Yahoo

With Senate and House antitrust hearings on Google-Yahoo next Tuesday, the timing of Yahoo's new BOSS initiative, Build your Own Search Service, is designed to try and show that Yahoo is still trying to compete with Google after Yahoo partnered with Google "to enhance its ability to compete in the converging search and display marketplace."

Check out the 45 word "headline" on Yahoo's press release on BOSS. There will be a short quiz afterward.

• "Yahoo! Opens Up Search Technology Infrastructure for Innovative, New Search Experiences, Providing Third Parties with Unprecedented Access, Re-Ranking and Presentation Control of Web Search Results"

  • Yahoo!'s New Open Web Services Platform, Yahoo! Search BOSS, Extends its Open Strategy and Fuels Disruption in the Search Landscape."

The Quiz:

Don't miss the Op Ed by Richard Bennett today in the San Francisco Chronicle on net neutrality, Google's leadership of the issue, privacy, and the Google-Yahoo partnership.

• As usual, Richard is insightful, incisive and interesting.

Just learned that the Senate Judiciary SubCommittee on Antitrust has scheduled a hearing on the Google-Yahoo agreement for Tuesday July 15th, at 10:30 am.

• "The Senate Committee on the Judiciary has scheduled a hearing before the Subcommittee on Antitrust, Competition Policy and Consumer Rights on “The Google-Yahoo Agreement and the Future of Internet Advertising” for Tuesday, July 15, 2008, at 10:30 a.m. in Room 226 of the Senate Dirksen Office Building. Chairman Kohl will preside. By order of the Chairman."

The House Judiciary Committee is expected to have a hearing that same afternoon on the Google-Yahoo deal, Internet competition and privacy.

A new article/study by Harvard Business School Professor Anita Elberse challenges the validity of the Silicon Valley mantra/theory that the Internet created a new "long tail" of demand for niche products that would ultimately undermine and overwhelm the offline trend towards "big hits."  

• Thank you to Lee Gomes of the Wall Street Journal whose excellent article: "Study Refutes Niche Theory Spawned by Web" brought the new Elberse research to my attention.
  • From Mr. Gomes article: "Prof. Elberse looked at data for online video rentals and song purchases, and discovered that the patterns by which people shop online are essentially the same as the ones from offline. Not only do hits and blockbusters remain every bit as important online, but the evidence suggests that the Web is actually causing their role to grow, not shrink."

Why this is such important new research is that much of the Silicon Valley 'pixie dust' that fuels so many of the new business models involving social networking, crowdsourcing, etc. is predicated on the "Long Tail" book/theory by Wired magazine editor Chris Anderson.

Pablo Palatnik, an online marketing expert, recently launched his own blog, the Palatnik Factor which I recommend; Pablo is also a contributing writer for the Search Engine Journal -- which is where I came accross his work when he wrote a dead on piece questioning "Google Adword's Quality score: affilitates worst nightmare." 

• Because of that post, I reached out to Pablo with my post: "Why a lack of openness sullies the integrity of Google's ad auctions," and he posted it with a comment.  

A couple of my recent pieces are particularly relevant to online marketers:

http://www.precursorblog.com/content/why-not-a-marketer-bill-rights-google-yahoo-cartel

http://www.precursorblog.com/content/google-adwords-not-neutral-charging-more-slow-loading-sites

Google took substantial market share from their Internet advertising competitors in 1Q08. Google's U.S. Internet advertising revenue grew ~7% sequentially from 4Q07 to 1Q08, while the Internet advertising revenues of Google's competitors fell ~8% during that same period, per newly released IAB figures and Google's 4Q08 figures.  

• Google's Internet advertising dominance appears to be accelerating as all its sequential U.S. growth is coming from competitors' market share -- not from growth in the Internet advertising marketplace -- which appears to be one quarter into a sequential Internet advertising recession.
  • More simply, if Google was not able to take substantial sequential market share from its competitors in 1Q08, Google probably would not have grown revenue sequentially in the U.S last quarter. 

In 1Q08 Google now controls ~45% of all U.S. Internet advertising revenues, which is up from ~42% in 2007, which is up from 35% in 2006, and which is up from 30% in 2005 -- according to base numbers reported by IAB and Google.

To the extent Google and Yahoo's new partnership in search and display advertising diminishes #2 Yahoo's viability to competitively discipline #1 Google's dominance of search and online advertising, online marketers and advertisers need Google-Yahoo to commit to respect a "Marketer Bill of Rights."

• Google-Yahoo jointly control:
  • 83% of U.S. search advertising share per eMarketer; and
  • 64% of all U.S. Internet advertising revenue per the IAB.
• Google's has ~1,000,000 advertisers in its network, compared to Yahoo's ~300,000 and Microsoft's ~75,000.

Marketer's Bill of Rights for the Google-Yahoo Cartel:

U.S. marketers do not currently enjoy, but should have the right to:

• Competition among application and service providers of search, display and other forms of online advertising.  
  • Independent third-party oversight, audit and dispute resolution of their auctions, practices, bans, and internal controls.
• Fair representation and truth in advertising through the open, full and public disclosure of all of Google-Yahoo's joint and individual financial conflicts-of-interests.

The new Google-Yahoo partnership to better converge the search and display markets is skating on thin antitrust ice that will only get thinner over time -- unless Microsoft or some unknown competitor somehow starts taking lots of market share from the new Goohoo. 

What are the important takeaways here? 

First, at core, the Google-Yahoo partnership is clearly about trying to snuff out Microsoft as a competitive force on the web. 

For those who like the written format, here is the link to the transcript of Chip Griffin's interview of me on all things Google.

• The transcript is just below the podcast button to hear the interview.

This interview turned out to be one of the most comprehensive and in-depth discussions I have had on all things Google -- that's been captured for web listening or reading.

We discussed:

Here is the link to Chip Griffin's 28 minute interview of me on "Conversations with Chip Griffin," an in-depth conversation about many of the reasons why I believe Google is becoming such a big problem and why I personally spend so much time focused on Google.

I believe you will find it an informative, interesting, and entertaining interview covering all things Google, the online economy, net neutrality etc.

• Enjoy!