Open Internet

Google has another big "oops!" problem where its actions in the marketplace do not match the line they are feeding to the FTC/EC antitrust investigators who are reviewing Google's proposed acquisition of dominant ad-server DoubleClick.

• It appears that Google's "innovation without permission" culture is confronting Google's antitrust lawyers with yet another merger review mess to try and clean up.

So what's the new big contradiction/problem?

• Google's lawyers have been arguing to FTC/EC authorities that Google is not a competitor to DoubleClick because Google only does search and DoubleClick only serves display ads.
• How can there be any antitrust problem if they don't compete argues Google?
• Well today Google's YouTube network has begun selling overlay ads to select videos running on YouTube.
• According to ComScore, YouTube is the Internet's most-visited video website with ~189 million visitors in July.
• That means that Google is now the exclusive ad server of display/rich media advertising to the largest video site in the world.

Its now hard for Google to still claim with a straight face that they aren't in the ad-serving business and that they don't compete directly with DoubleClick.

Google continues its self-serving campaign of "open for you, but not for me."
The master of the double standard, Google loves to claim that Google is "open" and even has the gall to name its net neutrality coalition the "Open Internet Coalition."
However, does Google really support "open" principles? In other words, Google talks the talk, but does it walk the walk?

• Or is Google just playing lip service to "openness" in order to gain a competitive advantage with special Washington treatment and generous corporate welfare?
• The facts indicate it.

Elise Ackerman of the San Jose Mercury News had a noteworthy and relevant article on this issue: "Google's growth has come at a price."

• The article mentions that concerns over the lack of "openness" in Google's search, are "driving the effort to develop an open-source search engine."
• "Search should be transparent, open and participatory," said Jimmy Wales, founder of Wikipedia... Wales says Internet search is plagued by the same problems that bedeviled proprietary software - lack of accountability, transparency and freedom."
• "Google closely guards its top-secret formula for ranking Web sites, making it impossible for a publisher to know why a site might enjoy front-page ranking one day in the search results and drop to Page 100 the next."
• "... Wales' programmers will publicly disclose their algorithms for ranking results in the Wikia Search project."

Well Google, if openness is truly an important principle to Google, why not agree to make Google's search algorithm, which is the industry's ultimate "Black Box", "open" to all so all can benefit?

Google must be worried about their Doubleclick acquisition having arranged an op-ed in the Wall Street Journal today entitled Googling 'Monopoly' by PFF President Tom Lenard and Emory University professor Paul Rubin.

• While Google must be thankful for the placement in the WSJ, they have to be bummed about the unfortunate title.
  • Google loves to generously slather the "opoly" epithet on any formidable competitor who is in their way, so it must drive them crazy when it sticks to them in the WSJ.

First, let me say that I genuinely respect Mr Lenard and Mr. Rubin, and understand that on antitrust issues, analysts can honestly disagree on outcomes and impacts.

Liberal blogger Matt Stoller of OpenLeft has a post at Save the Internet that lamely tries to rewrite "the history of net neutrality" in his commentary about his interview with FCC Commisioner Michael Copps.

A couple of readers kindly pointed out that I made my own oops in my early August blog post: "Oops! Googleopolist's wife speaks out of school on pending merger."

I regret any confusion I created in mistaking that "Google product manager" Susan Wojcicki" was married to Google co-founder Sergey Brin -- in fact she is the sister-in-law of Google co-founder Sergey Brin, and also one of the earliest employees of Google.

Investors Business Daily and Pete Barlas had a super antitrust scoop today embedded in its article "Video, Cell, Display Ads get More Google Focus".

The article quoted "Google product manager" Susan Wojcicki, (who also just recently married Google co-founder Sergey Brin), candidly defining the online ad market to reporters.

• Her blunt public market defintion must have Google's antitrust lawyers absolutely cringing and muttering expletive deleteds.

During a meeting with reporters, IBD quoted Ms. Wojcicki saying:

It seems that our friends up North may also be concerned about the anti-competitive impact of the Google-Double-Click merger.

CIPPIC, the Canadian Internet Policy and Public Interest Clinic, is requesting that the Canadian authorities review the Google-Double-Click merger to determine if it is anti-competitive.

• Seems from their filing that they have similar concerns as the FTC and the EC.
• Could this be evidence of momentum in the growing concern over this merger? Yep. 

I've done a lot of work on the facts surrounding this merger case and am very confident that the more authorities learn about the facts of the case -- the more concerned and troubled they will get about the profound and broad implications this merger portends for the future of the Internet business model for accessing content.

The outrage over Google-Youtube's complicity in rampant content theft and piracy continues to spread around the world.

• As reported by the AP in "Youtube blasted over copyright issues": 
• "A coalition of Japanese television, music and film companies slammed YouTube Thursday, saying the online video sharing service was not doing enough to rid the site of cartoons and other clips that infringe copyright." ...
• "There is no middle ground," Matsutake said. "We demand that all copyrighted material be removed immediately."

Let's focus on the corporate scofflaw pattern here: American, Japanese, and European content owners accross a wide swath of content industries are all outraged and suing Google for theft.

Johna Till Johnson of Network World, has got Google's number in the article "Net Neutrality? Google, go first!"

• "Forget "don't be evil" -- Google's real motto is: "Just trust us (and pay no attention to the man behind the curtain).""

  "Sorry, fellas, I'm not the trusting sort. And I always worry about the man behind the curtain. The reality behind the propaganda is this: The "open" company's considerable fortunes are based around the world's most proprietary search engine. And as for "neutral" -- try Googling Google, and you may notice something surprising: very few negative comments on the company pop up. Odd, no?"

I wanted to commend and spotlight a critically important and completely under-reported/under-appreciated part of the FCC Chairman's statement on the 700 MHz auction released yesterday:

• "We must continue to encourage the critical investment needed to build the next generation wireless network.  Since I have been Chairman, I have advocated strongly that applying network neutrality obligations, unbundling, or mandatory wholesale requirements to networks can undermine investment incentives.  I do not support such regulations.  The Order we adopt today does not apply these regulations to this block or any other block." [bold added for emphasis]

This is very important, welcome, commendable, and strong affirmation of the FCC's broad deregulation policy -- that was completely lost in the gaggle of press coverage.