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Competitors question Google buy of DoubleClick
If ya lose the auction, get the FTC involved
skibum

WebmasterWorld Administrator skibum us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3312143 posted 6:02 am on Apr 16, 2007 (gmt 0)

MSFT, TIme Warner, other companies hope to get govt to look more closely at Google purchase of DoubleClick [marketwatch.com]

From MSFT lawyers:

"Google's purchase of DoubleClick combines the two largest providers of online advertising delivery and is going to reduce substantially the market competition on which Web sites rely on to provide advertising," The Journal quoted Brad Smith, Microsoft's general counsel, as saying. Smith said that, taken together, Google and DoubleClick would handle more than 80% of the advertisements served up to third-party Web sites when a user pulls up a page, the Journal reported.

Let's hope the feds know what they are looking at and able to size this up. It just might put a bit to much power in the hands of Google.

From another thread "Don't fear the Google" [webmasterworld.com]

People increasingly compare Google to Microsoft in the mid-1990sat the height of its power, arrogant at times. Is that a fair comparison?

The comparison is absolutely false. And the reason it's false is that people do not understand the strength of the Microsoft monopoly. Microsoft had 90%-plus market share in a market where it was impossible to switch. And Google has neither. It certainly does not have that market as best we can tell, and it's trivial to switch. Microsoft hid behind the user-choice argument.

So if this goes through & Google does indeed handle more than 80% of the ads served up, it seem more and more like a monopoly. It is also the same strategy MSFT used to get everyone to use their products and put people out of business. Give away what others charge for to get them locked in to using your products. Analytics, free, optimizer, free, DoubleClick PPC management, free?, DoubleClick ad serving, free?

Do no evil?

 

weeks

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3312143 posted 12:56 pm on Apr 16, 2007 (gmt 0)

And thus the Internet moves into the real world....

What you are seeing here happens in many industries. If you are selling consumer goods to retailers right now, you are complaining about Wal-Mart and Macy's. In every industry's history there is this huge monster which develops that everyone has to deal with because it brings great efficiencies and lower margins due to scale. And, they also offer much lower return per unit and little or no flexibility.

Talk so a firm such as Rubbermade on how they handled Wal-Mart. Wal-Mart made them tons of money--for a while. But, then, Wal-Mart took control of what they were selling. Then Wal-Mart decided consumers where not that impressed with the Rubbermaid brand. It was rough.

I have no love for MS, but they might have a point worth considering here.

nonanet

5+ Year Member



 
Msg#: 3312143 posted 1:40 pm on Apr 16, 2007 (gmt 0)

That deal reminds me a little of when Verisign aquired Thawte back in 2000 - essentially creating a monopoly in SSL certificates. There are now other (broadly accepted) vendors of SSL/TLS certs, but back in 2000, swallowing Thawte gave Verisign nearly a 100% market share in that business... not that the Google-DoubleClick deal is that bad now in terms of market share - but it looks pretty similar.

europeforvisitors



 
Msg#: 3312143 posted 1:44 pm on Apr 16, 2007 (gmt 0)

So if this goes through & Google does indeed handle more than 80% of the ads served up, it seem more and more like a monopoly.

In the United States, at least, a monopoly isn't illegal per se. A monopoly is illegal only if it was achieved by improper means, or if the monopolist abuses its power.

Also, having a monopoly or near-monopoly is no guarantee that a company will continue to enjoy that position. Example: Archer Daniels Midland once had a dominant share of the ethanol market; its market share is now about 20%. And that's in a sector where the cost of entry is much higher than in Internet advertising.

blaze

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3312143 posted 1:46 pm on Apr 16, 2007 (gmt 0)

Microsoft calling Google a monopoly is beyond funny.

However, fact is

-> more advertisers means more publishers want to do deals with google to get at those publishers.

-> More publishers means more adverterise want to hook into Google's network

-> More advertisements means a greater way to profile IP's and therefore more relevant search results / better ad results.

Google may be beyond the arms of anti-trust in how they do business, but aquiring major competitors like this is a completely different issue. Not something people like to see happen.

Jonerock1t

10+ Year Member



 
Msg#: 3312143 posted 1:48 pm on Apr 16, 2007 (gmt 0)

Its interesting to see Time Warner are one of the companies wanting the government to look into this - was there not a similar case with them when they joined up with AOL?

carguy84

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3312143 posted 5:22 pm on Apr 16, 2007 (gmt 0)

With 80% of the ad market comgin from one source, wouldn't that mean it's just easier to block ads now?

cabbagehead

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3312143 posted 7:17 pm on Apr 16, 2007 (gmt 0)

Umm ... let's see. How long have I been telling everyone on this board that Google would be regarded a monopoly? 2 years? Everyone still thinks I'm crazy though.

