You are here


Barron's online has great summary of Google's relentlessly increasing market share

For those following Google's relentlessly increasing market share, Barrons Online has a succinct summary of ComScore's and Hitwise's latest numbers.

The numbers show why the Senate Antitrust Subcommittee believes Google has market power and why it believe the FTC should determine if Google can leverage its market power in search into other markets before approving the Google-DoubleClick merger. 

Barron's online has great summary of Google's relentlessly increasing market share

For those following Google's relentlessly increasing market share, Barrons Online has a succinct summary of ComScore's and Hitwise's latest numbers.

The numbers show why the Senate Antitrust Subcommittee believes Google has market power and why it believe the FTC should determine if Google can leverage its market power in search into other markets before approving the Google-DoubleClick merger. 

Bernstein analyzes "Plan B" competitive scenarios if EU or FTC block Google-DoubleClick merger

According to, Sanford Bernstein's Google analyst, Jeff Lindsay:

  • "looks at some of the options available to Google, should the EU (or the FTC for that matter) ultimately come down against the acquisition. He lays out four scenarios: a) Forgo competing in the ad-exchange business. b) Purchase another player, possibly ValueClick. C) Build an in-house ad exchange. D) Form a JV, possibly with DoubleClick". (emphasis added)

The most important takeaway from this analysis is that Google and DoubleClick are obviously competitors in the natural and ongoing evolution of online advertising towards ad exchanges.

  • Lindsey believes it would make most sense for Google to build its own ad exchange in house and that with Google's advantages, Google could get it up and runnning faster than it took Right Media or DoubleClick.

Given the Senate Antitrust subcommittee's concerns in their recent letter to the FTC on the merger:

  • "Antitrust regulators need to be wary to guard against the creation of a powerful Internet conglomerate able to extend its market power in one market into adjacent markets, to the detriment of competition and consumers."

The challenge for the FTC in analyzing this dynamic market is to understand how it is changing and why.

Senators Kohl/Hatch write FTC on Google-Doubleclick merger -- conclude Google has market power

The top Senators overseeing Antitrust matters, Senate Antitrust Subcommittee Chairman Herb Kohl (D-WI) and Ranking Republican Member Orrin Hatch (R-UT), wrote a strong letter to the FTC urging serious scrutiny of the Google-DoubleClick merger. (see pasted copy of the letter at the bottom of this post.)

Having testified before their Senate Subcommittee in opposition to the merger September 27th, I was gratified to learn of the subcommitttee's serious bipartisan concern about the merger and also their very strong grasp of the potential anti-competitive issues arising from the merger.

There are three big takeaways from the letter.

First, the Subcommittee defines the relevant market as Internet advertising, "...combining these two companies' leading positions in these two forms of Internet advertising could cause significant harm to competition in the Internet advertising marketplace."

  • The subcommittee has adopted the same market definition as opponents of the deal.
  • Google had hoped the Subcommittee would, and still hopes the FTC and EU will, define the market as advertising overall.
    • If the FTC agrees with their Senate overseers that the relevant market is the ~$20B Internet advertising market, and not the ~$300B overall advertising market, the merger is at higher risk of disapproval.

Second, the subcommittee has concluded Google has market power in Internet search, another key conclusion of opponents of the merger. 

Study shows websites deny Google competitors web-crawler access to their sites

Have Penn State researchers stumbled upon a Google-DoubleClick anti-competitive smoking gun?  

PCWorld flagged some very troubling new research findings pertinent to the FTC/EU reviews of the Google-DoubleClick merger by Penn State researchers in its article "Google Favored By Web Admins."  

  • Penn State researchers: "Web-site policy makers are playing favorites, and Google is the big beneficiary, say Penn State researchers."
  • ""We expected that robots.txt files would treat all search engines equally, or maybe disfavor certain obnoxious bots, so we were surprised to discover a strong correlation between the robots favored and the search engines' market share," said C. Lee Giles, the David Reese Professor of Information Sciences and Technology at Penn State who led the research team that developed BotSeer, in a statement."

 Why is this significant?

Analyzing the FTC-EU divergence in reviewing the Google-DoubleClick merger

Ironically, just as the EU is gearing up to conduct an "in-depth investigation" of the Google-DoubleClick merger, the FTC investigation is apparently wrapping up with a whimper. What accounts for this divergence in approaches to this merger review?

