We think this merger deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market, Microsoft general counsel Brad Smith said in a statement.

AT&T’s senior executive vice president of external and legislative affairs Jim Cicconi told the Reuters news agency: If Google becomes the dominant force in terms of web advertising and becomes the broker, that would be clear evidence of market power and dominant position.

Google wants to combine DoubleClick’s CPM display advertising business with its own pay-per-click search and contextual advertising businesses.

The company believes it can offer advertisers better analytics, tracking and targeting, and that publishers will be able to improve their page monetization.

The $3.1bn price tag, estimated at 20 to 30 times DoubleClick’s annual revenue, was apparently set after Microsoft, widely reported as being in the bidding, balked at such a high multiple.

Google’s win of DoubleClick is a set-back for Microsoft, which could have used a jump-start for its under-performing Adcenter business, which it has placed as a cornerstone of its reinvention as a Live web services provider.

AT&T, which took steps to reclaim its pre-antitrust-breakup carrier dominance with its mergers with SBC and BellSouth, has any number of reasons to be fearful of Google, both as an advertiser and as a service provider.

Microsoft is also playing the consumer privacy card.

This proposed acquisition raises serious competition and privacy concerns in that it gives the Google DoubleClick combination unprecedented control in the delivery of online advertising, and access to a huge amount of consumer information by tracking what customers do online, Smith said.

While Google certainly dominates the search advertising market, there’s less evidence that DoubleClick is dominant in its field. Competitors, some of which are larger than DoubleClick in terms of revenue and market cap, include ValueClick, 24/7 RealMedia and aQuantive.

Nevertheless, Google and DoubleClick are clearly aware that this is the kind of deal that will warrant regulatory review. They don’t expect the deal to close until late in the year, despite the fact that DoubleClick is privately held and, presumably, has less shareholder red tape to cut through.

That said, Google CEO Eric Schmidt said publicly he doesn’t believe the review will be too problematic: We believe the combination brings significant efficiencies to the market and generates significant advertiser and user value. We’re very confident will be approved, he said Friday.

Our View

Chutzpah doesn’t come much thicker than this — the two highest-profile antitrust losers of the last few decades taking a crack at a smaller rival on competition grounds. But displaying hypocrisy doesn’t mean they’re wrong.

Google is already powerful company, and it will only get more powerful. It has a lot of money to throw around, and doesn’t seem to mind throwing around more than is strictly required, if it keeps a competitor from playing catch-up. That’s not a startup’s strategy, it’s the strategy of an incumbent defending a dominant position.

The question is, does the acquisition of DoubleClick make much of a difference to Google’s ability to control the online advertising market? Will it be able to pick winners and losers any more than it can already? That’s a much trickier question, but fortunately it’s a question for regulators, not us.