By the way - I recently read that the latest estimates are that Google controls over 70% of search traffic now too. :p

rarethings55

5+ Year Member



 
Msg#: 3312143 posted 9:10 pm on Apr 16, 2007 (gmt 0)

"With 80% of the ad market comgin from one source, wouldn't that mean it's just easier to block ads now?"

Well said.

This is ridiculous. Looks like someone's jealous they didn't get to cut the pie before the first slice was taken.

This is so far from a Monopoly it's absurd.

TinkyWinky

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3312143 posted 9:47 pm on Apr 16, 2007 (gmt 0)

This is so far from a Monopoly it's absurd

So what do you call it then.

Sorry, but a real basic view of a monopoly is that one company controls the lions share of a single market - so how do you figure that it's absurd tht Google wouldn't have a lion's share of the online advertising market with this deal?

I know it's a lot more complicated than that, but this deal will be bad for everyone in the long run - although blocking 80% of ads would be nice sometimes ;)

TW

sitetruth



 
Msg#: 3312143 posted 10:35 pm on Apr 16, 2007 (gmt 0)

In the United States, at least, a monopoly isn't illegal per se. A monopoly is illegal only if it was achieved by improper means, or if the monopolist abuses its power.

Actually, no. The Clayton Act says "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."

The Justice Department has veto power over big mergers like this. Enforcement of this under Republican administrations has been weak, but that's the law.

skibum

WebmasterWorld Administrator skibum us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3312143 posted 11:12 pm on Apr 16, 2007 (gmt 0)

There's a lot of different ways to look at this. From an advertiser perspective, it could be beneficial if you pay less for all the services needed to run ad campaigns and your campaigns are better targted while the auction marketplace determines what you pay for advertising.

OTOH, it gives Google the data and then the knowledge to know what everything is worth and price it just low enough so the advetiser can stay in business but Google can make all the money from it.

oldpro

5+ Year Member



 
Msg#: 3312143 posted 12:50 am on Apr 17, 2007 (gmt 0)

Google is a natural monopoly and there is nothing illegal or morally wrong with this. Natural monopolies acting in its on self interest will do no harm to the market it serves.

rarethings55

5+ Year Member



 
Msg#: 3312143 posted 12:50 am on Apr 17, 2007 (gmt 0)

"So what do you call it then.

Sorry, but a real basic view of a monopoly is that one company controls the lions share of a single market - so how do you figure that it's absurd tht Google wouldn't have a lion's share of the online advertising market with this deal?

I know it's a lot more complicated than that, but this deal will be bad for everyone in the long run - although blocking 80% of ads would be nice sometimes ;)

TW"

I call it a purchase. Not a good or bad purchase; I'll let others voice opinions on whether or not it was good or bad. A monopoly is not a company that controls a lion's share of a market.

A monopoly is exclusive control, a single entity having ALL control or mainly (my favorite) when a company is allowed to interfere with FREE COMPETITION. Monopoly is also a board game ;)

Google's purchase of doubleclick doesn't fit into any of the above statements. OF COURSE everyone against google is going to scream monopoly, and the google haters will jump into the bangbwagon with their .22's.

Almost no industries shift market share faster than the advertising industry. How long did google stick with only text-based ads? Now they need to establish themselves a bit more with CPM.

Also I don't see how this purchase BLOCKS ENTRY into the advertising sector in any way. Do you?

(BTW any CPM ad can be blocked with even basic firewalls).

AhmedF

10+ Year Member



 
Msg#: 3312143 posted 7:11 am on Apr 17, 2007 (gmt 0)

Yep, Overture doesn't make a dime.

Oh wait ...

Compworld

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3312143 posted 7:46 am on Apr 17, 2007 (gmt 0)

If the DOJ and EU allow this to happen shame on them. They do not know what they are doing.. This could have dire consequences for online advertising in general. How would you like it to know that basically all advertising will be controlled in some way another by one company. That company may be your friend now.. But when they know they can do no wrong and nothing will happen to them. They can dictate pricing, revenue share, models, etc. With them controlling the most widely used platform is just unthinkable. If Yahoo! and MSFT were smart, they would immediately ban Double Click from being used on their sites. This would block out many of the top sites. Yahoo!, eBay, MSN, Hotmail, Yahoo! Mail, etc. If IAC, 24/7 Real Media, AQuantive, and other networks also do this, then there will be some sort of control on the situation. I can only really see MSFT and Yahoo doing this. The others.. I do not think they have the nerve. That is really the only play MSFT and Yahoo! have. It can also start a trend that may catch on. I also think it is ironic that Time Warner (AOL is owned 5% by Google) is objecting to this acquisition. If AQuantive bans Double Click from Atlas, that would show some strength too. If they all just surrender to Google, there goes the Internet Advertising Neighborhood. Granted, MSFT has a monopoly in the OS, but no corporation really tried to nip at them with any success. Apple is gaining share now aggressively, so the numbers will adjust in time. It would still be a two tiered monopoly. But, here's the difference. There are millions of publishers, agencies, advertisers, networks, etc. That utilize Double Click. Now that all of this information is going to be part of Google, it is like receiving this information for free. In addition, they will be able to offer unfair, albeit better targeting because of these other users, not because of their efforts. This is unfair competition. It can be considered like a type of corporate espionage.

