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New evidence bolstering why Google-DoubleClick merger is anti-competitive

The New York Times has twin articles today that provide fresh additional evidence of why the Google-DoubleClick merger is anticompetitive: "Google to sell Webpage ads on Mobile phones" and "Times stops charging for parts of its website." 

The first article is yet more compelling evidence that Google's main merger defense -- that Google and DoubleClick don't compete in serving ads -- is simply bogus.

  • The intro sentence of the Mobile article says it well, "In another step to extend its dominance of online advertising, Google said Monday that it would begin selling ads on Web pages that are viewed on cellphones."
  • In other words, Google is entering the ad-serving business to cellphones.
    • Why this is significant is that Google CEO Schmidt often says there are a billion plus wireline Internet users globally, but over 2 billion wireless users that will increasingly be accessing the Internet through wireless devices. Wireless is the next big ad-serving frontier. 
  • This is on top of Google's recent announcement that Google has begun serving display ads to Youtube, which is significant because overnight, Google has become the global ad-serving leader of rich media to online video viewing. That's because Google is the exclusive ad server to the largest and most viewed internet viewer network globally, Google-owned YouTube.
  • This is strong additional evidence of one of my central points in my "Googleopoly: the Google-DoubleClick anti-competitive case" white paper, found at
    • My point there was that ad-serving was just a ones-and-zeros digital processing function and that Google's dominance in text ad serving and contextual ad-serving could easily be directed to do the type of display and rich media ad-serving that DoubleClick dominates.
    • The new evidence that Google is serving display and rich media ads to the new venues of video through YouTube and mobile through their new cellphone advertising network belies the claim that Google does not serve ads in competition with DoubleClick.
    • Google's argument assumes that antitrust enforcers are either stupid or that they don't do their homework or understand how Google's vast infrastructure "cloud" can serve any kind of ad to any destination on the Internet.

The second article on how the New York Times itself has chosen to exit the online subscription model in favor of online advertising exclusively -- is additional powerful evidence of the incredibly high stakes involved in the Google-DoubleClick merger. That's because online advertising is the only proven business model for monetizing content on the Internet

  • That bears repeating -- online advertising is the only proven business model for monetizing content on the Internet, and the anti-competitive case against Google-DoubleClick is that the merger will create extraordinary and unbeatable network effects that will enable Google to become the only real choice for businesses seeking to efficiently monetize their content on the Internet and the only real choice for website publishers in gaining efficient access to Google-DoubleClicks dominant chokehold on Internet advertisers.
    • The NYT move to only online advertising follows the LA Times experience.
    • Reportedly Rupert Murdoch is considering a move to online advertising model for the Wall Street Journal as well.
    • The highest profile company that abandoned the subscription model for online advertising was AOL, which was in the news today for moving its leadership from Northern Virginia to New York City.
    • The New York Times article on this had a great quote that summed up the relevant antitrust trend here.
      •  “The business model for advertising revenue, versus subscriber revenue, is so much more attractive,” he said. “The hybrid model has some potential, but in the long run, the advertising side will dominate.”

Bottomline: The more evidence, the more obvious it becomes that the Google-DoubleClick merger is about whether antitrust authorities around the world will enable one company to gain through acquisition -- de facto bottleneck control over online advertising -- the only proven monetization engine for Internet content globally.

  • Google-DoubleClick is the enablement of anticompetitive network effects on steroids: no other company could come close to matching the combined market power of the #1 and #2 networks of Internet users/viewers, Internet advertisers and Internet publishers/websites.
  • In other words, no other company could come close to the global scale-scope efficiencies Google-DoubleClick could achieve in online advertising -- with the permission and assent of antitrust authorities.