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September 2008

The Spider to the Fly... Let's be Friends!

Google has launched a big new charm offensive at ad agencies, and they are understandably suspicious -- like any fly would be looking at Google's dominant advertising web.

The New York Times has an excellent and humorous article on just how wary ad agencies are of Google -- "Googling in Person to Make Friends."

  • Reporter Stephanie Clifford concluded her opening paragraph with a precious and comical capture of the real "spider and the fly" dynamic at work here...
    • The Googlers "emphasized a single message: Google is a friend to ad agencies.
    • No, really."

Let me use Google's new translation software to translate the 'Googlish' language used in this fun article into english.

""We understand that maybe we haven't been the best partner over the years" said Erin Clift, the director of agency relations at Google."

  • Translation: "We treated ad agencies like they were roadkill, and technology trogolodytes until it dawned on us that Google could grow much faster if we tricked ad agencies into 'sharing' their lifeblood with us -- as partners!"

We essentially take Google — our people, our products, our food, our tchotchkes — roll into the lobbies and give people the chance to interact with Google,” Ms. Clift said. The events are “a fantastic way to ingratiate ourselves,” she said.

Google Chrome replacing browser with search bar? -- Replacing a neutral bar with a non-neutral bar?

Most everyone has missed the net neutrality and broader competitive significance of Google launching it's own browser -- Chrome -- by myopicly viewing it only through the browser competition lens vis-a-vis Microsoft Explorer.

Goals and motives matter. Listen to how Google describes its goal with Chrome: 

  • "The goal was to make people forget they are using a browser," said Sundar Pichai, Vice President of Product Management at Google.

What that means is that Google's goal here is to effectively and increasingly replace the neutral browser bar with Google's search advertising bar over time.

What that also means is that rather than typing a URL into a neutral browser bar that neutrally takes the user directly to the site that the user requested... Google will increasingly default the user of the browser bar to a Google page of search results with Google ads and Google's favored content.

If you want honey, don't kick the beehive! -- Google to DOJ: We're going ahead with Yahoo regardless

Google is so arrogant it isn't even aware it is being arrogant.

Per a San Francisco Chronicle article:

  • "Google Inc. and Yahoo Inc. will start a high-profile advertising partnership by early October, even if federal regulators haven't yet approved the deal, Google CEO Eric Schmidt said Thursday.
  • "We are going to move forward with it," Schmidt said in an interview on Bloomberg television after being asked whether the companies would wait for the Justice Department to complete its review."

Let's put this Google behavior into a little context.

DOJ antirust prosecutors are currently involved in a serious antitrust investigation of the Google-Yahoo online advertising partnership for potential Sherman Act collusion/price-fixing illegality.

  • By declaring that Google is going ahead with the Yahoo partnership, with or without approval of the DOJ -- Google is not so subtly telling the DOJ -- "we'll see you in court," "try stopping us, if you can." 
  • What words come to mind to describe Google's public behavior and effective declaration of legal war by their CEO?
    • Arrogant? insolent? disrespectful? defiant? impolitic? inflamatory? tactless? imprudent? unwise? or just downright dumb?   

Bottom line: Normal companies, who respect the rule of law and law enforcement authorities, understand the old adage that "if you want honey, don't kick the beehive."

  • But Google is not normal, its special -- it has a "don't-be-evil motto" "get out of jail free card." No jail is big enough to hold Google! 

Let me leave you with this analogy:

Google's online advertising dominance grows -- Don't forget the pending DOJ investigation...

Google's dominance of the Internet's business model for monetizing content only grows.

  • "Gap widens in online advertising: Rivals struggle to catch up to Google as buyers favor search over display" reports Jessica Vascellaro in the Wall Street Journal.
  • The article's conclusion is dead on and ominous -- the gap between Google and its competitors in online advertising is widening and will continue to do so because the business that Google dominates, search advertising, is growing significantly faster than display advertising is.

As I read the article, I thought many involved in the FTC's investigation and subsequent 4-1 approval of the Google-DoubleClick merger must be getting awfully worried that they made a big mistake in not appropriately enforcing antitrust law last year when they had the opportunity.

ABC columnist on Google: 'amoral'? 'Big Brother'?

ABC columnist Michael S. Malone used some real tough words to describe Google: 'amoral" (twice), 'sinister' (twice), 'Big Brother' (thrice), -- in his column: "Is Google turning into Big Brother?"  

It's a worthwhile read for Googlephiles because it highlights some impotant information Google would like to brush under the rug.

Google's Biggest Customers Oppose Goohoo Ad Pact!

Google, you have a problem. The verdict of your biggest customers is in -- and you've been found guilty of not pursuing your clients' best interests.

