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oops! Google-YouTube serving ads just like competitor DoubleClick

Google has another big "oops!" problem where its actions in the marketplace do not match the line they are feeding to the FTC/EC antitrust investigators who are reviewing Google's proposed acquisition of dominant ad-server DoubleClick.

  • It appears that Google's "innovation without permission" culture is confronting Google's antitrust lawyers with yet another merger review mess to try and clean up.

So what's the new big contradiction/problem?

  • Google's lawyers have been arguing to FTC/EC authorities that Google is not a competitor to DoubleClick because Google only does search and DoubleClick only serves display ads.
    • How can there be any antitrust problem if they don't compete argues Google?
  • Well today Google's YouTube network has begun selling overlay ads to select videos running on YouTube.
    • According to ComScore, YouTube is the Internet's most-visited video website with ~189 million visitors in July.
    • That means that Google is now the exclusive ad server of display/rich media advertising to the largest video site in the world.

Its now hard for Google to still claim with a straight face that they aren't in the ad-serving business and that they don't compete directly with DoubleClick.

  • Its also hard for Google to maintain that they are an insignificant player in the ad serving market when they are now in one fell swoop the largest server of rich media ads for video in the world.

In my 35 page analysis of "Googleopoly: The Google-DoubleClick Anti-competitive case, I explain in detail (pages 5-8) why Google and DoubleClick are in fact competitors and that Google "serves" ads in its sponsored listings of search results. The fact that they served text, vs banner or rich media ads was only a difference of format not function since they all digital ads a fungible ones and zeroes.

  • The fact that Google previously chose to not serve banner and rich media ads like DoubleClick, did not mean that they could not or would not serve banner and rich media ads like DoubleClick.
    • Google is now advertising with YouTube precisely how I explained they could and would in my Googleopoly analysis.
    • This important artifice is now gone.

When you add this relevant market "oops!" to the relevant market "oops!" of earlier this month when Google's head of advertising defined Google's relevant market differently than the Google lawyers, it has not been a good month for the Google-DoubleClick merger.

Bottomline: Google is digging itself a hole with antitrust authorities. Google's own words and own actions are making the case that Google and DoubleClick are competitors and that they comprise most of the online advertising market.

  • Normally when someone is in a hole the advice would be to stop digging.
  • But that would not be nearly as enertaining, dig away Google!
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