ITWire

Google announced earlier this week that it would buy DoubleClick for $US3.1 billion. However the New York Times quotes Brad Smith, Microsoft's general counsel, telling it that the purchase would "combine the two largest distributors of online advertising" and thus "substantially reduce competition in the advertising market on the Web."

The NYT claimed that Microsoft, Yahoo and Time Warner had all been bidding to buy DoubleClick but had lost out to Google.

Microsoft's challenge is also being supported by AT&T which fears that a Google-DoubleClick combination could be in a position to pick winners and losers in the distribution of new Web services such as IPTV, many of which are advertising supported. According to Microsoft, A Google-DoubleClick combination would control 85 percent of the market for distributing ads to Web publishers.

The Washington Post also quoted Smith expressing concerns about user privacy under the combination. DoubleClick uses a technology that remembers sites a user visits and serves up relevant ads; Google keeps data about searches conducted on its site.  Smith told the paper that Google would have "an unprecedented degree" of personal information about a person's activity on the Internet.

Google has denied the allegations and has pointed out that these concerns will all be addressed during the normal merger review processes by regulatory bodies in the US and Europe.