US Congress to Investigate Google Purchase of DoubleClick

The US Senate Judiciary Committee will hold a hearing in September in which it will grill Google executives about the company's planned purchase of DoubleClick. As with other inquiries into this potential purchase--the US Federal Trade Commission (FTC) and European Union are both investigating as well--the hearing will seek answers on the anti-competitive and privacy issues the deal raises.

Privacy advocates and competitors have argued that the combination of Google and DoubleClick would effectively eliminate competition in the online advertising space. Google currently dominates search-based advertising, while DoubleClick is the largest player in traditional banner ads and other forms of Web advertising. The online ad market was worth $17 billion in 2006 in the US alone, and is of course growing each year.

Google argues that the online advertising market is highly competitive and that the purchase should be approved because Google doesn't directly compete with DoubleClick. "We are confident that this acquisition poses no risk to competition and should be approved," a Google spokesperson said. Competitors such as Microsoft and Yahoo! disagree, and in the wake of the Google/DoubleClick announcement, each has purchased minor players in DoubleClick's market in order to defend themselves against the possible purchase. Microsoft, for example, spent a whopping $6 billion on a company called aQuantive.