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Antitrust

Why "Google Yahoo ad deal is bad for online advertising"

Harvard Business School Professor Benjamin Edelman posted his earlier House antitrust testimony on why the "Google Yahoo ad deal is bad for online advertising." 

  • Professor Edelman debunks Google's claim that auctions determine Google's search prices by explaining how in many cases Google actually sets the price of search through its reserve pricing policy.
  • He also explains why Google is not being truthful when it claims that advertisers can easily take their data with them -- in reality Google impedes advertisers ability to use alternative advertising platforms through a technical "API" barrier to entry. 

In short, it is a useful and concise read, for those closely following the Google Yahoo deal and those trying to determine whether or not the DOJ will have problems with the proposed online advertising partnership.

  • It adds to the mounting evidence that a "partnership" between a dominant #1 Google and Google's leading online advertising competitor, Yahoo, is in fact anti-competitive collusion and a de facto price fixing scheme.    

 

 

Googleopoly's new self-granted entitlement: "Automatic Matching" is evidence of monopoly abuse

Kudos to Cade Metz of The Register for exposing Googleopoly's new self-granted entitlement to take their customers money without permission -- called "automatic matching" in Adwords.

The Missing Business Analysis of new "Cuil" search engine

I was amused at the near total absence of business analysis in most of the coverage of, and commentary on, the new hyped "Cuil" search engine, the reportedly most-promising potential Google-beater.

Most commenters on Cuil totally miss that it is NOT their user perspective that determines success or failure of a search engine's business, but the BUSINESS perspective that matters.

Google Knol: The World's Editor-in-Chief & Omni-Publisher? Can you say "Dis-intermediation?"

Knol, Google's newly announced online publishing service, is an ominous direct competitive threat to traditional newspaper/magazine/journal publishers, NOT a challenge to Wikipedia as many in content circles naively and wishfully think.

  • Like the frog that has the good sense to jump out of boiling water, but who can be lulled into a false sense of security and get cooked if the tempature increases gradually...
    • ...publishers of all types currently have a false sense of security that Google is targeting Wikipedia and not them because Google has YET to really monetize Google News or YouTube.

Wake up publishers/editors! Google, with by far the world's largest:

What 3Q earnings tell us about Google-Yahoo Antitrust Review; GOOG-YHOO earn ~100% of profits

With the 3Q08 earnings releases by Google, Yahoo and Microsoft in the last few days, DOJ antitrust investigators of the Google-Yahoo partnership now get their first fresh look at the most recent revenue and profit market shares for this market.

Takeaways from Google's earnings call

Growth: 39% YoY revenue growth on a ~$20b base, in a slowing global economy is impressive. Hats off to Google. Lots of network effects at work as Google sites revenue grew 42% YoY.

Tone: I did note the slightest whif of humility this quarter that external factors had some effect on Google's business, in stark contrast to last quarter's more bold statement that Google saw no effect of the external market or economy on Google's business.  

DoubleClick: As I suspected, CEO Schmidt said in an answer to a question, that Doubleclick was going well but that he would not break out any information -- in Google's well-established sorry-Charlie-style... no insight or guidance for you... The only thing interesting that was said about DoubleClick was indirect, in that Sergey Brin said that the big problem in display is that it is highly-fragmented." Couple that with CEO Schmidt indicating that Google was only months away fom offering a one-stop advertising solution, one can surmise that Doubleclick will indeed prove to be a material growth kicker to help Google fight off some of the natural drag of the law of large numbers.  

Mention most worth follow-up: In Q&A my ears perked up when the CFO explained part of a cost jump was "legal costs" and CEO Schmidt chimed in that these costs were "bursty." I am amazed that a $20b company that gives minimal detail would mention that legal costs were a factor. Do you know how unusually big a legal number has to be to pop up in an earnings call? Did they settle some case that we don't know about? or is the Viacom-Youtube discovery work a lot more costly than Google has let on? Something is amiss and worthy of followup.   

Read an insightful piece: "Google: the mother of antitrust battles?" in The Register

Anyone interested in Google's increasing dominance or the Google-Yahoo partnership should read Andrew Orlowski's great piece in The Register: "Google the mother of antirust battles?"

  • It is always helpful to get an insightful and different perspective from "across the pond."   

Debunking the Google-Yahoo Antitrust Myths

In advance of the Senate and House antitrust hearings on Google-Yahoo, I thought it would be useful to debunk some of the primary antitrust myths you will likely hear.

 

Myth #1: There can’t be an antitrust problem as long as consumers are just one click away from a competitive search engine.

Translating Yahoo's announcement to wholesale Yahoo's search

With Senate and House antitrust hearings on Google-Yahoo next Tuesday, the timing of Yahoo's new BOSS initiative, Build your Own Search Service, is designed to try and show that Yahoo is still trying to compete with Google after Yahoo partnered with Google "to enhance its ability to compete in the converging search and display marketplace."

Check out the 45 word "headline" on Yahoo's press release on BOSS. There will be a short quiz afterward.

  • "Yahoo! Opens Up Search Technology Infrastructure for Innovative, New Search Experiences, Providing Third Parties with Unprecedented Access, Re-Ranking and Presentation Control of Web Search Results"
    • Yahoo!'s New Open Web Services Platform, Yahoo! Search BOSS, Extends its Open Strategy and Fuels Disruption in the Search Landscape."

The Quiz:

Great Net Neutrality Op Ed by Richard Bennett in San Francisco Chronicle

Don't miss the Op Ed by Richard Bennett today in the San Francisco Chronicle on net neutrality, Google's leadership of the issue, privacy, and the Google-Yahoo partnership.

  • As usual, Richard is insightful, incisive and interesting.

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Q&A One Pager Debunking Net Neutrality Myths