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Antitrust

Google-Yahoo ad deal would also be a trial balloon testing FTC's antitrust mettle

The Wall Street Journal's scoop that Yahoo is considering a two week trial of outsourcing search to Google -- is also a trial balloon testing the FTC's antitrust mettle.

If you don't remember, the last sentence of the FTC's Majority opinion approving the Google-DoubleClick merger was a clear warning to Google:

  • "We want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the Commission intends to act quickly."

Let's also put this into context.

Surprise! Google is concerned a Microsoft-Yahoo merger would hurt the Internet

Google's CEO Eric Schmidt must have an extremely dry sense of humor.

 

Google's growing undisclosed "conflicts of interest" are bearing their teeth

New evidence exposes that Google has much more serious financial conflicts of interest and is much less of an "honest broker" of online advertising than most appreciate. 

House Judiciary Free Speech hearing a yawner; Christian Coalition couldn't answer simple questions

The House Judiciary hearing on "Free Speech and the Internet" this afternoon was perilously close to being a non-event.

  • While Net neutrality activists will claim and spin victory and momentum in getting a congressional hearing on the subject, anyone who listened to the hearing would have been surprised by how little actual support net neutrality got out of this hearing

What I found most interesting and telling at the hearing is that Michelle Combs of the Christian Coalition, who testified in support of net neutrality, was completely unable to answer simple softball questions by Ranking Member Sensenbrenner. Like a proverbial "doe in headlights" she could not answer the simplest of questions for a witness; she had to ask for help from her fellow panelists, which made it obvious that she was only a symbolic figurehead on the subject and did not understand even the most basic parts of the net neutrality issue. These were the two questions and answers paraphrased:  

EU poised to approve Google-DoubleClick; Google's increasing dominance now on EU regulatory radar

(Investors: don't miss the last part of this post.) 

Sources indicate that the EU is poised to approve the pending Google-DoubleClick merger soon in what insiders described as a "close call."

Chairman Markey's Net Neutrality Wolf in Broadband Sheep's Clothing Act

The long-awaited new Net Neutrality bill is finally coming out from House Telecom Subcommittee Chairman Ed Markey and Rep. Chip Pickering -- it's now called "The Internet Freedom Preservation Act of 2008."

After reviewing the draft version circulating among the media this evening, here are my initial takeaways on the new proposed legislation.

First, the proposed legislation attempts to rebrand the controversial "net neutrality" issue as "Internet Freedom" and "broadband policy."  

  • While most all of the net neutrality buzzwords still pepper the legislation (open, discrimination, blocking, degrading, etc.) conspicuously absent from the legislation is the well-known and never fully defined "net neutrality" brand. 
  • This is odd given all the effort Markey's supporters have put into branding this issue over the last two years. 
  • It is doubtful that most people on the Hill, in industry, and in the press will stop calling it Markey's new Net Neutrality bill. 

Second, the bill's primary purpose is a bold attempt to reverse longstanding United States broadband policy by amending Title I of the 1934 Communications Act. This Markey bill would:

Calling Yahoo's Bluff -- How real is the Google outsourcing option? Not!

In reading most all the major press reports on the Microsoft-Yahoo bid, there has been plenty of reporting on the personalities, the price and the process, but precious little analysis of the core assumption whether Yahoo truly has a credible alternative strategic option -- in outsourcing its search to Google. 

  • One can't get a true handle on the likely endgame of this transaction without a more rigorous testing of this outsourcing pillar assumption:
    • Is outsourcing Yahoo's search function to Google a viable and real strategic option given recent antitrust concerns?
  • No. Upon close examination of the facts, this alternative is a weak bluff by Yahoo at best -- designed to buy time and create the perception that Yahoo has more maneuvering room than Yahoo really does.

Would antitrust officials allow Yahoo to outsource its search function to Google? Highly unlikely. 

Great Wash Post article: "Some businesses at mercy of Google see hope in bid"

Kudos to Kim Hart's dead-on insights in her Washington Post article: "Some Businesses at Mercy of Google See Hope in Bid." 

  • Forester research analyst Shar VanBoskirk: "There does seem to be an attitudinal shift," she said. "Two years ago, Google was everyone's salvation," because it enabled small Web site owners to easily make money by selling ads, she said. "Now people feel like it has too much control. They may prefer to work with a player that doesn't have as much power in the market."

  • "Google has the edge right now. Its unmatched reach on the Web, both through its dominant search engine as well as its large base of advertisers and publishers, has allowed it to wield so much power that it can shape markets, anoint winners and declare losers, and set prices for advertising, leaving customers like Davies feeling they're at Google's mercy."

 Well said. Enough said.

Bursting its own stock bubble: Why Google is its own worst enemy

Since the beginning of the year, Google's stock has fallen over 25% -- about 2-3 times the fall of the relevant indexes.

  • The good news for Google shareholders is that most all of Google's stock price problems are self-inflicted, so they could fix them -- if they wanted to.
  • The bad news for Google shareholders is that Google is unlikely to change its problematic bahavior -- because "leopards don't change their spots."

Why is Google its own worst enemy?

First, Google routinely alienates its friends and allies.

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Q&A One Pager Debunking Net Neutrality Myths