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Antitrust

Washington Post: DOJ was right to block Google-Yahoo

Kudos to the Washington Post for an excellent editorial: "Searching for Dollars: The Justice Department rightly opposed a Google-Yahoo deal."

 

Conflict of Interest Questions for Google CEO Schmidt as a Transition Spokesman

Google CEO Schmidt apparently is representing that he is speaking for the President-Elect's Transition today in Washington given the attached press release, which twice mentions Mr. Schmidt's membership on the "Transition Economic Advisory Board" in an otherwise very brief release. 

  • Given the perception created, conflict of interest questions are relevant and should be asked of Mr. Schmidt today. 

 

Perception of Conflicts with the Transition Ethics Code:

Responding to more personal attacks on my views -- from People for Internet Responsibility no less!

Thanks to a competitive Internet I am grateful to be able to freely respond to personal attacks on me and my pro-Internet competition views.

 

Mr. Weinstein of www.PFIR.org, People for Internet Responsibility, recently criticized me in his blog, which is his right, however, he did it initially in a manner which appears to be at odds with how Mr. Weinstein has suggested everyone should responsibly conduct themselves on the Internet. In particular, I reference the statement below from PFIR’s website, which is the concluding paragraph of why Mr. Weinstein formed PFIR.

Google's in denial over Google-Yahoo antitrust problems -- is recidivism in Google's future?

Google's CEO Eric Schmidt is in deep denial over the antitrust implications of Google being blocked by the DOJ from brazenly trying to collude to divy up the search market with its biggest competitor Yahoo.

In an interview with the New York Times' Miguel Helft, Mr. Schmidt made a couple of very brazen assertions that will obviously concern DOJ antitrust officials and State Attorneys General interested in preserving Internet competition going forward.

First, Helft asked about the proposed Google-Yahoo deal: "...was it a mistake for Google to propose the deal in the first place?"

An Unrepentant Google Basically Taunts DOJ/State AGs to File an Antitrust Suit in the Future

Google remains its own worst enemy.

 

After dodging a certain DOJ antitrust suit from the most lenient antitrust enforcer in the modern era by withdrawing from the Yahoo ad agreement, Google’s CEO essentially spit at DOJ/State AG prosecutors by publicly and gratuitously saying: Google would have beaten the DOJ in court, nothing has changed, and that they were happy they reached out to Yahoo.

 

Google’s unrepentant stance was captured well in the New York Times article by Miguel Helft: Google and Yahoo Say Deal Would Have Survived a Suit.”

Breakingviews.com nailed Google-Yahoo demise

After reading most all of the coverage of the demise of the Google-Yahoo ad partnership, I wanted to flag what I thought was the best, which was in the Breakingviews.com section of the New York Times today by Constantine Courcoulas and Robert Cyran.

  • See this link  to the Breakingviews.com story, but be sure to skip the first unrelated story at the top and go the second story "Google Backs Off."

I couldn't agree more with it -- you can see why by checking out one of my earlier posts: "Why Google wins from Google-Yahoo postponements -- lessons from Machiavelli."  

DOJ explains why it would have sued to block Google-Yahoo if Google had not withdrawn

The DOJ released a statement explaining why it would have sued to block the Google-Yahoo ad partnership had Google not backed out of the arrangement.

In a nutshell, the DOJ said it was prepared to sue in Federal Court to block the proposed Google-Yahoo ad partnership because the DOJ concluded that:

  • The proposed agreement was anti-competitive and illegal;
  • Google has dominant market power in two "relevant anti-trust markets":
    • Internet search advertising, and
    • Internet search syndication;
  • Yahoo would have become a collaborator with Google rather than a competitor "materially reducing important competitive rivalry between" Google and Yahoo.

Bottom line:

Google has hit a very real antitrust wall. More importantly it is now front and center on the DOJ's radar screen as an aspiring Internet advertising monopolist willing to push the antitrust envelope -- unless the DOJ steps in to preserve Internet competition. 

While Google may not realize it, the world is now a very different place for Google -- it no longer has free rein to do whatever it pleases.

 

Google backs out of Yahoo agreement -- wants to avoid protracted legal battle with DOJ

Google announced it was backing out of the Yahoo agreement just a few minutes ago on its blog.

Commentary will follow.

Century Foundation asks Google to pay for content

Kudos to Peter Osnos of The Century Foundation for connecting the dots in his piece: "The Platform: make Google pay."

  • Mr. Osnos asks the pertinent question: Now that Google has conceded the principle that infomation is not free in its $125m settlement with authors/publishers, why don't newspapers and magazines insist on getting paid for their content?
  • It's a thought-provoking piece read -- I recommend it. 

Mr. Osnos' central thesis becomes even more important when you consider that Mr. Schmidt recently suggested to advertising executives that they should consider if the business model for journalism should become a not-for-profit model!

What many in the journalism industry do not appreciate is that Google is quietly cheering on the demise of modern journalism and Big Media so that it can be replaced by citizen journalists that will of course use their platform predominantly through, Blogger, YouTube, and Google Knol.

  • Google believes it can provide anyone and everyone a more efficient digital content platform than anyone else.
  • Apparently Google's real mission is to organize all the producers of the world's information -- to work for Google!

Google-Yahoo offer to cut their deal in half -- DOJ knows you can't unscamble eggs

Google and Yahoo have agreed to cut back their initial proposed agreement from 10 years to 2 and to a revenue cap of 25% of Yahoo's search business -- per WSJ reports -- in an effort to salvage their proposed ad partnership.  

What does this mean?

In practical terms, the agreement would go from being worth ~$800m to Yahoo (or almost half of Yahoo's search business) to ~$400m to Yahoo (or no more than one quarter of Yahoo's $1.6b annual search  business.)

Bottom line:

The DOJ is unlikely to agree to this new offer because:

  • This agreement would still make #2 search competitor Yahoo unacceptably dependent on #1 search competitor Google for its growth, profits and valuation. 
    • The agreement would still make Yahoo more interested in cooperating with its single biggest business relationship, Google, rather than competing with them.

Lastly, the DOJ understands, if they let even a cut back agreement go forward, it would be extremely difficult for the DOJ to ever "unscramble the eggs that this agreement would scamble" if the agreement proved problematic for competition in the future.

  • As a general rule the DOJ does not like to get into arrangements that they can't get out of if they need to.
  • It's just common sense.  

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