The EU Approves Google's DoubleClick Deal. Yahoo Needs To Pick a Partner Fast.

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The last barrier to Google’s year-long quest to buy DoubleClick has been removed. The European Union’s antitrust regulator has approved the $3.1 billion deal “without conditions.” Word of the impending approval got out last week.

Now Google can move seriously into the part of the online advertising business it doesn’t control: display ads. The vigorous objections of Google’s competitors Microsoft and Yahoo may have delayed the approval, but ultimately the European Commission didn’t buy the arguments.

Interestingly, the commission seemed to ignore the possibility of Microsoft buying Yahoo, or Yahoo merging with AOL. According to CNNMoney:

The commission said it found the merged entity would not have the ability to engage in strategies aimed at marginalising Google’s competitors, mainly because of the presence of credible ad serving alternatives to which customers can switch, in particular vertically integrated companies such as Microsoft Corp , Yahoo! Inc, and Time Warner’s AOL.

But what happens when those credible alternatives go through their own consolidation in reaction to the Google-DoubelClick combination? Whether Yahoo merges with Microsoft or AOL, there will soon be one less major competitor. It seems odd that the European Commission would not take that into consideration, even if any such deal remains uncertain.

Yahoo had better decide quickly what it wants to do with its future because its comfortable position as the leader in display advertising is about to come under some major pressure from Google.

Update: A few hours after the EU approved the deal, Google CEO Eric Schmidt announced that the acquisition is now complete. That was fast. In his note he hints at headcount reductions that will be in store—a nod to Wall Street, no doubt.

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