  • The ANA, the nation's largest association of advertisers and marketers representing ~9,000 brands, just wrote the DOJ formally recommending that the DOJ oppose the Google-Yahoo advertising partnership as anti-competitive.  

I have two big takeaways for you:

  • First, despite the ANA letter, Google continues to claim that Google knows better what's best for their advertiser clients than their advertiser clients do.
  • Second, at core, the DOJ is investigating the Google Yahoo ad pact for illegal price fixing collusion; this is relevant because DOJ antitrust chief Tom Barnett has stated that prosecution of price fixing is his Division's highest enforcement priority.

First Takeaway: Google clearly doesn't subscribe to the old adage -- the customer is always right. Google knows best and isn't afraid to tell most of its biggest customers they are wrong -- in public. 

Rather than publicly respond to the anticipated ANA letter with respectful comments about how Google looks forward to better explaining how the ad pact will benefit Google's customers, Google essentially wagged their finger at their customers in public telling them they don't know what's best for themselves.  

Exposing the Biases in the Broadband Policy Debate -- My new white paper

Invited to speak at the ITIF forum on ITIF's white paper: "It's Time to End the Broadband Policy Wars" -- I so strongly disagreed with the framing bias of that white paper and the broadband policy debate in general that I decided I needed to counter it by writing my own white paper:


  • Don’t be Fooled by the National Broadband Policy “Straw Man”

     

    Exposing Three Hidden Policy Biases of Broadband Policy Proponents

The abstract of my six page paper is below:

Google undermines broadband duopoly claim

 

Google is helping fund a satellite broadband access start-up to reach the 3 billion people in the world that are not economically near fiber access per an FT story.

Now that Google has invested millions to vouch for the viability of satellite broadband as a broadband access technology, it will be harder for Google's Poodles, like FreePress and Save the Internet, to argue that broadband is a duoopoly and that broadband competition is not possible. 

This Google endorsement of satellite broadband technology is on top of Google's endorsement and investment in Clearwire's WiMax broadband wireless deployment, which is yet another Google validation point that wireless broadband can compete with cable modems and DSL. 

Those that continue to argue that broadband is a monopoly or a duopoly simply are not in touch with marketplace reality. 

The Irresponsibility of Google's 'Publicacy' Mission -- claims another innocent bystander -- United Airlines

Can you trust Google to responsibly exercise its power? Google's crusade to make all information accessible -- no matter what -- has indiscriminately mowed down another innocent bystander.

  • United Airlines stock value lost three quarters of its value on Monday ravaging spooked UAL shareholders.
  • Google's Googlebot 'crawlers' mistook a 2002 article about UAL's 2002 bankruptcy -- as a new and current story -- which when wrongly spread efficiently by GoogleNews alerts to everyone interested in United Airlines, freaked out current shareholders who dumped all their stock. Oops. Ouch. But no apology from Google...  
    • Two good Wall Street Journal stories yesterday and today explain Google's culpability in this disaster for UAL pretty well. 
    • This is a stark reminder, that anything that a Googlebot can crawl, it will make public. It will leave no digital rock unturned to find whatever is under a rock -- never mind if it was hidden for good reason, privacy, security, ownership -- Googlebot say "finders keepers losers weepers."

This latest UAL incident highlights a clear pattern of Google's 'publicacy' philosophy that any information Google can find, copy or photograph -- it should put immediately into the public domain whether it is accurate information, private unauthorized information, or information owned/copyrighted by others.  

Countdown: 14 days until Google-Yahoo DOJ Deadline

Only 14 short days until Google-Yahoo's September 25th deadline for DOJ to complete its review of their proposed advertising partnership...

  • Adding some drama to the deadline, the San Francisco Chronicle captured Google's CEO Eric Schmidt's, 'make my day' attitude toward the DOJ review of his ad deal: 
    • ""We are going to move forward with it," ...after being asked whether the companies would wait for the Justice Department to complete its review."
    • Google's defiant attitude brings to mind a twist on another of my favorite movie quotes: "Approval! We don't need no stinkin approval!" 

Under section 16 of the redacted Google-Yahoo agreement submitted to the SEC, the companies gave the DOJ 105 days from June 12th  -- that's September 25, 2008, to complete their antitrust review (Google-Yahoo can extend that review deadline if they choose to). 

  • There is another interesting deadline in the Google-Yahoo agreement -- October 11 or 120 days after June 12th. 
    • Importantly, after October 11th either Google or Yahoo can terminate the agreement to "avoid or end a lawsuit" filed by antitrust authorities. They can also terminate the agreement if a court blocks the deal.

Past experience suggests Google won't back down easily if Justice challenges the agreement, given that Google routinely snubs its nose at U.S. governmental authority:

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