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Antitrust

Relevant Washington questions to ask Google CEO Schmidt at his speech Monday in Washington

Given that Google CEO Eric Schmidt is delivering a major speech at the Economic Club of Washington Monday June 9th lunch, given that Google's business model is all about delivering "relevancy" to users, and given that Google's public policy mantra is "openness," I have assembled some suggested Washington-relevant questions for reporters and others to ask Dr. Schmidt at and after this open forum.

  • The subjects of the questions are: antitrust, privacy, consumer protection, good government, transparency, openness, tax, net neutrality, and broadband Universal Service

Antitrust: 

  • If, per the FTC, search is a "unique" or separate market, why wouldn't a search-partnership between #1 Google and #2 Yahoo be illegal collusion when Google already partners with #4 AOL and #5 Ask.com -- and when the four search partners would comprise a de facto search cartel controlling over 90% of the revenues in the U.S. search market?

Privacy:

  • Should consumers and Congress be concerned with Google exploiting a privacy regulation loophole to offer personal health records management, when independent watchdog group Privacy International ranked Google worst in the world on privacy and Google refuses to comply with California law requiring posting Google's privacy policy prominently on its home page?  

Consumer Protection:

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:

Unleashed! Why I focus so much on Google -- Listen to Chip Griffin's interview of me...

Here is the link to Chip Griffin's 28 minute interview of me on "Conversations with Chip Griffin," an in-depth conversation about many of the reasons why I believe Google is becoming such a big problem and why I personally spend so much time focused on Google.

I believe you will find it an informative, interesting, and entertaining interview covering all things Google, the online economy, net neutrality etc.

  • Enjoy!  

Why a Lack of Openness Sullies the Integrity of Google's Ad Auctions

Does Google warrant the current exceptional leap-of-faith in the integrity of its dominant ad auction model, given its near total lack of openness, transparency, independent auditability, or third party oversight? There is a growing body of evidence that Google does not.

  • The New York Times article today by Miguel Helft: "The Human Hands behind the Google Money Machine" is a must read for anyone following Google or concerned about the openness and transparency of public markets. It is also a little treasure trove of fresh information on Google.

Why a lack of openness sullies the integrity of Google's ad auctions.

First, it is widely accepted that public markets operate best when open and transparent.

Google's ad auction model has become one of the world's most important public markets. Google is increasingly becoming the world's primary public information broker. Google brokers: 

  • Information for over 700 million search users worldwide, over three to six times their nearest rivals;
  • Advertisement placement for over a million advertisers several times more than their nearest competitors;
  • Monetization for over a million websites several times more than their nearest competitors.

Google is also not open or transparent.

Can you trust Google to obey the rules? Is Google accountable to anyone?

In monitoring Google as closely as I do, it has become increasingly clear that Google does not believe it has to obey the rules, standards, regulations and laws, that others routinely obey and respect. Google increasingly operates like a self-declared, virtual sovereign nation, largely unaccountable to the rules and mores of the rest of the world.     

  • There is plentiful evidence of Google's unaccountability; see the following analysis peppered generously with source links. 

The impetus for this analysis and documentation was Saul Hansel's outstanding New York Times Blog: "Google fights for the right to hide its privacy policy." 

  • In a nutshell, Mr. Hansel spotlighted how Google is refusing to abide by the Network Advertising Initiative's rule that its members must display a link to their privacy policy on their home page; and that this industry self-regulatory body is expected to bend its rules specifically to accomodate Google.
  • This is no isolated incident, shirking the accountability that most everyone else respects is near standard operating procedure for Google. 

Is Google accountable to anyone?    

First, can public shareholders hold Google accountable?

"Googolopoly" the Board Game -- Kudos to Box.net for their great sense of humor!

Kudos to Box.net blog who created a clever Googolopoly board game modeled after the Monopoly board game most have us have played at one time or another.

  • Per Box.net: "...One day we got tired of being serious about the situation and came up with Googolopoly, a game where you can take part of ruling the internet even if you don’t work in Mountain View. The goal of the game is to use Google shares to buy as many properties as you can without landing in the deadpool and losing your stock. As with any great board game, there’s a very real metaphor to what’s going on…. What happens when the Google monster gobbles up all that is left in the web world, is present on your cell phone, desktop, and even controls your health information? For all their product excellence, the threat of amassing this much data is too serious to ignore."

