Google-Doubleclick deal seen winning approval

By Diane Bartz

WASHINGTON (Reuters) - Antitrust experts predict that Google Inc's purchase of advertising company DoubleClick for $3.1 billion will be approved by U.S. regulators despite vehement opposition from competitors Microsoft Corp and Yahoo Inc.

While Google's rivals argue that the merger poses antitrust and privacy concerns, experts say advertising remains a big market and Internet advertising is wide open for new entrants. Privacy, they add, is not a core antitrust concern and regulators were unlikely to consider it when evaluating the merger.

Mark Kovner, an antitrust lawyer with Kirkland & Ellis, said the Federal Trade Commission was not inclined to block vertical mergers, which are usually the combination of two companies producing different goods or services for the same product.

"The agencies have been looking at head-to-head competition," Kovner said, adding that putting search engine advertising into a separate market "seems like a jury-rigged market definition. To the outside observer it seems like advertising is a big wide open field."

Google stores data on the Internet-surfing habits of users and uses it to make money selling ads. DoubleClick connects ad agencies, marketers and Web site publishers.

Steven Sunshine of Skadden Arps Slate Meagher and Flom LLP said privacy concerns about the merger were irrelevant.

"What we're really talking about is Internet advertising. The companies are in a slightly different space. The field is too open, and there are too many competitors," Sunshine said.

"It is being reviewed by an administration that has been less aggressive than past administrations in challenging mergers," he added.