Why its signficant advertisers seek FTC/Google-Doubleclick scutiny?

Ad Age reports that the two largest Advertising Associations have asked antitrust officials to look into the spate of major advertising acquisitions; Google-DoubleClick, Microsoft aQuantive, Yahoo-Right Media, and WPP-24/7 Real Media.

  • The thrust of the letter:
  • "During the past month, there have been several major acquisition announcements in the online advertising marketplace... These mergers, if approved, certainly would change the online advertising marketplace. As such, those proposed combinations deserve careful scrutiny. It is essential to ensure that none of these combinations restrict competition in the Internet advertising marketplace."

Why is this significant?

  • First, the advertising community does not like to make waves or speak ill of any potential client -- in any way in public -- it goes against their normal business practice.  
    • The fact that they did speak up and that they did ask the Government to give all these mergers close scrutiny -- was their indirect/politic way of getting their point across without stepping on any one company's proverbial toes.  
  • Second, I think they are genuine in their shock and bewilderment that their entire industry has been transformed before their eyes in a matter of weeks.
    • The online technology players have swooped in and made it clear that  technology and measurement tools are advertising's future.
      • The tail will now wag the dog.
    • Advertisers and advertising agencies must adapt or be left in the dust.
      • WPP, for one, has quickly adapted with its purchase of 24/7 Real Media.

It is my view that there is a whole lot more going on here than meets the eye.

Google/Yahoo dominate 86% of searches per latest Hitwise data

Google's dominance of the search industry continues....

  • Can you say:
    • "search" and "antitrust" in the same sentence?
  • Can you say:
    • "Googleopoly?"

Percentage of US Searches Among Leading Search Engine Providers

Domain

April-07

Mar-07

"Google's emergence as one of the scariest companies on planet"

The San Diego Union-Tribune "gets it" -- in  its editorial on Google:

  •  "The Google Threat, Needed: a guaranteed private search engine."  

A couple of my favorite parts of this dead on editorial:

  • "Google's emergence as one of the scariest companies on the planet continues with a story in the Financial Times describing the Silicon Valley firm's goal of maximizing and cataloging personal information gleaned from every user's use of its vastly popular search engine."
  •  "... but should mortify Google's users – because the company has never come close to adequately acknowledging the vast privacy concerns raised by its already massive database."
  • "... The potential for government snooping, harassment, financial manipulation, blackmail and all sorts of online crime is stunning."

Add to the list of scary things Google is working on is a "truth meter" where Google CEO Eric Schmidt posited in FT just before the last US congressional election, that in the future Google could help voters gauge in real time whether a politician was telling the "truth" or not.

Why FTC review of GoogleDoubleClick is significant

Both the New York Times and the Wall Street Journal are reporting that the Federal Trade Commission (FTC) will substantively investigate the proposed Google-DoubleClick merger.

  • This comes on the heels of an AP report that "an Independent European Union panel has launched an investigation into whether Google Inc.'s Internet search engine abides by European Union privacy rules." Google's search share in Europe is reportedly 75% and 90% in Germany, so we should all expect the EU to also play a formal and significant role in the review of Google-Doubleclick.

Why is the FTC review development significant?

Broadband data bills favor Big Government over competition

Senate Democrats are attempting to sneak through the back door what they cannot get through the front door of the "free and open"  policy process.

The Inouye "Broadband Data Improvement Act" is really a long term trojan horse for net neutrality and heavy regulation of broadband.

  • The bill requires that the FCC "establish a new definition of second generation broadband to reflect a data rate that is not less than the data rate required  to reliably transmit full-motion, high definition video." 
    • "Reliable" "high-definition" broadband is certainly not DSL or existing cable modems.

The clever ruse in this innocuous-sounding language is to redefine broadband competition as a total abject failure, and to declare broadband market failure, so the pro-regulatory types can regulate broadband becuase it is not competitive, or is at best a future duopoly.

Welcome back to the "slimmed-down" Open Internet Coalition II

I'd like to welcome back to the playing field, the reconstituted "ItsOurNet Coalition" which inexplicably went away in January, but has now returned as "The Open Internet Coalition!"

