The Net’s “Long-Tail”–a Leash Controlled by Two Giants & FTC Bungles Merger Review

Just a few added thoughts on the proposed Microsoft-Yahoo! deal. We think there needs to be real soul-searching by Congress and the FTC on how it addressed the Google/DoubleClick deal and the related spate of new media mergers in 2007. We told both Hill leaders and the FTC that they needed to explore the larger dimensions of this deal–including its impact on the diversity of online publishing (that’s because whomever controls the “monetization” engine of the online ad biz becomes the critical controller). When Microsoft, Yahoo!, Time Warner and the others went on a post GoogleClick shopping spree, we said the FTC should reject these mergers until they had examined the entire online ad market. But the commission failed to do so, in our opinion.

So now as a proposed Yahoo! takeover by Microsoft is considered, one serious concern is that a merger brings with it newly acquired assets that further add to concerns over consolidation and data privacy. The FTC approved without safeguards the $6 billion takeover of aQuantive by Microsoft. The FTC approved without safeguards the takeover by Yahoo! of behavioral targeting ad network Blue Lithium. The FTC approved without safeguards Yahoo!s acquisition of online ad exchange (and data collection system) known as Right Media. There have been other purchases as well by the two companies.

Congress will need to investigate the implications to both competition and consumer privacy: neither the FTC nor DoJ can be trusted to address these concerns. There are also human right issues, given Microsoft’s own work in China. We will be following this deal closely, including examining the implications of a Yahoo!-Microsoft digital combine.

Author: jeff

Jeff Chester is executive director of the Center for Digital Democracy. A former journalist and filmmaker, Jeff's book on U.S. electronic media politics, entitled "Digital Destiny: New Media and the Future of Democracy" was published by The New Press in January 2007. He is now working on a new book about interactive advertising and the public interest.

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