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Must read WSJ Digital Daily post on Google

Kudos to John Paczkowski of the Wall Street Journal's Digital Daily blog for a interesting big picture perspective on Google's evolution. Don't miss it.

The gravitational pull destroying traditional journalism -- the Internet black hole of scale

Tribune's bankruptcy is fresh evidence that the recession is accelerating the demise of journalism precipitated in large part by the advent of the Internet. And where is the Internet taking the journalism profession and business? Not towards the utopian citizen journalism of conventional wisdom, but inexorably towards the gravitational pull of the black hole of the Internet -- scale.  

  • To understand the future of the journalism business, and most content businesses for that matter, one has to understand The Internet Black Hole of Scale which is comprised of:
    • Audience size and reach:
    • Advertiser network breadth and depth;
    • Publishing breadth, depth and timeliness;
    • Sales/targetting data volume, integration and specificity; and
    • Infrastructure platform economies of scale and scope.  

So why can't the journalism profession/business compete long-term with The Black Hole of Internet Scale?

DOJ almost filed monopolization case against Google-Yahoo!

Sandy Litvack, the DOJ's outside counsel on Google-Yahoo told AmLawDaily that the case the DOJ was prepared to file against Google-Yahoo was far more serious and sweeping than previously thought or known.

  • "The never-filed government complaint would have charged that the agreement violated Sections 1 and 2 of the Sherman Act, Litvack tells the Am Law Daily in one of his first interviews since the companies canned the venture. Section 1 bans agreements that restrain trade unreasonably. Section 2 makes it unlawful for a company to monopolize or attempt to monopolize trade."
  • ""It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly," Litvack says."

Google to compete directly with its media customers -- ads on Google News and Google Finance

"On Nov. 17, Google began running ads on Google Finance, a financial-news site, and said it would soon start showing ads to some users of its Google News service as well." That was the big news in the Wall Street Journal's front page story "Google gears down for tougher times."

Is Google, which owns the world's largest Internet audience, with over 700 million users, a direct competitor to all media? You bet!

The anticompetitive significance and conflicts of interest in what Google is now doing are very large.

To date Google lulled its competitors into a false sense of security in building an audience for Google News and Google Finance but not directly competing with Google's supposed media partners for online ads.

  • The Googleopoly is now behaving like any monopoly does.

The problem for media companies is that Google is a non-transparent black box, which represents itself to be an honest broker of ads -- when it is not. It obviously has a huge financial conflict of interest in serving ads.

  • How can Google claim to be an honest broker of online ads when it controls ~90% of all online avertising profits in the U.S. and is planning to blatantly self deal and front run the interests of their media customers?

What Google is proposing to do is the conflict of interest equivalent of auditing their own books, or grading their own papers.

Googlephobia? No just holding a bad actor to account

I consider myself of like mind with my friend Adam Theirer of PFF on most all issues of substance, however, I must take strong exception to his misguided take on Google and Googlephobia

In Adam's post "Googlephobia: Part 6 - the Left Begin to Turn on Google":

Google's CEO: "Do you believe we have good values?" -- or could they be sub-prime values?

Google's CEO Eric Schmidt met with the New York Times Editorial Board last week, most likely on a charm offensive in response to the Rosenkranz Foundation oxford-style debate about whether or not "Google violates its 'Don't be evil' motto." 

  • David Carr, a columnist for the New York Times who attended the Schmidt meeting and who wrote "Google seduces with utility", asked Mr. Schmidt if he should "be worried that I am putting all my digital eggs in in one multi-colored, goofy lettered basket,  he said. That depends on what you think of our company and our values. Do you believe we have good values?"

Once again, Google is truly its own worst enemy.

IRS investigating if Mozilla-Google tax treatment is legal -- Why the DOJ should investigate too

There are reports that the IRS is investigating whether tax exempt Mozilla, the foundation behind the popular Firefox browser, can legitimately claim tax exempt status when 88% of the Foundation's revenues come from Google in payments for being the default search engine for Firefox downloads. 

I believe the DOJ should also consider investigating the Google-Mozilla relationship to see if Google anticompetitively gained an advantage -- given the facts, timing and circumstances.

Great read: "Google the first firewalled monopoly" by the Register

Cade Metz of the the Register, who is always insightful on the subject of Google, has a great piece I recommend: "Google the first firewalled monopoly: pricing power goes virtual."

Why Google lost the formal debate over its ethics -- And a compendium of Google's ethical lapses

Google effectively lost its first formal debate over whether "Google violates its own 'Don't Be Evil" motto" at the Rosenkranz Foundation's Oxford-style debate in New York City, November 18. (Transcript here).

  • Before the debate the audience was polled and voted 21% against Google and 31% for Google and 48% undecided; after the debate and learning more, 47% voted against Google and 47% voted for Google, and 6% undecided.
  • Apparently, most all of the undecideds voted against Google -- that Google violated their own 'don't be evil' motto. 

What does this mean?


Q&A One Pager Debunking Net Neutrality Myths