Antitrust

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.

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.

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.  

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."   

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.

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.

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.

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 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...

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."