GoogleClick: In Through The Out Door
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How ironic that I would find myself at the Googleplex East, located at 9th Avenue and 15th Street in lower Manhattan, on the very same day that the Senate Judiciary Committee is holding hearings on the possible antitrust and privacy implications of Google's pending acquisition of DoubleClick.
How even more ironic that, at the same said location, that DoubleClick's NYC offices are actually already in the same building as GooglePlex East, and are currently separated by a mere door -- one that Microsoft and others apparently would prefer to see stay permanently locked.
ArsTechnica's Nate Anderson provides a full rundown here, explaining that the AEI-Brookings Joint Center for Regulatory Studies released a lengthy study with their rationale as to why the Google/DoubleClick merger should be prevented -- namely that Google and DoubleClick "compete in the same space" and that "a merger would create a company with too much control over the market."
Why? Because Google and DoubleClick's three online advertising channels function as substitutes for one another, despite Google's dominance in contextual search advertising and DoubleClick's in network-targeted display advertising. The reasoning being that substitution could lead to higher-priced display advertising which would force said display advertisers to jump ship to search advertising, which Google would also dominate.
Higher ad rates would then, based on that substitution effect, lead to monopoly.
Me, I'll buy Park Place and put up a hotel, a spa, DoubleClick, and the GooglePlex, all on the same property. Not only is the food at Google free, healthy, and prepared by the former chef for the Grateful Dead, in a combined GoogleClick there would be still be separate floors with separate functions.
I could stop on 10 to get a display ad, 8 to get lunch and a Smoothie, and 4 to buy my contextual search ads, all in one fell swoop. Kind of like going to the mall, minus all the annoying tweens.
As to the alleged substitution effect, as a onetime lead for IBM's interactive advertising, I'm not buying it.
Strategically, my display ads were used for different effect from my contextual search ads. One was used more for brand impact, the other for more contextually relevant, demand generation-oriented advertising.
Were the combined GoogleClick to be intelligent about their integration, the combined company would enable me to leverage the two of them together in a coordinated buy for maximum synergy and effect, and the alleged substitute effect would, in fact, do just that: Create synergy and effect, not monopoly.
No, I think this is as much about innovation in the courtroom, as opposed to the R&D lab -- the kind of innovation which keeps the right doors closed and the wrong ones open.