DoubleClick

Clearly the market badly under-estimated Google's strength and resilience in a slowing economy given the ~17% leap in Google's stock price in after hours trading.  

• Google's notorious lack of openness with investors helped make the market inefficiently, way-over-cautious.

42% revenue growth for an $18b a year company is amazing.

• It is also amazing for there to be a business of this size and global scope that strongly asserts to have a business model that is unaffected by the turmoil in the macro-economy.
• It certainly suggests some market power and network effects at work here, because this strong performance and guidance on the effect of the macro-economy -- is not "normal."

What I find most interesting is I don't think that the market yet understands what a growth kicker the DoubleClick acquisition will be for Google going forward. Google was coy about it and did not connect-the-dots for investors -- that they clearly see.

Google co-founder Sergy Brin, one of Google's most avid net neutrality proponents, candidly admitted today in Google's 1Q08 earnings call with investors, that Google "improved" its international search quality by "demoting non-country search results" on Google's improved country home pages.

This is interesting for a few reasons.

Neil Berkett, CEO of Virgin Media, Britain’s second-largest broadband provider, “called the principle of network neutrality—all content being delivered equally to all users—"a load of bollocks" per eWeek’s article: “Virgin Media may ignore network neutrality.”

• “Berkett said Virgin is considering a fee-based system for content providers wishing to have their traffic moved faster than others.”

After looking up the definition of “bollocks,” it is clear that his comments colorfully echo some of the same sentiments in America that prompted Google to work with Moveon.org to organize SaveTheInternet and ItsOurNet (the predecessor to the Open Internet Coalition) and manufacture the net neutrality issue out of whole cloth.

The comments and the article are a powerful reminder of the fantasy corporate welfare economics of net neutrality, where users are expected to bear all the costs of video distribution for companies like Google and Amazon.

The Wall Street Journal's scoop that Yahoo is considering a two week trial of outsourcing search to Google -- is also a trial balloon testing the FTC's antitrust mettle.

If you don't remember, the last sentence of the FTC's Majority opinion approving the Google-DoubleClick merger was a clear warning to Google:

• "We want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the Commission intends to act quickly."

Let's also put this into context.

I want to thank Mike Masnick for his good comment to my blog post. This post is part of a string responding to Mr. Masnick's criticism of my original blog post entitled: "Google unabashed about gaming FCC auction process to fleece the American taxpayer of $7 billion."

I accept his gracious apology for starting his original critique with an ad hominem attack and I in turn want to apologize to Mr. Masnick for incorrectly assuming that he was on Google's side when he says he has no side -- I take him at his word.

This post responds to Techdirt's, Mike Masnick, who came after me for my post of Friday in which I estimated that Google fleeced the American Taxpayer out of $7 billion in the latest FCC auction. 

• I commented on Mr. Masnick's post last night (#18) and Mr. Masnick quickly posted a response (#19) claiming my adding my "two cents" to the comment string about me -- was not enough in his judgment. 

So lets start with Mr. Masnick's retort to my assertion that most of the comments were just ad hominem attacks and not based on the merits of my charge that Google fleeced the American Taxpayer. Mr. Masnick replied that he and Derek used their names and why did I not respond to them.

Martin Geddes of Circle ID challenged my estimation methodology in reaching that Google fleeced the American taxpayer for $7 billion.  

With all due respect to Mr. Geddes, first his analogy of taking "a tasty apple, a yummy banana and a mouldy pear, is simply not analogous here. One doesn't pay $4.7b for a "mouldy pear." The regulations did not make the spectrum itself bad to eat, but simply restricted the use of the spectrum or in Mr. Geddes example how someone would be allowed to eat a good pear. People will pay less for a fruit if they are restricted on when and how they can eat it. 

Second, Mr. Geddes suggests I am confusing the American taxpayer with the American public. I most certainly am not. I am recognizing that there is a very specific law, the 1993 Budget Act, which effectively defines that the American public is the American taxpayer because the purpose of these spectrum auctions are to reduce budget deficits. One may not agree with how the law defines the American public in this instance, but that opinion doesn't change that it is the operative law here.  

My estimate in my blog was trasparent and simple so everyone could see how I got my figure.

• The important point here is that Google fleeced the American taxpayer of several billion dollars, was it $7b? $5?b $9b? $3b? -- it depends on the estimating method.
• My estimating method was straightforward, transparent, logical, simple and easy to understand. 
• I stand by it until someone else comes up with a more defensible estimate.    

My eyebrows raised when I read the FT's article: "Google loses talent that turned chos into capital."

What attracted my attention is that Google is reacting to the ~37% drop in Google's stock price by spending shareholders money on giving restricted stock to employees who are no longer satisfied with stock options.

I wonder what the price tag will be for this, it could be significant....

Surprisingly, Google continues to keep its users in the dark on the new reported cyber-security threat where cyber-crooks have infiltrated Google's searches putting them at heightened risk of identity theft and fraud.  

The San Franciso Chronicle in its article "Hackers infiltrate Google's searches" followed up on the original USA Today article "Google searchers could end up with a new kind of bug."  I blogged on the USA Today story and explained why this problem is a big deal.  

• Per the Chronicle article, "Google is working on a filter that will find and automatically block such malicious Web addresses, a spokesman said Tuesday. In the meantime, it has been contacting affected organizations to advise them on how to fix their sites' vulnerabilities."
• WHY ISN'T GOOGLE WARNING ITS USERS!  Google users are the ones that are at immediate risk of losing their identity and private information to crooks forever -- not the websites.  

Apparently, from what I have been able to gather from my sources -- Google is under the illusion that because they don't control the websites that are infected -- they don't have an obligation to warn their users.

Let's review the facts of why Google may have: a budding user trust problem, a potential PR disaster on its hands, and a potential legal contingent liability/class action lawsuit vunerability for shareholders to worry about.

USA Today broke a much under-appreciated and potentially blockbuster Internet security breach story: "Google searchers could end up with a new type of bug." Kudos to Byron Acohido and Jon Swartz, who reported it in USA Today, and also blogged on it at ZeroDayThreat.com, a site for their book "Zero Day Threat" which defines a Zero day Threat as "a threat so new that no viable protections against it exists." 

• In a nutshell, the article and blog post explain how cybercrook hackers have figured out how to use and leverage Google's search engine results "to spread spam, and carry out scams. Typically it also lets the attacker embed a keystroke logger, which collects and transmits your passwords and any other sensitive data you type online."
• This new cyber scam ring is expected to spread rapidly, increasing from a "few dozen major websites" today, to  "hundreds of high-profile websites" in the next few weeks.
• "...in March alone... security researchers found several hundred thousand corrupted Web pages returned in common Google search queries."

Why this is a big deal: