You are here June 2008
Submitted by Scott Cleland on Thu, 2008-06-12 13:56
In two speeches this week, Google's CEO illuminated more about Google's master plan to "change the world" -- with minimal accountability.
To be fair, I am connecting two ideas from separate speeches by Google's CEO Eric Schmidt this week, that were shared separately but need to be connected to put them into better context.
Submitted by Scott Cleland on Fri, 2008-06-13 00:34
The new Google-Yahoo partnership to better converge the search and display markets is skating on thin antitrust ice that will only get thinner over time -- unless Microsoft or some unknown competitor somehow starts taking lots of market share from the new Goohoo.
What are the important takeaways here?
First, at core, the Google-Yahoo partnership is clearly about trying to snuff out Microsoft as a competitive force on the web.
Submitted by Scott Cleland on Mon, 2008-06-16 12:54
The reality of market pricing for Internet usage is naturally gaining more attention.
- The New York Time's had an informative Sunday page one story: "Charging by the Byte to curb Internet traffic."
- Today the Wall Street Journal highlighted why market pricing for Internet usage is evolving with dramatic changes in the Internet marketplace in its story today: "Cisco projects growth to swell for online video."
The big economic takeaway here is that in a free market Internet, where users have very different demand: i.e. needs, wants and means for speed, usage, mobility, latency, immediacy, reliablity, flexibility and other attributes -- suppliers (ISPs, application providers and content providers) must have the freedom to innovate, experiment and provide a diversity of choices, at a diversity of prices in order to meet the diversity of demand from users.
The big political takeaway here is that Internet "fairness" is not legislated/regulated net neutrality or a one-tier Internet where all bits must be treated the same and where light Internet bandwidth users must subsidize heavy Internet users -- but real and practical Internet fairness comes from users paying their way, paying for what they use above a certain amount and not expecting others to subsidize one's extreme bandwidth usage.
Submitted by Scott Cleland on Mon, 2008-06-16 16:33
I wrote the anti-net neutrality argument and Professor Lowell Feldman wrote the pro-net neutrality argument for the ABI Telecom Technology Committee newsletter this month for the American Bankruptcy Institute:
Both articles are copied below, mine followed by Professor Feldman's:
Why Net Neutrality is Unnecessary and Bad Policy
Written by:
Scott Cleland
Chairman, NetCompetition.org -- a net neutrality forum funded by broadband companies Washington D.C.
Submitted by Scott Cleland on Tue, 2008-06-17 12:43
To the extent Google and Yahoo's new partnership in search and display advertising diminishes #2 Yahoo's viability to competitively discipline #1 Google's dominance of search and online advertising, online marketers and advertisers need Google-Yahoo to commit to respect a "Marketer Bill of Rights."
- Google-Yahoo jointly control:
- 83% of U.S. search advertising share per eMarketer; and
- 64% of all U.S. Internet advertising revenue per the IAB.
- Google's has ~1,000,000 advertisers in its network, compared to Yahoo's ~300,000 and Microsoft's ~75,000.
Marketer's Bill of Rights for the Google-Yahoo Cartel:
U.S. marketers do not currently enjoy, but should have the right to:
- Competition among application and service providers of search, display and other forms of online advertising.
- Independent third-party oversight, audit and dispute resolution of their auctions, practices, bans, and internal controls.
- Fair representation and truth in advertising through the open, full and public disclosure of all of Google-Yahoo's joint and individual financial conflicts-of-interests.
Submitted by Scott Cleland on Wed, 2008-06-18 14:17
Google took substantial market share from their Internet advertising competitors in 1Q08. Google's U.S. Internet advertising revenue grew ~7% sequentially from 4Q07 to 1Q08, while the Internet advertising revenues of Google's competitors fell ~8% during that same period, per newly released IAB figures and Google's 4Q08 figures.
- Google's Internet advertising dominance appears to be accelerating as all its sequential U.S. growth is coming from competitors' market share -- not from growth in the Internet advertising marketplace -- which appears to be one quarter into a sequential Internet advertising recession.
- More simply, if Google was not able to take substantial sequential market share from its competitors in 1Q08, Google probably would not have grown revenue sequentially in the U.S last quarter.
In 1Q08 Google now controls ~45% of all U.S. Internet advertising revenues, which is up from ~42% in 2007, which is up from 35% in 2006, and which is up from 30% in 2005 -- according to base numbers reported by IAB and Google.
Submitted by Scott Cleland on Thu, 2008-06-19 19:00
I had to chuckle when Google CEO Dr. Schmidt publicly explained his management system for Google last week -- I 've dubbed it -- 'The One Sentence Manager.'
- In a speech to Washington insiders at the Economic Club where Dr. Schmidt exhorted how the world could learn a lot from Google's "scalable values"...
- Dr. Schmidt actually admitted how hard it was to get Googlers to be accountable to his minimalist automated reporting requirement of writing a one-sentence summary by email of what that person did that week.
- He further explained that his automated system would "harass" the people with ever increasingly funny prods -- until they complied.
Anyone who reads my blog regularly knows one of my pet beefs about Google is how completely unaccountable Google is and how they go out of their way to remain unaccountable to anyone or anything.
Submitted by Scott Cleland on Fri, 2008-06-20 13:03
Google AdWords announced a new net neutrality double-standard that may also be an anti-competitive practice, in that Google will start discriminating against slower-loading websites by charging them higher prices.
Submitted by Scott Cleland on Mon, 2008-06-23 12:21
Submitted by Scott Cleland on Mon, 2008-06-23 13:32
In thinking about my recent post about how Google Adwords now formally discriminate against slower-loading sites by raising their minimum bidding price, I realized that small businesses and the "long tail" are probably most hurt the most by Google's new "quality score" policy.
- As I previously explained, Google has a subjective, non-transparent, non-auditable, or non-appealable "quality score" variable whose purpose is to maximize Google's revenue -- not to award the keyword to the highest bidder.
This new Google policy discriminates most heavily against small businesses because they:
- Have relatively the least resources, time and ability to technologically redesign their website to adapt to Google's arbitrary changes; and
- Are least able to afford adapting their business model to Google's favor -- away from slower-loading display ads -- to faster-loading search ads.
Bottom line: Google is well aware that small or "long tail" businesses, for all practical purposes, have no other comparable choice for online advertising, so they believe they can safely exert their market power here with impunity.
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