Yahoo! has complained to the European Commission that Google's $3.1 billion acquisition of Doubleclick, the online advertising business, could reduce competition and ultimately push up pricing for European customers.
The fear, naturally enough considering that Google has always been in the advertising business just as much as it has the search one, is that the purchase could give it a dominant position as far as online display advertising is concerned.
Andrew Cecil, Public Policy Head at Yahoo! has broken the silence to go on the record saying that "The end result will be higher prices for internet publishers and advertisers and less choice for European consumers."
The European Commission is set to reveal at the end of October if a three month formal inquiry into the acquisition is to be held. At the heart of the argument is the contention that by having such a dominant position in the search space and also owning Doubleclick would allow Google to grow its own display advertising business at an unfairly faster rate than everyone else.
Certainly there seems little doubt given the high price paid for Doubleclick, $3.1 billion, that Google was looking at a strategic purchase decision rather than a straight valuation. Many have suggested that the fact Microsoft has shown an interest helped kick the price skywards as the last people Google would have wanted to control Doubleclick would be its Seattle-based competition. The relationships within the marketing space that Doubleclick brings with it, just about every online publisher of note and around half of all online advertising agencies, is worth its weight in gold.
The fact that Microsoft kicked up such a media fuss before the purchase, and now Yahoo! is joining in after the event, would suggest that Google has pulled off a strategic coup and got the main competition well and truly rattled.
