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Antitrust

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.

Senate just scheduled Google-Yahoo antitrust hearing for 7-15

Just learned that the Senate Judiciary SubCommittee on Antitrust has scheduled a hearing on the Google-Yahoo agreement for Tuesday July 15th, at 10:30 am.

  • "The Senate Committee on the Judiciary has scheduled a hearing before the Subcommittee on Antitrust, Competition Policy and Consumer Rights on “The Google-Yahoo Agreement and the Future of Internet Advertising” for Tuesday, July 15, 2008, at 10:30 a.m. in Room 226 of the Senate Dirksen Office Building. Chairman Kohl will preside. By order of the Chairman."

The House Judiciary Committee is expected to have a hearing that same afternoon on the Google-Yahoo deal, Internet competition and privacy.

 

 

Google unfairly represents AdWords as an "auction" process; it is not

Google unfairly represents that it competitively conducts 'auctions' for keywords in AdWords; Google even has an "auction policy." However, if you look up the definition of "auction" one finds it is the public sale of property to the highest bidder

  • The big problem here is that Google's auction does not sell property to the highest bidder.

If Google were interested in fair representation and truth in advertising, Google would represent Adwords as Google's algorithmic secret selection process or GASSP.

  • That's because Adwords is a really a mysterious 'Black Box' system, that is secret, non-neutral, non-transparent, non-auditable, and non-appealable.
  • Google probably thinks its "unfair" to expect the world's leading Internet advertiser to respect fair representation and truth in advertising laws...

Great piece on academic's concerns about Google's influence -- in Boston Globe

Drake Bennett of Boston Globe did a great job of highlighting some fresh new concerns about Google's extraordinary influence that I had not heard before -- see "Stopping Google."

  • Here's the conclusion of the piece in order to encourage you to read the whole article:
    • "But there is a reason "Google" has become a verb: Google has so outpaced its rivals that it has begun to look like a monopoly, a necessity where users have only one real option. And the more we come to rely on Google, the more Google may have to listen to the rest of us."

 

 

Google Adwords discriminating against small businesses for slow loading?

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. 

Google Adwords not neutral -- charging more for slow loading sites

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. 

Google taking share despite revenue decline in Internet advertising -- new IAB report

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.

Why not a Marketer Bill of Rights for the Google-Yahoo Cartel?

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.

Google-Yahoo partnership: Not if, but when it becomes anti-competitive

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. 

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Q&A One Pager Debunking Net Neutrality Myths