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Why "Google Yahoo ad deal is bad for online advertising"

Harvard Business School Professor Benjamin Edelman posted his earlier House antitrust testimony on why the "Google Yahoo ad deal is bad for online advertising." 

  • Professor Edelman debunks Google's claim that auctions determine Google's search prices by explaining how in many cases Google actually sets the price of search through its reserve pricing policy.
  • He also explains why Google is not being truthful when it claims that advertisers can easily take their data with them -- in reality Google impedes advertisers ability to use alternative advertising platforms through a technical "API" barrier to entry. 

In short, it is a useful and concise read, for those closely following the Google Yahoo deal and those trying to determine whether or not the DOJ will have problems with the proposed online advertising partnership.

  • It adds to the mounting evidence that a "partnership" between a dominant #1 Google and Google's leading online advertising competitor, Yahoo, is in fact anti-competitive collusion and a de facto price fixing scheme.    

 

 

What 3Q earnings tell us about Google-Yahoo Antitrust Review; GOOG-YHOO earn ~100% of profits

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.

Read an insightful piece: "Google: the mother of antitrust battles?" in The Register

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."   

Kohl: "Pretty explosive stuff" on hearing Microsoft's testimony of Yahoo's collusive admission

Blogging from the Senate Judiciary Subcommittee hearing, there was a very surprising development several minutes ago.

  • Chairman Kohl characterized as "pretty explosive stuff" how Microsoft General Counsel Brad Smith recounted what Yahoo Ceo Jerry Yang told Microsoft last month in a meeting with several witnesses.
  • Per Microsoft's Smith: Jerry Yang said that the search market was "bi-polar" with Google on one pole and others on the other pole.
    • Yang indicated that Yahoo was going to join the Google "pole" because the other pole was not viable. 

Under oath, Senator Spector followed up on the Chairman's interchange and asked Brad Smith if he stood by this characterization of CEO Yang's "bipolar" comments -- and he replied "absolutely!"

  • When Senator Spector asked, in a prosecutor's style, if Yahoo's General Counsel  was at that meeting, he said he was but that he did "not recall" Yang's "bi-polar" comment and disagreed with Microsoft's characterization. 

As anyone in Washington appreciates, and Senators Kohl and Spector certainly appreciated, someone was not telling the truth.

  • I strongly believe that the DOJ will want to depose all the witnesses at that meeting, under oath and under penalty of perjury, about that comment and whether it is true or not. 

If Microsoft's testimony was true, which I believe it was, because of the serious personal risk of perjury to Mr. Smith, it is "pretty explosive stuff" as Chairman Kohl described. 

Debunking the Google-Yahoo Antitrust Myths

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.

Translating Yahoo's announcement to wholesale Yahoo's search

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.

  • "Yahoo! Opens Up Search Technology Infrastructure for Innovative, New Search Experiences, Providing Third Parties with Unprecedented Access, Re-Ranking and Presentation Control of Web Search Results"
    • Yahoo!'s New Open Web Services Platform, Yahoo! Search BOSS, Extends its Open Strategy and Fuels Disruption in the Search Landscape."

The Quiz:

Senate just scheduled Google-Yahoo antitrust hearing for 7-15

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.

 

 

Flagging the new Palatnik Factor Blog on online marketing

Pablo Palatnik, an online marketing expert, recently launched his own blog, the Palatnik Factor which I recommend; Pablo is also a contributing writer for the Search Engine Journal -- which is where I came accross his work when he wrote a dead on piece questioning "Google Adword's Quality score: affilitates worst nightmare." 

A couple of my recent pieces are particularly relevant to online marketers:

http://www.precursorblog.com/content/why-not-a-marketer-bill-rights-google-yahoo-cartel

http://www.precursorblog.com/content/google-adwords-not-neutral-charging-more-slow-loading-sites

Google-Yahoo partnership: Not if, but when it becomes anti-competitive

The new Google-Yahoo partnership to better converge the search and display markets is skating on thin antitrust ice that will only get thinner over time -- unless Microsoft or some unknown competitor somehow starts taking lots of market share from the new Goohoo. 

What are the important takeaways here? 

First, at core, the Google-Yahoo partnership is clearly about trying to snuff out Microsoft as a competitive force on the web. 

Unleashed: Transcript of Griffin/Cleland talk on Google, net neutrality, monopolies, click fraud, privacy

For those who like the written format, here is the link to the transcript of Chip Griffin's interview of me on all things Google.

This interview turned out to be one of the most comprehensive and in-depth discussions I have had on all things Google -- that's been captured for web listening or reading.

We discussed:

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Q&A One Pager Debunking Net Neutrality Myths