The first and obvious explanation is differences in the process and timing.

EU launches "in-depth investigation" of Google-DoubleClick merger; What it means

EU antitrust authorities have launched a rare "in-depth investigation" of the Google-DoubleClick merger. What does this action mean? 

First, in calling Google and DoubleClick "the leading providers" respectively of online advertising/intermediation services and ad serving technology, the EU has tipped its hand in its assessment of a central fact in the investigation that it views these two companies as #1 in the world in their specialties. This obviously troubles Google as they have portrayed DoubleClick as a minor player because of its smaller revenue base in the $300m range. The EU obviously did not buy that Google spin.

Second, the EU rejected Google's blanket assertion that "the parties' activities do not overlap" which is Google's fancy way of saying Google and DoubleClick are not competitors. Well the EU pointedly rejected that Google assertion of fact in stating: "The Commisssion will, in particular, investigate whether without this transaction, DoubleClick would have grown into an effective competitor of Google in the market for online ad intermediation." The obvious implication of this statement is that the EU does see Google and DoubleClick as competitors. And it has framed the question in a way that must trouble Google, which is that they are analyzing the merger through the lens of how competition would develop without this merger. hmmm 

Google-DoubleClick: Great new antitrust study on why privacy is relevant to this antitrust review

I was very impressed with Ohio State law Professor Peter Swire's insightful analysis of why, in the context of the FTC antitrust review of the Google-DoubleClick merger, privacy harms are relevant to the traditional antitrust analysis.

  • "In brief, privacy harms can reduce consumer welfare, which is a principal goal of modern antitrust analysis. In addition, privacy harms can lead to a reduction in the quality of a good or service, which is a standard category of harm that results from market power. Where these sorts of harms exist, it is a normal part of antitrust analysis to assess such harms and seek to minimize them."
  • "To the extent proponents of the merger seek to justify the merger on efficiency grounds, such as personalization, then privacy harms to consumers should be considered as an offset to the claimed efficiencies."

In my Googleopoly analysis and my Senate Judiciary Subcommittee testimony on the Google-DoubleClick merger, I viewed the massive aggregation of customer clickstream data to be highly anti-competitive as it would create a tipping point and unsurmountable barriers for others to compete.

American Antitrust Institute calls for FTC to block Google-DoubleClick

The American Antitrust Institute, an independent non-profit advocacy organization just released its white paper:

Like my Googleopoly analysis from this July and my Senate Judiciary Subcommittee testimony in October, the aai concludes that Google and DoubleClick are indeed direct competitors and that: "the merger presents a relatively straightforward case for challenge under the horizontal and non-horizontal merger guidelines."

  • Moreover, the aai stated: "We also see a risk of significant foreclosure effects from Google's control over DoubleClick's publisher and advertiser tools and integration of those tools with Google's dominant search engine and contextual advertising network."

Bottom line: This merger obviously raises serious anti-competitive issues and I continue to believe it should be blocked, but that does not mean that I still think it will be blocked by the FTC -- I no longer do.

More eBay-Skype hypocrisy!

Isn't it illuminating that eBay, the online auction monopoly with 95% market share per Jupiter Research, and the owner of Skype that is lobbying hard for regulation and legislation to force the "unlocking of phones" and mandate net neutrality regulation -- is so uncooperative with law enforcement trying to crack down on organized theft?

  • Could it be that calling for others to be "open" is just code, cover and justification for stealing other's property or property rights?

Reuters reported last week: "U.S. retailers want online sellers to fight theft." 

  •  "U.S. retailers and police called on Congress on Thursday to require online auction sites such as eBay to post the serial numbers of items for sale to help crack down on gangs of professional shoplifters." 
  • ""Operators of sites such as eBay have historically failed to provide any meaningful information to retail investigators," said Karl Langhorst, director of loss prevention for Randall's and Tom Thumb stores, a division of Safeway Inc.""

Seems like more hypocrisy and situational ethics from eBay, where they seek corporate welfare from government, while not cooperating fully with law enforcement to fight "organized theft."

  • Maybe there is "Honor among thieves."


Q&A One Pager Debunking Net Neutrality Myths