The antitrust relevance of yesterday's New York Times reported quote: " ...marketers increasingly want to combine their purchases of search and display advertising." has really quite profound implications for the pending Google-Double-Click deal.

What that quote does is zero in on what really matters to FTC antitrust authorities -- how would the transaction actually change the current competitive dynamic, or more specifically, how would the merger "substantially lessen competition," which is the legal standard for approving/disapproving mergers.

What's wrong with this picture?

• Broadband is being adopted faster nationally in the US than most any analogous product in modern U.S. history.  
• The U.S. has more facility-based broadband competition than any country in the world.
• The Bush Administration goal of making broadband available to all Americans has been achieved.
• The recent FTC report on Broadband Connectivity said:  "To date we are unaware of any significant market failure or demonstrated consumer harm from conduct by broadband providers."
• "Nearly half of all Americans have broadband Internet connections in their homes, largely because of increasing use among minorities and the poor, according to an annual survey by the Pew Internet & American Life Project. ... Four out of 10 African-American adults have broadband access at home, compared to 15% two years ago."

What's wrong with this picture? Nothing! 

Google tries to maintain that search and display advertising are separate markets and not direct competitors.

It appears Yahoo would beg to differ.

Today's New York Times reported:

• "...Yahoo recently shook up its ad sales force, combining into a single unit its search advertising and display advertising." 

• "Mr. Barry said that the reorganization would probably help Yahoo in the long term, as marketers increasingly want to combine their purchases of search and display advertising." [bold added]

Cesar Conda wrote a great editorial highlighting the "Broadband Triple Threat" National Review Online.

• Its an informative read and dead on.

Please don't miss Holman Jenkin's great Wall Street Journal editorial on Google: "Sort of Evil."

I particularly like his new term for net neutrality/open access regulation: "business model chauvinism." Dead on.

• Google is lobbying for laws and regulations which will advantage their business model and further their dominance of Internet advertising, and also to "block, degrade and impair" any other business model from competing with Google.
• Simply, Google has a very sophisticated strategy to foreclose potential competition to Google.

He also points the spotlight on what Google is really doing in organizing groups to view broadband companies as the big public enemy for things they might do in the future, and how that conveniently distracts people from scrutinizing Google's own increasing dominance of online advertising and the business model of the Internet. 

It didn't take long for the Empire to Strike back! Shortly after the release of Googleopoly, Ed Black, President and CEO of the Computer and Communications Industry Association, which represents Google, put out a critical press release on my Googleopoly white paper entitled:  "Merger Report Unconvincing." 

• As I predicted on my blog this morning:"I expect to be attacked personally for my analysis and conclusions here, just like I was attacked by Bernie Ebbers and WorldCom as "the idiot Washington analyst" for having the audacity to be the only analyst in the country willing to predict, and stick to my guns, that the government would block the WorldCom-Sprint merger."

As expected they tried to discredit the messenger because they don't like the message. Standard operating procedure from my debate opponents.

My detailed analysis over the last several weeks leads me to believe that the FTC is likely to block the Google-DoubleClick merger because it will enable Google to dominate online advertising and dramatically increase the opportunity for market collusion and price manipulation in the market for consumer click data, ad-performance tools, ad-brokering and ad-exchanges.

Antitrust is fact-specific and evidence-driven. To understand the true antitrust outlook for a merger one needs to become familiar with the core facts of the case. To date, media and investment coverage of this merger has been remarkably superficial.

• The executive summary and my new 35-page white paper: "Googleopoly: the Google-DoubleClick Anti-Competitive Case" can be found at Googleopoly.net. An audio file of my conference call on this merger outlook will also be on Googleopoly.net. The analysis and conclusions are driven by pages and pages of facts and evidence.
• The purpose of the paper is to present the detailed case theory, argumentation and evidence of why the merger is anti-competitive and harms consumers, content providers and advertisers.
• The paper:
• Defines the market;
• Explains why Google-DoubleClick are competitors;
• Explains why startups, Yahoo and Microsoft can't compete with Google in search;
• Spotlights the four anti-competitive network effects of the merger; and
• Shows how the merger harms consumers, content providers and advertisers.

I see three big takeaways from my white paper.

First, the more people learn about this merger the more concern they will develop.

You're invited to participate in a conference call Tuesday July 17th at 11 am EST to hear a discussion of, and Q&A on, my new 35-page white paper, entitled:

• "Googleopoly: the Google-DoubleClick Anti-competitive Case;" which will be released publicly at the time of the call at www.Googleopoly.net.

I will explain how a Google Inc. (NASDAQ: GOOG) - DoubleClick merger will facilitate a de facto Internet information access monopoly, substantially lessen competition, and harm consumers, Internet content providers, and advertisers.

FCC Chairman Martin's surprising proposed open access/net neutrality regulations for the 700 MHz auction, threaten to broadly chill the broadband investment necessary to deliver broadband deployment to all Americans.

• Chairman Martin apparently has chosen to abandon over a decade of bipartisan free-market Internet policy and adopt a new more regulatory "managed competition" broadband policy advocated by new House Chairman Ed Markey, who has strongly praised Chairman Martin for his support for net neutrality regulation/open access.
• The real world effect of this unwarranted core policy flip flop is to introduce new and very substantial policy, legal and investment uncertainty into what had been a very stable economic growth environment. 
• Chairman Martin is making the heroic assumption that he can massively interfere with market forces and heavily subsidize untested and likely uneconomic business models with no unintended consequences on investment or economic growth in the critical broadband sector.    

Chairman Martin has now emphatically embraced the core economic principle of former FCC Chairman Reed Hundt's Frontline Proposal (and Frontline's Google gaggle of investors), which is that market forces will not and cannot promote sufficient "competition" so the government must regulate and "manage competition" (i.e. mandate prices, terms and conditions -- either directly or indirectly) to ensure consumer welfare.

CNBC's Larry Kudlow hosted a debate over Chairman Martin's proposed open access/net neutrality regulations for the 700 MHz auction.

Both sides were ably represented:

• John Rutledge of Rutledge Capital took the free market view and
• Gerry Waldron who represents Google and worked for Chairman Ed Markey took the pro-regulation view.

Watch and enjoy!