EC’s Questionnaire 1 on Google/DoubleClick merger

Following press reports of a new questionnaire sent by the European Commission Competition Directorate, we thought we should place here what we believe was the initial survey sent. Eventually, Congress and others will need to investigate how well the FTC conducted its own review of the deal. Frankly, several parties–including commissioners–spoke of their concern that the agency’s loss in Whole Foods and other cases made it more difficult to confront the Google takeover of DoubleClick case. This is an ongoing story. But for now, here’s the questionnaire:

Case COMP/M.4731 – Google/DoubleClick

Questionnaire to Customers 1
Deadline for Reply: 18/10/2007

Google Inc. (“Google”) notified to the European Commission its intention to acquire control of DoubleClick Inc. (“DoubleClick”) by way of purchase of shares. The two parties to the merger Google and DoubleClick are hereinafter collectively referred to as “the parties”. Both are active in the online advertising industry.
Pursuant to the Merger Regulation , the Commission is required to assess the operation’s possible effects on competition within the common market. To this end, the Commission needs to gather relevant information from the parties to the operation as well as from other market operators, such as competitors and customers.
Therefore, your replies to the following questions as well as any other opinion on the effects of the operation you might consider relevant, are of key importance to the investigation. We should also be grateful for any additional remarks you may wish to make relating to the proposed concentration. If you consider that a particular question is not relevant, please indicate this and explain why. Please reply to this questionnaire on behalf of all companies belonging to your group.
When you reply to this questionnaire, please provide TWO versions of your reply: (i) a CONFIDENTIAL version; and (ii) a NON CONFIDENTIAL version which excludes business secrets or other confidential information.

In accordance with the Merger Regulation and in the light of the deadlines which the Commission must respect following the notification of the case, the Commission wishes to have your reply by 18/10/2007.
If you have questions of administrative nature or wish to receive this questionnaire in electronic format, please contact Ms Györgyi Nyiregyhazi (Tel.: +32 2 29 85327, e-mail: gyorgyi.nyiregyhazi@ec.europa.eu) clearly indicating the reference: M.4731 Googkle/DoubleClick – Questionnaire to Publishers.

If you have any further questions on the substance of this request, please contact Mr Bertrand Jéhanno (Tel.: +32 2 29 91048, e-mail: bertrand.jehanno@ec.europa.eu), Mr Carl-Christian Buhr (Tel: +32 2 29 86 033, e-mail: carl-christian.buhr@ec.europa.eu), Mr Flavien Christ (Tel: +32 2 29 90931, e-mail: flavien.christ@ec.europa.eu,), Mr. Peter Eberl (Tel: +32 2 29 60783, e-mail peter.eberl@ec.europa.eu), Ms Vera Pozzato (Tel: +32 2 29 93012, e-mail: vera.pozzato@ec.europa.eu).

Thank you for your help and co-operation.

A. General questions

Please give the contact details of the person responsible for replying to this questionnaire
Company:
Contact person: Phone:
Position: Fax:
E-mail:
Address:
Country:
Company web-site:

Please give a brief description of your organisation, of its size and of your activities. If your company is a subsidiary please indicate the group to which it belongs to.
Description of your organisation:

Please indicate the countries within the EEA in which you are active as online publisher (website owner):

B. The provision of display ad serving, management and reporting infrastructure technology
The provision of display ad serving, management and reporting infrastructure technology could be distinguished according to whether services are provided to advertisers (and agencies) or to publishers (including self-provisioning).
The Commission understands that advertisers create advertisements and upload them onto the advertiser-side ad server. Once a website publisher has agreed with the advertiser (directly or through an ad network or ad exchange) to run the ads on its website, the publisher enters the campaign terms of the ad (location, price, targeting criteria) into the publisher-side ad server. There is then a relationship between the publisher-side ad server – which records the “impression” generated by the user’s visit of the web site and determines the advertiser to call – and the advertiser-side ad server – which chooses the appropriate ad to deliver on the web page. The relationship between the two servers also enables the advertiser to obtain information relating to the user’s online behaviour in the context of the placed ad via browser cookie technology.
1. What is the value of the online advertising revenues generated by your website(s) in Europe?