I would be remiss if I didn't link to my own, differently spelled, www.googleopoly.net website which includes some of the most in-depth and serious analysis of Google's growing market power.

For those who wonder -- why should I care:

Why Google-Yahoo deal is collusion -- Yahoo's lifeblood in exchange for Google's caffeine

Microsoft's resumed interest in Yahoo's search business, suggests that Yahoo is close to outsourcing some of its search to Google. The antitrust implications of the world's #1 and #3 online advertising competitors, Google and Microsoft, fighting over the #2 competitor, Yahoo, has finally attracted serious media attention.

  • A Financial Times editorial: "Search for a rival" asks: "How do you spell Googlopoly?" (I spelled it with an 'e' in my www.googleopoly.net Google-Doubleclick analysis and Senate testimony.)
    • The FT: "Any deal that lets Google supply part of Yahoo’s search advertising, however it is dressed up, must be bad for competition." 
  • Today the New York Times', Steve Lohr, with contributions from Miguel Helft, produced the most in-depth reporting to date of the antitrust issues surrounding a Google-Yahoo search partnership: "Google Says It Will Defend Competitive Rationale of a Yahoo Deal."  

Now that the antitrust implications of this issue are beginning to get heightened media scrutiny, let me lay out my case of why a new Google-Yahoo search partnership is anti-competitive collusion and not benign collaboration. 

First, one must look at the competitive impact of a Google-Yahoo partnership.

New IAB data indicate Google & Yahoo have 64% share of US Internet advertising revenue!

The new 2008 Internet Advertising Revenue report just came out from the Interactive Advertising Bureau.

It has U.S. Internet advertising revenues for 2007 at $21.2b, up an impressive 26% from 2006 revenues of $16.9b, but nowhere near as impressive as Google's 56% overall revenue growth in 2007. 

With the pending Google-Yahoo outsourcing pact reportedly being negotiated, I thought it might be iluminating or instructive to see what share of U.S. Internet advertising revenues Google and Yahoo each have, and what they would have on a combined basis. 

  • Given that Google's 2007 U.S. revenues were ~$8.9b that would be about 42% of all U.S. advertising of $21.2b.
  • Given that Yahoo's 2007 U.S. revenues were ~$4.7b that would be about 22% of all U.S. advertising revenues of $21.2b.
  • That would put Google and Yahoo's combined Internet advertising revenue shares at 64% that the "partnership" would collectively control. 

At a minimum, the domination of these two players in the U.S. Internet advertising market, combined with Google's incredible momentum in taking share from all its competitors signalling powerful network effects, must concern both the DOJ and FTC.

If Google and Yahoo partner to not compete as fully as they did before... where is competition going to come from? 

What Dr. Seuss might have written about Googlehoo...

With respect and affection to the memory of the late great Dr. Seuss.... 

Googlehoo mocks all the boo hoos over their ballyhooed Googlehoo coup.

Get a clue.

Googlehoo pooh-poohs a collusive coup between their crews.

It's no glue to screw you.

But, who knew it would be true, that Googlehoo would rue, that Justice could see through, Googlehoo's collusion boo-boo, and eventually sue?

Can we construe Mr. Icahn's Yahoo debut, and shareholder kung fu, as a rejection of the Googlehoo view?

Will Yahoo bid Googlehoo adieu, overcome the Microsoft taboo, and renew the review of the Microsoft view?

Google surpassing Yahoo as most visited US site; but Google-Yahoo don't really compete do they?

As Google and Yahoo continue to negotiate their search outsourcing pact, pesky competitive facts keep arising that suggest that such a deal is likely to eventually be found by antitrust officials to be illegal anti-competitive collusion.

  • Yahoo is running an AP story that says that Google has now surpassed Yahoo as the #1 "most popular website in the United States according to Comscore."
  • This is on top of Google and Yahoo being the #1 and #2 search providers in the U.S. and the leading competitors in the display advertising market, ad tools market and ad brokering market.

The operative question is not whether Google and Yahoo can craft an acceptable search advertising outsourcing pact that can pass antitrust muster, but whether the DOJ wants to encourage such intimate  and important business "cooperation" between Google, the dominant #1 in the market, and one of the only two companies that most consider to be Google's primary competition in multiple market segments.

   

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