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Google and DoubleClick in Web ads double bill

Latest update : 2008-03-12

The EU competition watchdog has cleared the way for Google's takeover of online advertising specialist DoubleClick. The US web giant can now add European markets and state-of-the-art video ads to its portfolio.

After a thorough search, European regulators say they’ve found no compelling reason to thwart Google’s $3.1 billion acquisition of online advertising specialist, DoubleClick.


The verdict from the European Commission’s antitrust watchdog, Nellie Kroes, comes three months after US authorities gave their blessing to the deal.


It means that Google, a Goliath among search engines, can now forge ahead in the $37 billion (and growing) online advertising market.


Google is already the global go-to engine of choice for all manner of web searches. It accounts for nearly 60 percent of all US-based searches, and 80 to 90 percent of those in Europe, according to the New York Times, which notes that Google makes much of its money from small text adverts that appear in the margins alongside a user’s search menu.


What DoubleClick offers is a more elaborate platform for Internet advertisers, one that moves beyond mere text into the realm of advertising banners and video animation.


According to early reports, the EU concluded that Google's merger with DoubleClick would not harm competition since both companies perform markedly different functions.


The regulators also found that enough rivals – from Microsoft to Yahoo to AOL – exist to provide a plausible alternative to advertisers.


Others note, however, that the EU approval of the Google deal could furnish Microsoft with fresh ammunition in its uphill battle to acquire Yahoo – a bid aimed at expanding its own online advertising presence.


Microsoft is still smarting from a 900 million euro fine recently imposed by the EU for abusing its dominant market position.

A European rival to Google ?

It is perhaps no coincidence that the Europeans have been hard at work, on another front, promoting what they envisage as a homegrown rival to Google.


It’s dubbed Quaero, or ‘I Search’ in Latin. What its French-led backers are searching for is clear: a way to stop, or at least slow down, the Google juggernaut.


The EU yesterday approved €99 million in French state aid for Quaero – about half its estimated development costs over five years - to get the project off the ground.


That's been a rather tall order since former French president Jacques Chirac first proposed the idea of a European search engine, to much ballyhoo, in 2005.


The project involves some 23 companies, led by France's Thomson. But it has often seemed on the verge of foundering due to divergent approaches, especially among some of the French and German partners.


Several German collaborators abandoned the project in 2006 - to join a rival vision in Germany, called Theseus.


For the time being, Quaero's search for viability is far from over.

Date created : 2008-03-12