I had an interesting call today with Brad Smith, the general counsel of Microsoft. I was eager to understand Microsoft's position on the Google/Doubleclick deal, and to parse the issues swirling around the companies decision to, via the press, declare that the deal should be scrutinized closely by antitrust…
I had an interesting call today with
Brad Smith, the general counsel of Microsoft. I was eager to understand Microsoft’s position on the Google/Doubleclick deal, and to parse the issues swirling around the companies decision to,
via the press, declare that the deal should be scrutinized closely by antitrust regulators here in the US.
The conversation started with Smith explaining why Microsoft sees this as worthy of a serious review. At its heart, he contended, this is about how one might define the market in which the combined company will operate. Antitrust law, he explained, takes a dim view of companies who buy their way to market domination using cash alone. It’s fine to gain market domination by having better products and service, but not by simply buying your way in. So, does buying Doubleclick mean market domination? That question turns on whether a market is narrowly defined – is the market in this case online display advertising and online contextual advertising, or is it more broadly defined – the entire advertising marketplace?
This is not a minor question. The former is a market in the tens of billions, the latter hovers at a trillion dollars. When I asked Eric Schmidt of Google this question onstage earlier this week, he was very clear in his interpretation. After rolling his eyes at the very idea of Microsoft – star of the antitrust stage in the late 90s – even playing the antitrust card, he very clearly stated that the combo of Google and Doubleclick was a tiny percent of the overall advertising world.
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