Nothing neutral about search fraud

According to Investors Business Daily, a new study by Click Forensics said that 14.2% of all clicks to paid search ads, or one of every seven ad clicks, are fraudulent. Google and Yahoo are disputing the study.

  • Click Forensics CEO, Tom Cuthbert said: "Click fraud is getting more prevalent, easier to commit and more difficult to catch and identify."

It seems the dominant search gatekeepers, Google with 47% share and Yahoo with 28% share, have a serious integrity issue at the heart of the search engine advertising business model.

What's happened to ItsOurNet's Website? Its been offline for about 5 days...

I often visit ItsOurNet.org to see if they have anything new. I also look to see if Microsoft has rejoined ItsOurNet like they said they would after the close of the AT&T merger. Well the AT&T merger closed a month ago and still no word from Microsoft.)

What is new and interesting is that the Itsournet.org official web site has been down since at least last Thursday and maybe longer -- meaning you can't even get to their previously public website -- without a user name and a password. It ominously says "authorization required." 

Is Google-Youtube a politically "neutral" gateway to Internet content and videos?

An article about Google's top lobbyist in the The Politico.com, a new media outlet that is dedicated to Politics, got me thinking about connecting-the-dots for Washington folks about the lack of Google-YouTube political "neutrality."   

  • There is an increasing body of evidence that Google may be less concerned about promoting a free, open and "democratic" Internet, and more concerned with promoting a regulated Internet for the benefit of "Democrats."

The Politico article noted: 

My Legislative Outlook for Net Neutrality -- An enlightening read not to be missed

Now that the Democratic-controlled Congress is back in full swing, and now that a lot of cards have been put on the table, its helpful to take stock of where we are on the net neutrality issue. Below I provide: an overview, a Senate outlook and a House outlook. 

My bottom line analysis is that there is a very low liklihood of net neutrality legislation passing in this Congress, despite the hype.

  • That said, I have seen nothing that would suggest that net neutrality won't remain a leading techcom issue in Washington for years to come.  

Overview:

Given that net net neutrality advocates really want a change in the law, they badly blew their golden opportunity last year to get net neutrality principles into law -- by wildly overplaying the moderately strong hand they had last year.

NN advocate candid that AT&T was extorted on NN in my debate at Media Institute

I debated Gigi Sohn of Public Knowledge again today at a Media Institute luncheon and was really surprised at her candor in saying that the net neutrality conditions imposed on AT&T were "extortion" that she was happy to be a part of it.

While I have debated Gigi several times and respect her highly as a very capable advocate for her positions, I was troubled that she was so open that the net neutrality conditions imposed on AT&T were "extortion."

Yahoo stumbles as Google gains: Part II Google becoming "dominant" per antitrust

There's new evidence today that Yahoo continues to stumble as Google continues to gain market share. Yahoo just announced meager 13% revenue growth for 4Q06, while Google announced at the end of the year that Google's revenue grew 86% during the same period. (That's over SIX times faster for those who care about those things!)

This is powerful additional confirmation that Google is quickly on path to reach 50% market share and beyond, a significant antitrust threshold of being considered "dominant" and warranting "stricter scrutiny" of its business practices for potential anticompetitive behavior.  I explained the broader significance of this "dominant" threshold in my blog yesterday.

Countdown to 50% share: Google approaching antitrust "dominant" status -- Part I

An interesting and relevant antitrust milestone is coming for Google -- maybe as soon as this year -- Google is poised to pass the significant 50% market share "dominant" threshold in antitrust.

This is relevant because when Google exceeds 50% market share, the antitrust "rule of thumb" is that Google will be considered by antitrust authorities to be a "dominant" company.

eBay is not Neutral: eBay using Paypal to fight off Google's Checkout

In my ongoing "hypocrisy watch" service, eBay is back in the news again not being neutral at the same time they are pleading to Congress to pass a law forcing their broadband competitors to be neutral. The recent Forbes article "Why so Worried?" reminds everyone about how in July eBay banned the use of Google's Checkout, a competitor to eBay's PayPal.

  • According to the article, eBay upped the ante in the fight with Google's checkout last week when it decreed that new eBay sellers must offer Paypal or credit cards for payment. It further turns up the heat by requiring that you must be PayPal -certified to sell cross-borders and to get $2k in listings insurance.
    • The article implies eBay is worried about Checkout hurting PayPal's revenues and hence eBay's stock price.    
  • Google has not been neutral either. Reportedly, Google subsidized its competitive checkout service with $20m in 4Q06 by paying transaction fees and promotional discounts. It appears Google's is not afraid to be anything but neutral and leverage its emerging dominance in search to pry open and buy share in the online financial transactions marketplace.

I blogged on this topic twice before, in July I defended eBay's right to competitively differentiate and be hypocritical, and in Decmber I blogged on how Google was not abiding by neutrality principles with it's Checkout competitive tactics.  

Swanson's WSJ editorial nails it on NN: "Its the capacity stupid!"

Bret Swanson in his WSJ editorial over the weekend "The Coming Exaflood" provides a real service to the net neutrality debate -- he forces the discussion to focus more on how we must deal with the coming explosion of demand for capacity on the Internet.

  • In a phrase, Swanson is saying to the net neutrality crowd: "It's the capacity stupid!"

Net neutrality is a classic liberal big government idea that is all about trying to carve up the pie of today to be more fair, while assuming that somebody else will always make more pie for them to carve up. 

  • As Milton Friedman so eloquently said: "there is no free lunch" no matter how much people want to "assume" it.
    • Somebody must build and pay for a faster Internet to handle the explosion of traffic produced by video, and soon HD video.
  • Swanson persuasively forces the reader to think through the massive increases in demand that we already know are "in the pipeline" that require more investment to create a higher capacity Internet.

The insanity of the net neutrality position is that its advocates assume future capacity will be there magically. That capacity will be there, only if there is a functioning marketplace that allows those private network operators that carry the traffic that comprises the Internet are able to earn a return on their investment in new Internet capacity. Otherwise, the Government will have to tax and spend to subsidize it. There is no free lunch.

The insanity of the online giants' position with ItsOurNet, is that they believe they should get a free ride and that the consumer should have to shoulder the entire cost of increasing the capacity of the Internet.

Dont miss the compelling Wash Post Op Ed opposing NN

Kudos to Dave Farber and Michael Katz on their very persuasive and compelling Op Ed in the Washington Post opposing net neutrality. I strongly endorse their perspective and wisdom.

I feel great kinship with their point of view. There is no problem here. And there is a lot of harm and unintended consequences that can result from preemptively regulating the Internet.

Like David and Mike, I am well aware of the potential problems that market power could have. I have a long and public record of standing up to monopoly behavior that I viewed as out of bounds. But I am also a fact and analysis person. The facts and the analysis show this is a competitive marketplace becoming even more competitive in the future.  

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Q&A One Pager Debunking Net Neutrality Myths