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Has Google's dominance of search reached the tipping point asks American Consumer Institute

The American Consumer Intstitute just put out a good consumergram on: the DOJ investigation of the Google-Yahoo deal and asks if the search market has reached a tipping point.

  • The ACI consumergram is asking the right questions.
  • More entities should be, and will be, asking these types of questions going forward because the facts and Google's behavior will demand it.

As I explained in detail in my Googleopoly analysis, the search market has already tipped to Google and the Google-DoubleClick merger was a tipping point to enable Google to extend its market power in search advertising to display and online advertising as well.

As I explained the stakes of lax antitrust enforcement in my Senate Judiciary testimony:

"The Stakes of Lax Antitrust Enforcement: Will Google be enabled to become the:

“Online-advertising bottleneck provider” picking Internet content winners and losers?

More evidence of Google's conflict of interest in protecting its users from spammers & scammers

Found a smoking gun on how Google's conflict of interests actually hurts Google users, which I explain later in this post.

  • As I have blogged several times of late, here, here, here, here, and here, Google works for advertisers and publishers not users/consumers; and Google's undisclosed conflict of interest, lulls Google's users into a false sense of security that Google is looking out for users' best interests -- and safety -- when they clearly are not.
  • I have found specific evidence below that Google is not looking out for its users' best interests or safety. 

Google knows there are "potentially harmful sites that make Google users more vulnerable to spammers or scammers. I have suggested before that they could easily warn users of the danger from specific results with warnings on search result pages.

Why EU's concerned with a Google-Yahoo pact -- Google is close to monopoly share in Europe

A Yahoo-Google search outsourcing pact arguably faces even more problems with European antitrust authorities than the reported U.S. DOJ antitrust investigation, for two reasons:

Google's founders understood the conflict-of-interest in its business model from the beginning

A consistent theme in my ongoing analysis of Google, has been Google's corporate refusal to overtly disclose the fundamental financial conflict of interest inherent in their business model, i.e that Google does not work for users like they routinely claim, but for advertisers and publishers. 

  • The best example of the serious risks to users of this undisclosed conflict of interest has been how Google has reacted since early April to the dramatic increase in risk to its users of indentity theft and fraud by cyber-criminals exploiting security weaknesses in Google's search results.
  • I personally have seen the consumer devastation that undisclosed conflicts of interest can cause.
    • After the collapse of Enron, I was asked to testify in the Senate on how conflicts of interests were integral to Enron's fraud.
    • I was also asked to testify on the dangers of undisclosed conflicts of interest in the House during the tech meltdown.

Interestingly, it appears I am not the only one concerned that Google's advertising-based search model has a serious inherent conflict of interest.

Google wins as Yahoo allowed Google to paint Yahoo into a corner that hurts Yahoo shareholders

Dominant #1 Google, in calling #2 Yahoo to discuss a slow competitive search surrender by Yahoo to Google, in order to thwart a purchase of Yahoo by #3 Microsoft, apparently succeeded.

Yahoo-Google's search outsourcing pact: the fine line between collaboration and collusion

Interested observers in the Microsoft-Yahoo-Google-AOL-Ask.com-MySpace incestuous soap opera called search advertising, would be wise to bone up on the fine line between acceptable industry collaboration and illegal collusion, if recent reports prove true.

  • The Wall Street Journal reports that Yahoo may be days away from announcing "an agreement to carry search advertisements from Google.." and that Google feels "that the upside is much greater than the potential downside" from the arrangement."  
  • The Financial Times broke the story that the Department of Justice was investigating Google's interaction with Yahoo and that "the prosecution of collusion is a top priority."     

The fine line between collaboration and collusion. 

First, while many may be aware that a Google-Yahoo outsourcing deal "would likely attract intense antitrust scrutiny" there is precious little analysis on this linchpin issue -- hence the genesis of this piece.

I believe the pattern of Google becoming the outsourced search engine for most all of the Internet -- save for a few properties -- is one of the most important and least understood competitive Internet issues.  

