(12-20) 06:53 PST WASHINGTON (AP) —

U.S. antitrust regulators approved Google Inc.’s $3.1 billion purchase of DoubleClick Inc., clearing the way for a formidable combination in the burgeoning online advertising sector.

“After carefully reviewing the evidence, we have concluded that Google’s proposed acquisition of DoubleClick is unlikely to substantially lessen competition,” the Federal Trade Commission said Thursday in a statement.

Despite the FTC’s go-ahead, the transaction still faces substantial antitrust scrutiny in Europe, and Google has said that it won’t close the deal before it has clearance from European regulators. The European Commission has set a deadline of April 2 to complete its review.

The deal, announced in April, will combine Google’s leading position in online text ads with DoubleClick’s ad-serving tools that help publishers place and track display ads.

Microsoft Corp., AT&T Inc. and other critics have argued the transaction would give Google a dominant share of the rapidly growing online advertising market. Google contends its business doesn’t overlap with DoubleClick’s and as a result a combination won’t reduce competition.

Privacy advocates also strongly opposed the deal because the combined company would hold an unprecedented amount of data on individual Web surfing habits. The FTC said it lacked the legal authority to block the deal on any grounds except on antitrust matters.

The five-member commission voted 4-1 in favor of the deal. Commissioner Pamela Jones Harbour dissented “because I make alternate predictions about where this market is heading, and the transformative role the combined Google/DoubleClick will play if the proposed acquisition is consummated.”

Online ad spending is projected to reach $21.4 billion this year, according to research group eMarketer, surpassing the $20.5 billion radio advertising market for the first time. EMarketer expects online ad spending to nearly double to $42 billion in 2011.

The size of the market and Google’s bid for DoubleClick has spurred other purchases. Microsoft agreed to pay $6 billion for Seattle-based online advertising firm aQuantive Inc. earlier this year, and Yahoo Inc. bought Internet advertising exchange Right Media Inc. for $680 million in April. London-based advertising giant WPP Group PLC purchased online advertiser 24/7 Real Media for $649 million in May, while Time Warner’s AOL bought Tacoda for an undisclosed amount in July.

Shares of Google added $5.88 to $683.25 in morning trading.

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AP Business Writer Dan Caterinicchia in Washington contributed to this report.

(12-20) 06:41 PST NEW YORK, (AP) —

Discover Financial Services LLC posted a loss in the fourth quarter as the credit card issuer took a $391 million charge because of its struggling card business in Great Britain.

Discover reported a net loss of $84.1 million, or 18 cents a share, for the September-November period. The company reported a profit in the same period last year of $186.5 million, or 39 cents a share.

The company warned earlier this month that it would be hit by a big impairment charge because of Goldfish, its troubled Visa and MasterCard credit card business in the United Kingdom, where the consumer credit environment became shaky well before the U.S. housing slump.

Excluding the Goldfish charge, Discover said income rose 4 percent to $195 million, or 40 cents a share. As opposed to many U.S. companies with international operations, Discover’s domestic segment fared much better than its business abroad. In the United States, pre-tax income for the fourth quarter jumped 43 percent to $328 million, as the company cut costs and saw managed loans rise 5 percent.

Revenue, net of interest expense, came to $1.35 billion versus $1.21 billion in the same quarter last year.

Analysts surveyed by Thomson Financial, who typically exclude one-time charges in their forecasts, had predicted earnings of 36 cents a share on revenue of $993.7 million.

Shares rose about 3.8 percent, or 60 cents, to $16.49 at the open of trading.

Discover lifted its loan loss provisions by $339.9 million Д up from $239.7 million in the fourth quarter a year ago, and up from this year’s third quarter.

So far this year, industry data shown some credit deterioration in the cards segment, but not much beyond what was to be expected after years of better-than-normal conditions. Discover attributed its provision boost to “a trend of more normalized levels of bankruptcy charge-offs compared to the unusually low levels in 2006, and a higher level of loans retained on the company’s balance sheet.”

Several analysts have said, though, that current mortgage credit problems are starting to spill into cards. In 2008, homeowners’ inability to pay their mortgages and get home equity loans could significantly boost delinquency and charge-off rates in card payments.

The delinquency rates in Discover’s U.S. segment were higher in the fourth quarter than they were in the third quarter and during the same period a year ago. Its charge-off rate was also worse than it was in the third quarter, but lower than it was a year ago.

Discover made its public trading debut July 2 on the New York Stock Exchange, after spinning off from Morgan Stanley just a few weeks before the financial sector started plunging due to soaring foreclosure rates and a freeze-up in the credit markets.

The Riverwoods, Ill.-based company’s stock has dropped more than 40 percent from a high of $29.15 on its first trading day.

Discover’s full-year net income for 2007 was $561 million, down from $1.08 billion in 2006. Excluding the Goldfish charge, net income for this year came to $840 million.

Discover, a 21-year-old brand that now has more than 50 million card holders, also operates the Pulse ATM and debit network.

WASHINGTON—The economy nearly stalled in the first quarter with growth slowing to a pace of just 0.6 percent. That was the worst three-month showing in over four years.

The new reading on the gross domestic product, released by the Thursday, showed that economic growth in the January-to-April quarter was much weaker. Government statisticians slashed by more than half their first estimate of a 1.3 percent growth rate for the quarter.

The main culprits for the downgrade: the bloated trade deficit and businesses cutting investment in supplies of the goods they hold in inventories.

For nearly a year, the economy has been enduring a stretch of subpar economic growth due mostly to a sharp housing slump. That in turn has made some businesses act more cautiously in their spending and investing.

The economy’s 0.6 percent growth rate in the opening quarter of this year marked a big loss of momentum from the 2.5 percent pace logged in the final quarter of last year.

Federal Reserve Chairman doesn’t believe the economy will slide into recession this year, nor do Bush administration officials. But ex Fed chief Alan Greenspan has put the odds at one in three.

The first-quarter’s performance was the weakest since the final quarter of 2002, when the economy recovering from a recession. At that time, GDP eked out a 0.2 percent growth rate. Economists were predicting the first-quarter performance this year would be downgraded, but not as much as it did. They were calling for a 0.8 percent growth rate pace.

GDP measures the value of all goods and services produced in the United States. It is considered the best measure of the country’s economic fitness.

Many economists believe the first quarter will be the low point for this year. They expect growth will improve but still be sluggish.

The National Association for Business Economics predicts the economy will expand at a 2.3 percent pace in the April-to-June quarter.