The European Union is about to deliver Google some good news. According to reports, the European Commission is set to approve the search giant's $3.1 billion acquisition of DoubleClick.
The news is not unexpected because the EC has yet to file formal objections to the merger. The EC has never rejected a deal without filing formal objections. In the U.S., the Federal Trade Commission approved the deal in December, despite virulent objections from privacy groups.
Final approval won't come until April 2 -- a full year since the deal was announced and a sign that Google, like Microsoft  , faces extreme scrutiny when acquiring companies. With less than a month to go, it was clear that the EC won't place roadblocks in Google's way.
The Price of Success
"It's the price that Google must pay for its success," Rick Aristotle Munarriz wrote on the investing site Motley Fool. "Will this make it harder for Google to snap up other decent-sized Internet advertising specialists? Of course. If striking a deal with Google means delayed closings and the potential of regulatory derailment, Big G will have to bid a premium for future acquisitions if its rivals are holding up bidding cards."
The acquisition is important for Google, Munarriz wrote, because while Google's strength is in text ads, companies like DoubleClick deliver the "eye candy that is typically preferable in tough-to-monetize sites like social networking and gossip rags."
"This is still an ongoing investigation, but we do not believe the transaction raises any competition concerns," said a Google spokesperson. "We hope the EC will come to the same conclusions as the FTC and clear the deal without any conditions."
More Pressure on Microsoft
With Google's already dominant lead in Internet advertising, opponents to the deal like Microsoft have argued that with DoubleClick Google will essentially represent an advertising monopoly.
The final approval may well put even more pressure on Microsoft to complete its hostile takeover of Yahoo. Microsoft offered $44.6 billion, which Yahoo's board has so far resisted. The board has been searching for a white knight through discussions with Rupert Murdoch's News Corp. and Time Warner about trading MySpace or AOL for substantial holdings in Yahoo.
The Yahoo board went so far as to change its bylaws regarding the election of directors in the face of Microsoft threats to launch a proxy fight to nominate its own board.
Meanwhile, DoubleClick launched a new "publisher solution" designed to make it easier for Web publishers to sell inventory in vertical networks. DoubleClick's strategy is to collect Web sites with similar content and tastes, and pool the sites' ad inventory into larger blocks.
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