In entering the web measurement business for free, Google is literally killing many birds with one stone -- ComScore, Nielsen, Google's third party accountability, and any notion that Google does not have a badly conflicted business model.
The Wall Street Journal article by Emily Steel: "Google to offer tool to measure web hits" is a solid and illuminating article that starts to get at the serious conflicts of interest at work here.
First, did any of you connect the dots that Google's press leak crushed ComScore's stock today (which is down over 20% at this writing) ... the same ComScore that investors used to drive Google's stock down in 1Q08 out of fear that click rates were down with the economy?
- Could this in part be payback for an upstart having the gall to mess with Google's emminent domain?
- Regardless of Google's motives -- this looks really bad and underscores that there is no adult supervision or accountability at Google in new product or service launches.
- Innovation without permission in this instance looks like it could be predatory retaliation for providing third-party accountability to Google that the Google brass did not appreciate.
Second, why this announcement troubles so many people, as the article above mentions, is that people intuitively understand problematic conflicts of interest, even if they can't exactly explain the problem.
- As the first expert witness to testify before Congress on what went wrong with Enron, I have seen this type or conflicted arrogance and lack of accountability before.
- The conflict of interest problem of Google giving a free measurement tool (using its own secret data that it shares with no one) is that it will effectively wipe out a market segment that well serves consumers, investors and companies -- because this competitive segment gives an independent and competitive third party check on Google's ever increasing market power.
- Google is not competing with ComScore or Nielson, but trying to turn the web measurement segment into a 'free' no profit zone where competitors cannot survive for long.
- 'Free' in this instance may be predatory pricing and predatory cross subsidization.
Finally, Google, in trying to be the penultimate "one-stop-shop" ad provider is a veritable rats nest of conflicts. What Google is doing is akin to:
- Trying to be a one stop shop for Justice, where Google gets to play witness, prosecutor, judge and jury all at the same time!
- Trying to be a one-stop-shop for education where Google gets to take the test, be the grader of the test and be the review board which hears the appeal for an unfair test!
- Trying to be a one-stop-shop for originally rating subprime mortgage derivatives while also tracking, measuring, and monitoring their continued viability... we know where that lack of third party accountability left the housing sector and the economy...
- Get my drift...
Google-DoubleClick, which has the largest trove of private user behavior on the Internet, by orders of magnitude, is now asking for everyone to trust it completely to measure the data honestly, at the same time it has chosen an anti-competitive 'free' model to crush any independent third-party verification of their data or their "measurement."
- For those of you who didn't know, or don't remember, the Enron scandal happened because one, and only one company, had the data, measurement and reporting of the "fiber broadband futures" "marketplace" that had no independent third-party accountability to prevent it from abusing conflicts of interest or to detect fraud.
- I am not saying Google is engaged in fraud here; what I am saying is that whenever an entity has no independent third-party accountability to keep it honest, and the business model favors crossing the line...lines inevitably get crossed -- and the average consumer is the one who gets hurt most in the messy aftermath.
- Google's rats nest of conflicts is screaming for independent third-party accountability through real and fair competition from companies like Comscore or Nielson.
