reached.
A Google spokesman said: “We asked the Commission to look at the proposed acquisition. We believe it is good for users and advertisers, and it fosters competition.”
Source: telegraph.co.uk