Top execs from recently-acquired interactive ad industry firms purchased by Google, Microsoft, WPP and Yahoo engaged in friendly sparring yesterday. During a panel discussion at the Interactive Advertising Bureau’s MIXX conference in New York, heads of 24/7 Real Media, Atlas, DoubleClick and Right Media talked, sometimes surprisingly frankly, about industry consolidation, potential blockage of Google’s DoubleClick acquisition, and potential conflicts of interest resulting from this year’s million and billion dollar buyouts.
When all four panelists were asked whether U.S. and European regulators should investigate Google’s proposed purchase of ad management firm DoubleClick, each weighed in, with considerable discretion.
Choosing his words wisely, Michael Walrath, founder and CEO of Right Media, said the deal is “naturally something regulators should take a look at.” Right Media, potentially a direct competitor of a DoubleClick Web ad exchange, was bought by Yahoo for $680 billion in April. Microsoft also purchased ad exchange AdECN in July.
In the midst of an ongoing Federal Trade Commission investigation into the Google’s DoubleClick buy and outcries from privacy watchdogs regarding that and other recent deals, the U.S. Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights will hold a hearing Thursday to analyze the Google buy as well as the online ad industry in general.
Karl Siebrecht, president of ad management firm Atlas, a division of new Microsoft subsidiary Aquantive, also remained fairly vague, suggesting, “There are implications to any sort of market concentration,” in any industry or marketplace. Microsoft’s $6 billion acquisition of Aquantive was approved by the FTC in April. Microsoft has been vocal about its opposition to Google’s DoubleClick acquisition, suggesting it raises competition and privacy concerns.
Though he later referred to Google as “the new Microsoft,” and a company that would have trouble maintaining its former reputation as a neutral player in the online ad industry, 24/7 Real Media Chairman and CEO David Moore also was relatively reserved in his response to the investigation inquiry. “The deal ought to be approved, with a certain set of restrictions,” he said, noting the FTC could “perhaps restrict [Google’s] free market abilities.” The 24/7 Real Media network was acquired by ad agency WPP for $649 million in May.
In response, Doubleclick CEO David Rosenblatt stressed the company’s clients own their data, not DoubleClick or Google. “It’s unlikely that any M&A activity would change that,” he said, adding in an obvious reference to his fellow panelists, “We’d lose customers to anyone waiting in the wings to take them.” The notion that Google’s acquisition would create less competition “stretches common sense.” Rosenblatt continued.
All four acquisitions the panelists are affiliated with, however, have spawned speculation regarding potential stifling of competition and conflicts of interest. For example, some worry that ownership of ad exchanges by Yahoo, Microsoft and Google could result in ad price manipulation. “It becomes hard for me to imagine how these exchanges don’t become self-fulfilling prophecies for the media companies,” said 24/7 Real Media’s David Moore.
Walrath, CEO of Yahoo’s new ad exchange Right Media, responded there is “really no way to take advantage of the marketplace” because all Internet impressions are tracked.
Encapsulating the awkward yet civil atmosphere of the high-powered panel, Moore answered, “I would say the same thing if I were Mike.”