Now we finally know what they were doing while they were gone from the scene for four months...

  • They were losing weight.
  • The coalition shed the excess pounds of Microsoft, Yahoo, and Amazon.
    • Who needs them!
    • It must have been too burdensome for Google to have to accomodate these more reasonable and less-regulatory members of the previous ItsOurNet coalition.
  • Now the new "slimmed down" coalition can be faster, more nimble and united around being pro-regulatory for others.
    • The remaining coalition members are a much tighter and cohesive bunch.
      • There's now no one big or bold enough to challenge the Big Dog and ringleader Google. 
      • There's also no one in the coalition who believes in a free market broadband policy.
      • And it is basically companies and groups whose common thread is they have hired up all the under-employed pro-regulatory staffers who hate the telcos and cablecos.
      • The remaining group is of one mind -- their nirvana "democracy".

I was frankly surprised that the new group chose not to be forthright and embrace its new "slimmed-down" public physique.

Google Sr Advisor Al Gore is the ringleader of "Google's Poodles"

Self-described "Internet inventor" and former Vice President Al Gore has a newly released book "The Assault on Reason" in which he comes out of the shadows and into the limelight as a leading public proponent of net neutrality.  

The Save the Internet coalition blogged/bragged about the book in its post: Al Gore: Net Neutrality is the key to a better democracy."  They lifted some Gore quotes that gave them lots of "warm fuzzies" inside:

  • “neutrality should be the central tenet that will set us on a path toward an open, democratic Internet where free speech and free markets are encouraged.â€?
    • Wait a minute. The term "net neutrality" was only coined as late as 2002 by a socialist Columbia Law Professor!
    • But Gore claims to have invented the Internet before 1992!
    • Who's right? 
    • Moreover, Mr. Gore, factually the net has never been neutral.
  • “More than one and a half million citizens contacted Congress and more than eight hundred organizations joined the SavetheInternet Coalition, organized by the upstart media reform organization Free Press, using innovative online mobilization tactics …â€?
    • Thank you Mr. Gore from coming out from the shadows and coming clean by publicly endorsing the efforts of, and tacitly acknowledging your strong ringleader role in managing "Google's poodles",  SaveTheInternet and FreePress.
    • The still unanswered question is how many tens of millions of dollars has Mr. Gore made from his boatload of Google options/warrants granted to him as "Senior Advisor" to Google?"
    • And where are the disclosures in the book that most all of Mr. Gore's multi-ten million dollar net worth is in Google shares -- constituting a huge undisclosed conflict of interest on the issue of net neutrality.    
  • “I truly believe the most important factor is the preservation of the Internet’s potential for becoming the new neutral marketplace of ideas that is so needed for the revitalization of American democracy,â€? he writes. “People are not only fighting for free speech online, but they are also working to keep the Internet a decentralized, ownerless medium of mass communication and commerce.â€?

Senate Chairman Kohl urges DOJ block XM-Sirius merger

Senate Antitrust Subcommittee Chairman Kohl (D-WI) wrote the DOJ urging them to block the XM-Sirius merger.

It is an exceptionally persuasive and compelling letter that effectively eviscerates XM-Sirius' contention that satellite radio is not a separate market.

  • The Senate antitrust experts have concluded it is a separate market, making this a classic attempt to merge to monopoly.

I believe this letter is a good "precursor" for what the DOJ will think and do.

This letter also reached the same conclusion I reached shortly after the merger was announced and which I blogged on in my previous post "XM-Sirius: The emperor has no clothes" 3-31-07.

House "spyware" legislation oblivious to Google's "pryware"

The Post Gazette reports today that:

  • "The House passed legislation Tuesday to combat the criminal use of Internet spyware and scams aimed at stealing personal information from computer users.

    Spyware, said bill sponsor Rep. Zoe Lofgren, D-Calif., "is one of the biggest threats to consumers on the Internet." She and other lawmakers cited estimates that up to 90 percent of computers in this country are infected with some form of spyware.

    Spyware is software that secretly collects information about a person or organization and sends it to another entity without the user's consent..."

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Q&A One Pager Debunking Net Neutrality Myths