2. Through which channels do you sell advertising space on your website/s?
Direct sales: YES/NO
And/or
Brokers, intermediaries, ad networks, ad exchanges: YES/NO

3. If you use both the direct channel and the indirect channel (ad network/ad exchange), please indicate (broadly) what % of your online revenues originate from the direct channel.

4. Do you foresee that direct sales of online advertising will decrease in the future in favour of intermediation through ad networks and ad exchanges?

5. Do you foresee that numerous ad networks and ad exchanges will be able to survive in the near future (2-3 years)? Please briefly elaborate.

6. If you use a 3rd party ad serving supplier (e.g. DoubleClick, OpenAdstream, AdManager…): if the price of 3rd ad serving services was to raise by 5-10% (all else equal) would you switch part of your inventory to an integrated network like Google AdSense?

7. Do you consider the cost of switching ad serving technology supplier to be high / moderate / low?

8. If you use more than one supplier of such technology/services, please describe briefly the advantages and disadvantages of such a solution compared to a situation in which only one supplier is used. Please also indicate why your company chose to use more than one supplier for this technology/services.

9. If you only have one supplier for this particular product/service, do you consider it possible/usefull using another supplier for a comparable product/service at the same time? If yes, please name these other possible suppliers. If not, please explain the reason why you choose single homing (e.g. exclusivity clauses, cost saving, quality of service …).

10. Please name other providers of display ad serving, management and reporting infrastructure technology that you consider as competitors of your provider/s at EEA level.

If you sell advertising space through direct sales

11. Which provider/s of display ad serving, management and reporting infrastructure technology is directly supplying your company?

12. Have you ever experienced a switch of supplier for this particular product/service? YES/NO
If yes, please:
explain the reason why you made such experience:
provide the name of your former supplier:
the name of the replacing supplier:
the cost caused by the switch:
the time it took to complete the switch

13. What is the % represented by the cost of ad serving in the total revenue generated by your advertising space? Please provide broad estimates.

If you sell advertising space through brokers/intermediaries/ad networks/ad exchanges
14. Which provider/s of display ad serving, management and reporting infrastructure technology is/are indirectly supplying your company?

15. Have you ever experienced a switch of supplier for this particular product/service? YES/NO
If yes, please:
Explain the reason why you had to switch:
provide the name of your former supplier:
the name of the replacing supplier:
the cost caused by the switch:
the time it took to complete the switch:

16. If you use the indirect channel, what is (a) the % represented by the cost of ad serving in the total revenue generated by your advertising space; (b) the % represented by intermediation fees in the total revenue generated by your advertising space? Please provide broad estimates.

17. If you multi-home, why have you become member of several ad networks?

C. Effects of the merger

18. According to you, is DoubleClick’s large publisher customer base an advantage for the quality of services offered by DoubleClick to publishers? In other words, is there a direct benefit to a publisher to use an ad serving supplier with a larger publisher base? If so, please briefly describe the benefit(s) (e.g. does the ad serving service improves the monetization of inventory if the ad server processes the data on user behaviour accross numerous publishers?).

19. If Google and DoubleClick were to merge, do you consider that integrated networks like Yahoo! (with RightMedia) and Microsoft (with aQuantive) would be able to provide strong competition to Google/DoubleClick? Please briefly elaborate.

20. Would you consider open source ad serving software as a viable alternative to commercial ad serving software? If so would you consider it suitable, in conjunction with a standalone ad network, as an alternative to Google’s AdSense? Please explain.

21. What are, in your view, the main effects of the proposed operation on:
a) your company?
b) the markets for (display and text) ad serving, management and reporting services for publishers?
c) the prices of (display and text) ad serving, management and reporting services for publishers?
Please give reasons for your answers.

22. Do you have any other comments that you wish to bring to the Commission’s attention?

Thank you for your assistance!
Please do not forget to add a non-confidential version to your response.