FTC backs Google in $3.1 billion deal

WASHINGTON — With U.S. antitrust clearance for its DoubleClick purchase, Google's focus now turns to European regulators, who are expected to be more critical of the top search engine linking up with a market leader in online advertising.

The proposed $3.1 billion transaction, which is strongly opposed by privacy advocates, cannot be completed without approval from the European Commission, whose review deadline is April 2.

The Federal Trade Commission said that the deal won't significantly lessen competition in

the online advertising market, rebuffing complaints from Microsoft Corp. and AT&T Inc. that it would give Google a dominant position.

"The FTC's strong support sends a clear message: this acquisition poses no risk to competition and will benefit consumers," Eric Schmidt, Google Inc.'s chief executive, said. "We hope that the European Commission will soon reach the same conclusion."

The European Commission declined to comment on the FTC's decision, spokesman Jonathan Todd said.

The FTC's approval of the deal without conditions could push European regulators to take a tougher line, says Rebecca Arbogast, an analyst at Stifel Nicolaus.

For example, they could restrict the ability of the two companies to share the market data they collect or require the combined company to sell off certain assets, analysts have said.

But Arbogast believes Europe will ultimately approve the deal, noting that Google could benefit from the fact that Microsoft has had significant antitrust problems in the EU.

"With enemies like Microsoft, you don't need friends when you're in Europe," Arbogast said.

In addition to selling text ads on its own Web site, Google acts as an intermediary, selling ads through its AdSense network to thousands of online publishers, from small Web sites such as AsktheBuilder.com to large media companies like the New York Times Co.

DoubleClick Inc., meanwhile, helps publishers place and track display ads. Oppenheimer & Co. says DoubleClick, with 40 percent market share, is the leader in display advertising technology and services.

Microsoft and other critics argue the deal would enable Google to dominate two aspects of the Internet advertising market — ad sales and ad-serving tools.

The FTC said in a report on its investigation that both the online ad sales and ad-serving markets have numerous competitors, several of which have been bolstered by recent acquisitions.