WSJ "Googling 'Monopoly' Op-Ed Superficial

Google must be worried about their Doubleclick acquisition having arranged an op-ed in the Wall Street Journal today entitled Googling 'Monopoly' by PFF President Tom Lenard and Emory University professor Paul Rubin.

• While Google must be thankful for the placement in the WSJ, they have to be bummed about the unfortunate title.
  • Google loves to generously slather the "opoly" epithet on any formidable competitor who is in their way, so it must drive them crazy when it sticks to them in the WSJ.

First, let me say that I genuinely respect Mr Lenard and Mr. Rubin, and understand that on antitrust issues, analysts can honestly disagree on outcomes and impacts.

Second, let me say that I originally agreed with their conclusion that the FTC was unlikely to find sufficient harm to block the Google-DoubleClick merger.

• My original blog/analysis of the proposed merger immediately following its announcement and my white paper entitled: "How Google-DoubleClick is exploiting the weak underbelly of antitrust law to dominate Internet advertising going forward" both concluded like Lenard/Rubin that the FTC would approve the Google-DoubleClick merger.

Third, let me remind everyone that antitrust is fact specific. The outcome of every case is highly dependent on the facts of that particular case.

• My views changed completely when I delved deeply into the facts of this particular case.
• I produced and published a 35 page detailed analysis entitled "Googleopoly: The Google-DoubleClick Anti-competitive Case" which can be downloaded at www.Googleopoly.net.
• What I learned from my 9 week in depth investigation and analysis as one of the leading antitrust analysts in the nation, was simply that the facts of this case are not Google's friend.
  • The more one learns about the facts of this particular case the more anti-competitive concern that arises.

With all due respect to Mr. Lenard and Mr. Rubin's expertise and sincerity, it appears from a close reading of their WSJ op-ed that they either did not read my analysis or chose to ignore it because it is hard to refute.

• They claim in their op-ed that "those who complain about Google's purchase of DoubleClick make two claims. Both are flawed." One of the claims is privacy which I do not focus on.
• So I surmise that the other part of the analysis is supposed to address the camp that my analysis falls under.
  • I note that only one of ten paragraphs of the op-ed were devoted to trying to debunk the anti-competitive case and frankly that analysis was superficial and thin.

Mr Lenard and Mr Rubin assert that "the flaw is that the two companies undertake activities that do not overlap."

• That is where the facts will be highly problematic for Google.
  • The facts are that advertisers, Google, and Google's competitors, all know that search and display are extremely related and synergistic -- i.e. the single most effective way to enhance the performance of Google's pay to click business model is through targeted display advertising like DoubleClick does.
  • I explain on pages 25-27 of my white paper the specific anticompetive effects of the merger resulting from their market "overlap."
  • I explain on pages 5-8 of my white paper specifically why they are overlapping in the same relevant market.

Mr. Lenard and Mr. Rubin go on to assert that Google "creates no ads and controls no websites."

• The facts will prove this assertion preposterous.
  • Most of Google's business is to serve ads to people who search for information.
  • According to Google's website, Google has over one million websites that are "AdSense" partners where they have a revenue sharing relationship.
    • The facts of the investigation will prove that those websites do not have a legitimate competitive alternative to Google. Is that control?
  • The facts will drive this conclusion ultimately, and the facts are not on Google's side.

Mr. Lenard and Mr. Rubin go on to intimate that Internet advertising is not a distinct market. (That's not what Google is telling the FTC and the EC.)

• The reason Google can't make that case is that their are literally reams of public documents and statements that Google and its executives have made about how different and distinct online targeted advertising is relative to traditional advertising.

Their last assertion will also not survive a review of the facts: Google-Doubleclick "do not have any business in common."

• The facts gleaned from investigating the market, and interviewing advertisers and competitors will make it clear that search and display markets have much in common and are highly inter-dependent.
• The head of Google's adevertising section, Ms Wojcicki, recently said that
  • ""We are focused on the branding market" she said. "The online ad market is search and display -- and there isn't a lot after that.""

Mr. Lenard and Mr. Rubin are either unaware or chose to ignore the other anti-competitive "claims" in my Googleopoly analysis.

• The most problematic for Google is that Google-Doubleclick will combine the #1 and #2 dominant internet advertising audiences, with the #1 and #2 dominant Internet content networks, with the #1 and #2 dominant advertising client bases.
• This will enable Google-Doubleclick to "corner the market" for search, display advertising, behavior metadata, performance analytics, ad brokering and ad exchanges.
• For those who are skeptical, I encourage you to:
  • review the two summary charts at Googleopoly.net;
  • read the three page executive summary; or even better
  • read the entire 35 page paper.
• I am confident the more you learn the more concern you will have that the Google-DoubleClick merger is highly anti-competitive.