Google expanded its power in online advertising on Tuesday when it completed its takeover of DoubleClick, a move which increases the pressure on rival Microsoft to win its hostile bid for Yahoo.
The merger of the world's top online search firm with the industry leader in matching ads to people's Internet activities came after European regulators signed off on the deal and strengthened Google's domination of the lucrative online ad business.
"We are thrilled that our acquisition of DoubleClick has closed," Google chairman and chief executive Eric Schmidt said in a written statement shortly after European antitrust regulators cleared the deal. "Google now has the leading display ad platform."
The European Commission said an investigation opened in November concluded that the transaction "would be unlikely to have harmful effects on consumers."
US regulators approved the deal last year.
Google ended a bidding war with Microsoft last April by agreeing to pay US$3.1 billion to add DoubleClick to its Internet money-making arsenal.
Google's DoubleClick purchase is likely among the reasons Microsoft is now trying to buy Yahoo for US$44.6 billion in cash and stock, analysts said.
Microsoft opposed Google's purchase of DoubleClick and says it wants to combine resources with Yahoo to battle Google's dominance on the Internet.
"It is hard to see how Microsoft's original acquisition effort or idea was not somehow predicated on the belief Google would acquire DoubleClick," Cantor Fitzgerald analyst Derek Brown said. "It doesn't seem to be a wild card in the equation."
Yahoo's board of directors rejected Microsoft's Feb. 1 offer, saying it undervalues the California company.
Microsoft is reportedly scheming to replace the incumbents with board members that would approve the takeover.
"Google owning DoubleClick does increase the pressure on Microsoft to close the deal with Yahoo, absolutely," Enderle said.
DoubleClick "is the most powerful company in its space," using online behavior tracking to target people with online ads, Enderle said.
Regulators on both sides of the Atlantic said they did not take into account the impact on privacy of the takeover because they are legally required to focus on competition.
In December, US Federal Trade Commission members voted 4-1 to refrain from blocking the deal and said Google and DoubleClick "are not direct competitors in any relevant antitrust market."
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