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DOJ's Interest in Reviewing the Google-Twitter Agreement

Submitted by Scott Cleland on Tue, 2009-10-27 13:25

What would be the DOJ's interest in having a formal investigation/review of the Google-Twitter agreement?

  • First, as I posted before, Twitter is a rare disruptive and potentially game-changing competitive platform to Google, like Netscape could have been to Microsoft.
    • Simply, does the DOJ want competitors to Google or does the DOJ want Google to continue to foreclose competition to Google by systematically coopting/partnering with potential competitors (like Google has done with AOL, Amazon, eBay, Ask.com, Craigslist, MySpace, and  attempted to do with Yahoo and book interests...) so they have no interest/ability to competitively challenge Google in the future?
  • Second, does the DOJ want Google to coopt one of the only two promising technology platforms  that currently threaten to disintermediate Google from its customers, like Google has disintermediated most of its competitors with its dominance of search and search advertising?
    • A leading un-coopted potential competitive platform to Google is Facebook's social networking audience of 300m users. Users go to Facebook to connect, interact and share, not seek information, meaning that it is potentially a disruptive competitive platform/force to Google's current Internet dominance of search/search advertising.
      • It is important that Facebook be allowed to evolve outside of Google's revenue subordination and control given that its competitor, MySpace, was originally coopted by partnering with Google early on for $900m. 
    • The other leading potential competing platform that Google has yet to coopt, is Twitter, which already has ~85m users and which can be viewed as a potential disruptive and disintermediating competitive force to Google in the future.
      • Users flock to Twitter to get the most immediate information available. 
      • Twitter's astonishing growth proves that there is great unmet demand for immediate information.
      • Moreover, immediate information tends to be the most valuable and monetizable information, i.e. news, market/stock info, sports scores, live coverage, shopping, etc..
      • At least one observer, Sean Parker, a former Facebook President, argues that Twitter could be "bigger than Google"... (if allowed to be.) 
      • The DOJ can only learn the answer to this by formally investigating the Google-Twitter agreement.   
  • Third, does the DOJ want to hear from the many interested and affected parties that could be harmed by the foreclosed competition that a Google-Twitter agreement could cause?  
    • Just like advertisers and newspapers had great interest in not having Google coopt Yahoo in its proposed ad agreement, advertisers, newspapers, and others could be expected to have great interest in keeping Twitter as an alternative competitive platform to Google.
    • The only way the DOJ could learn about the implications for parties threatened by Google's anti-competitive behavior in the past, is by issuing civil investigative demands (CIDs) to industry to investigate the issue.    

In conclusion, the DOJ has learned that in approving Google's acquisition of YouTube, that the DOJ enabled Google to effectively foreclose the potential for YouTube to become a competitive platform to Google. (YouTube is now the second largest generator of searches in the world after Google per Comscore. In other words, over one quarter of Google's searches are now generated from Youtube.) Moreover, the FTC's 4-1 approval of DoubleClick effectively foreclosed any serious competitive display ad-servng platform competition to Google in the future. 

  • In short, will the DOJ keep the Internet open to Twitter competition to Google?
  • Or will the DOJ allow Google to foreclose the possibility of Internet competition from Twitter, by allowing Google to coopt and subordinate Twitter via the Google-Twitter Agreement?    

 

My previous Google-Twitter Agreement posts:  

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