FTC to Review Yahoo and Microsoft Ad Deals

Acquisitions Will Be Scrutinized Along With Google-DoubleClick

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NEW YORK (AdAge.com) -- The Federal Trade Commission will review three of the major internet ad acquisitions of late, according to a person with knowledge of the deals.

The FTC will review Microsoft's proposed $6 billion acquisition of aQuantive and Yahoo's $680 million purchase of the 80% of Right Media.

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That the FTC would handle Microsoft's proposed $6 billion acquisition of aQuantive and Yahoo's $680 million purchase of the 80% of Right Media it didn't already own was first reported by The Wall Street Journal. The FTC or the Department of Justice reviews virtually every major transaction, part of what is called the Hart-Scott-Rodino process. In some cases, they issue a "second request" for more information -- meaning they will take a much deeper look into the acquisition.

It's unclear whether the FTC has sent either Yahoo or Microsoft a second request. The agency already has issued a second request to Google in response to its $3.1 billion bid for DoubleClick.

'Normal procedure'
"It is normal procedure for any acquisition of this size to go through Hart-Scott-Rodino review," a Yahoo spokesman said. "As we have stated previously, Yahoo views the acquisition of Right Media as an important step in building an effective, open digital-advertising and -publishing ecosystem." He declined to comment further. Microsoft didn't comment.

In evaluating all the acquisitions, the commission will need to determine the markets in which the companies are operating. It's not clear whether the FTC will consider only online, third-party display advertising or the much broader and bigger advertising market. FTC hearings are closed to the public and often require laborious information gathering on behalf of the companies making the acquisitions.

As Ad Age previously reported, two major advertising-industry associations wrote a joint letter to the FTC and the Justice Department urging them to take a "careful, wide-ranging and comprehensive perspective" and evaluate the recent mergers-and-acquisitions activity in the online-advertising space.

Deals 'deserve careful scrutiny'
"During the past month, there have been several major acquisition announcements in the online-advertising marketplace," said the joint letter from the American Association of Advertising Agencies and the Association of National Advertisers. "These mergers, if approved, certainly would change the online-advertising marketplace. As such, those proposed combinations deserve careful scrutiny. It is essential to ensure that none of these combinations restrict competition in the internet-advertising marketplace."

It continued: "Advertising on the internet is one of the fastest-growing sectors of marketplace promotion; therefore, ensuring its competitiveness is critical for all participants."

In the flurry of acquisitions, WPP Group announced a planned buyout of online-advertising company 24/7 Real Media for $649 million. It's not clear whether the FTC will look at that case.
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