Google ad expansion gains few detractors

WASHINGTON -- Senators expressed no outright opposition to Google's $3.1 billion purchase of online advertising firm DoubleClick at a hearing focused on the deal's potential threats to competition and consumer privacy.

Sen. Herb Kohl, a Wisconsin Democrat, chairman of an antitrust subcommittee, said at the outset of Thursday's hearing the transaction "warrants close examination" by federal regulators. But afterward, he said there was "no clear winner" among the deal's supporters and opponents -- most notably Microsoft.

While senators can't block the deal, they can express their concerns to antitrust regulators about combinations they oppose.

But Sen. Charles Schumer, a New York Democrat, appeared satisfied with a Sept. 25 letter from Google that committed to take "important steps" to improve its privacy standards and also promised that the combined company would increase its jobs in New York.

A lawyer for Microsoft, which sought to acquire DoubleClick but lost out to Google, argued the deal would enable Google to "become the overwhelmingly dominant pipeline for all forms of online advertising."

The purchase also raised privacy issues because it would give Google "sole control over the largest database of user information the world has ever known," Microsoft general counsel Brad Smith said.

Microsoft agreed earlier this year to pay $6 billion for Seattle-based online advertising firm aQuantive, and Yahoo bought Right Media for $680 million.

Google's chief legal officer, David Drummond, said there was a "certain irony" to Microsoft's complaints. The software giant remains subject to the terms of a five-year antitrust settlement it reached with the U.S. government in 2002, and the company lost an appeal of a European Union antitrust case earlier this month.

The Federal Trade Commission is already reviewing whether the Google-DoubleClick combination would violate antitrust law. Consumer groups are pressing the agency to also scrutinize Google's privacy practices.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, told the Senate committee Google should be required to strengthen its privacy practices as a condition of the acquisition.