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Google Adwords not neutral -- charging more for slow loading sites
Submitted by Scott Cleland on Fri, 2008-06-20 13:03
Google AdWords announced a new net neutrality double-standard that may also be an anti-competitive practice, in that Google will start discriminating against slower-loading websites by charging them higher prices.
- Per Google's blog: "Starting today, this load time factor will be incorporated into your keywords' Quality Scores. Keywords with landing pages that load slowly may get lower Quality Scores (and thus higher minimum bids). Conversely, keywords with landing pages that load very quickly may get higher Quality Scores and lower minimum bids."
- Translation: Google will adjust its subjective, non-transparent, non-auditable and non-appealable "Quality Score" for AdWord bidders, to discriminate against websites that have slower-loading sites -- by arbitrarily raising the minimum price a bidder has to pay to participate in the auction.
- In other words, the Adwords "access ante" is not the same for everyone.
- Those who design their websites the way they like them, and the way that is most profitable for them (i.e. collecting revenue from display ads on their most viewed landing page) -- will be discriminated against unless and until they re-design their web-pages to favor Google's search-dominant business model over the more competitive display advertising model.
- This is highly relevant to the DOJ antitrust review of the Google-Yahoo partnership (whose purpose is to accelerate the convergence of search and display advertising) because Google is exercising its market power in search to economically discriminate against display advertising to the benefit of Google's search model dominance.
- All of the hundreds of thousands of sites that use AdWords will practically have no choice if they want to reach Google's dominant worldwide audience, but to redesign not only the look-and-feel of their website, but also the economic model and profitability of their landing page -- to suit Google's profitability and not their own.
Bottom line: This is further evidence that Google:
- Has market power;
- Is exercising it's market power anti-competitively;
- Rigs its opaque auction process to benefit Google, the auctioneer, and not the auction participants;
- Operates with minimal accountability to anyone; and
- Expects competitors to be neutral, but not Google.