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not purchase a display ad serving solution at all or because they would rather purchase an alternative display ad serving solution.

348.

As margins on DFA and DFP are low compared to margins on Google's

direct sales of search ads and intermediated sales of (search) ads, even small volume losses in search advertising and (search) intermediation would outweigh the gain in profits from customers taking up DFA or DFP.

Publisher side

349.

On the publisher side, Google's 2006 average revenues (net of traffic

acquisition cost (TAC)) from those […]* publisher customers which make use of both DFP and Google's ad intermediation services for the sale of search ads (i.e. AFS partners) were around EUR […]*, whereas DoubleClick's average revenues from these overlapping publisher customers in 2006 was only around EUR [less than 1% of this figure]*. In other words, the merged entity would need to gain more than 35 bundled publishers (which did not use DFP previously) to compensate the loss in search ad intermediation revenues caused by only one publisher refusing the bundle.

Advertiser side

  • 350.

    On the advertiser side, the disincentive for the merged entity to engage in the described bundling strategy is comparable. Whereas Google's 2006 average revenues from those […]* advertiser customers which use DFA and also purchase search ads from Google (either directly or through intermediation) was around EUR […]* million, DoubleClick's average revenues from these overlapping advertiser customers in 2006 was only around EUR [less than 5% of this figure]*. This means that the merged entity would need to gain more than 20 bundled advertisers (which did not use DFA previously) to compensate the loss in search ad and search ad intermediation revenues caused by only one advertiser refusing the bundle. Similar figures would apply, if the bundle were limited to direct sales of search ads on Google.com (thus excluding intermediated sales).

  • 351.

    Another hypothetical bundle would include DFA and only intermediated sales of (search) ads, but no direct sales on Google.com. Under such a strategy, the merged entity would force its AdWords customers to opt out of AFS179, unless they also purchase DFA for use both with Google and third parties. Even though the revenues that Google generates from certain groups of intermediation customers on the advertiser side do not differ significantly from DoubleClick's average DFA net revenues, it is unlikely that the merged entity would have an incentive to impose this limited bundle. The majority of advertiser spending on AdWords is accounted for by ads appearing on Google.com, with AFS ads accounting only for around [<10%]* of advertiser spending. Currently, most advertisers purchasing AdWords choose not to opt out of AFS because there is no significant extra cost allowing ads to be displayed on AFS. However, this would change if the merged entity imposed the condition that any advertiser wishing to allow their ads to be displayed on AFS, in addition to Google.com,

Google's search intermediation services offered to advertisers through AdWords.

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