Google's Schmidt talks about his non-neutral enterprise business plans... and double standard

CNBC's Maria Bartaromo had a rare in-depth TV interview with Google CEO Eric Schmidt.

The comments that have relevance to net neutrality were how Google's CEO, one of the biggest proponent for Net Neutrality legislation of broadband networks in the world, candidly admitted that all customers were not alike; that they have different needs; and that Google plans to charge those who want higher quality of service -- more money.

  • Bartiromo: "What about the corporate customer? I understand that there are tests going on right now. What are you hearing from that customer?"

    Schmidt: "We're working with the corporate customers to do the same thing inside their networks as we do with consumers. Now, corporate customers are
    not the same thing as consumer customers. Corporate customers have a much higher need for reliability, so we'll sign an agreement that guarantees a certain level of service. But then we charge for it.
    So that's a case where people are willing to pay for something which is free without the level of reliability. They also have other needs. They need greater security, for all the obvious reasons. And they also need better integration with all of the other services that their companies have. This is a long process. It's not a fast process. But it's very deeply valuable. And those customers we will have for 20 or 30 or 40 years as they build into our model. We like that model. It's an enterprise play. It's a business that I've been in for a long time, and one which will ultimately be very, very lucrative through Google." [Bold added]

Some Kudos for Google! Google blogged "How to avoid getting hooked" -- better late than never

Google deserves some bona fide kudos from me for blogging yesterday with some very sound and practical advice about how their users or anyone who reads their blog - could avoid getting hooked/scammed by fraudsters.

  • As a consumer, I learned a couple of new tips to better protect myself from phishing fraud.
  • The advice was clear, practical, informative and useful.

However, I was surprised that they did not choose to link to other sites in and out of government that could also be useful to consumers looking to protect themselves better.

I was also surprised it took a month for Google to say anything about how users could better protect themselves from new fraud scams that were exploiting weaknesses in Google's search engine protections so that Google was unwittingly offering up scam pages as part of their search results.

PFF's Sydnor brilliantly exposes Lessig's "quasi-socialist Utopianism" advancing net neutrality

Tom Sydnor of the Progress and Freedom Foundation has done a brilliant analysis of Professor Larry Lessig's book "Free Culture" in the important context of Professor Lessig's other works. 

  • This analysis is outstanding foundational-thinking and a must read for anyone who cares about preserving a free market Internet.  

Let me highlight some gems:

First, his conclusion:

  • "The preceding analysis shows that FREE CULTURE does demonize copyright owners and does urge the government to eliminate copyrights and impose "quasi-socialist utopianism." Nor does this pattern stop with copyrights. Indeed, the preceding analysis shows Lessig has already claimed that to Save the Net, the government must nationalize or heavily regulate:

      • The providers of Internet-access services that own the physical network infrastructure, (e.g., net neutrality);

       

      • The providers of commercial internet applications and services, like eBay, Amazon, and Google (e.g., CODE); and

       

Google backpedaling on Privacy committments... no surprise...

I had meant to comment earlier on the FT's front page story last week on: "Google resolve crumbles on 'cookies' pledge."

The intro sentence says it all:

  • "Google has failed to make any headway in dealing with one of the most controversial issues of online privacy, despite promising a year ago that it would take the lead in tackling the problem."

I can't say I am surprised -- as the old adage goes, a leopard doesn't change its spots.

  • We now know more about two things concerning Google:
    • That Privacy International, a leading privacy watchdog in the world, was very much on the mark in ranking Google worst in the world on Privacy in its privacy rankings and also describing Google as having an "entrenched hostility to privacy."
    • Google's public committments/word (albeit non-binding) during a governmental proceeding aren't worth much.
      • Google is unwisely backtracking on something very important to users and government officials.
      • They thumb their noses at everyone else's privacy at their own peril... 

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Q&A One Pager Debunking Net Neutrality Myths