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Microsoft-Aquantive increases Google-Doubleclick antitrust focus

I believe Microsoft's purchase of Aquantive will have the effect of increasing antitrust scrutiny of Google-DoubleClick.

  • Listen to this quote in today's Investor's Business daily in an article by Patrick Seitz "In ads, Microsoft chooses a $6 Bil Buy-in":
    • "Microsoft believes consolidation in the ad sector will continue and that there ultimately will be only two meaningful companies in online advertising, says Matt Rossoff, an analyst at independent research firm Directions on Microsoft."

Let me count the ways that quote gives antitrust authorities the willies:

  • First it is their job to not allow industries to become duopolies or acquire market power through acquisition. If that occurs naturally, it is not a problem, but "acquiring" market power is illegal.
  • Second, Microsoft, an expert in market power, is reportedly the one that sees this market trending to two players.
  • Third, to the extent that most all of the business model of the Internet is being driven by the advertising model and Google's spectacular success at that model, Microsoft is indicating that the Internet business is destined to be controlled by two entities that the Government allowed to consolidate.

I can hear the Antitrust authorities sharpening their pencils and flexing their mouse clicking fingers now.

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