Tread very lightly here. Think about what I just wrote. If you think about it clearly, you can see the puzzles does not show there is anything better for the users, only Google. Everyone should state their objection and bring for to the US DOJ and EU regulators. I believe there is a good change the EU will object. With the DOJ and the scandals... not to sure. There was an old tale I believe from WW II. It goes something like this "They came for the gypsies, I was not a gypsy, so I was not worried. They came for the handicapped, I was not handicapped, so I was not worried. They came for the gay's, I was not gay, so I was not worried. They came for the Jews, I was not Jewish, so I was not worried. They came for the Christians, I was not Christian, so I was not worried. Then they came for me, and there was nothing I could do.

Granted, this is not in the same context, as one is talking about human lives, and this is about Internet Advertising, but I think you get my drift. This can hurt the agencies, and the publishers, and the networks, and possibly the advertisers in terms of data. Eventually it could effect something you do care about. Once it does, it could be too late to stop or state your feelings.

Hate to say it, MSFT is right on this one...

grelmar

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3312143 posted 8:36 am on Apr 17, 2007 (gmt 0)

I've mostly just been skimming and reading here for the past couple of years, but before that, when I was more active, I remember saying once that there would come a day when we stopped referring to Google as a search engine, and just referred to Google as an Ad Agency.

Anyone who's worked for a large Ad Agency knows that the creative process behind advertising is driven by the analytical process. Study your target demographic, study your product, study your competitor, create and place your ad accordingly.

Google has some of the best demographic data on the planet. Search and analytics are merely a means to an end - the end being getting to know demographic data for the purpose of serving up ads.

They claim there's a Chinese Wall between the search arm and the advertising arm, but do we really want to believe them? All that knowledge under one roof, with such a beautifully crafted way to exploit that knowledge, do you think maybe there's a few sally ports in that wall?

Now Google is taking over even more of the online advertising market, and as mentioned above, the acquisition is only partly about gaining market share. DoubleClick has some pretty spectacular demographic data of its own.

With a combined knowledge base like that, big advertisers would be foolish to take their ad revenue anywhere else. If you're a big advertiser (think Blue Chip companies), then you know the game. And you take your ad dollar to the company that best knows the market you want to reach.

Google alone is the Gorilla in the room. Google and DoubleClick together make for the Gorilla and it's Wife. If they combine, watch some ad dollars shift. The dollars will shift toward the merged entity, not away from it.

This is very much a monopolistic play. MSFT may be the pot calling the kettle black. But the kettle is still black.

webdoctor

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3312143 posted 8:50 am on Apr 17, 2007 (gmt 0)

With 80% of the ad market comgin from one source(...)

the latest estimates are that Google controls over 70% of search traffic now too

Is 70% (or 80%) market share by one company "too high"?

For comparison, what percentage of desktop PCs in the US run Microsoft Windows? What percentage use Microsoft Office?

westsider

5+ Year Member



 
Msg#: 3312143 posted 12:20 pm on Apr 17, 2007 (gmt 0)

Google is a more dangerous monopoly that Microsoft ever was.

1) It has the power to make any web site that it dislikes go away by making it disappear from the organic results or by increasing its minimum bids in adwords. It has claimed in court that page rank is an "opinion" and that it can punish competitors with low page ranks if it chooses.

2) It has used its pricing power to increase its advertising rates (i.e. "landing page quality") 3-fold or more with black box algorithms that totally obliterate the idea of an advertising rate card. This power over other companies marketing essentially gives Google the
ability to pick winners and losers in every online market.

3) It's using classic monopoly tie-ins to promote its less popular services. For example, Google local is already the leader in local online yellow pages and it promotes this service in the prime position of top left results. If I worked for any other yellow page company except Google, I'd be looking for a new job.

4) Whenever it spots a fast emerging new site like You Tube, it buys it. Since it sees all the searches, this is easy to do.

5) With the Doubleclick purchase, its looking to consolidate its grasp on all Interent advertising.

6) As typical of monopolists, its treats the outside world with contempt and arrogance as evidenced by the major lawsuits from the book publishers and now Viacom. Google's attitude toward copyright infringements is "sue us". The reason that Google is so profitable is that it pays nothing for content. And most of the copyright holders are so desperate to get traffic, they give their content away for free. Google is a huge threat to the economics of publishing (where people get paid for their work).

What really hurts is that we had so much hope that Google would be different and now its worse than Microsoft.

I'm hoping to see at some point in the near future a non-profit search engine that refuses to accept advertising. This gatekeeper function that is increasingly played by search is way to critical to be left to one, for profit company.

ddogg

10+ Year Member



 
Msg#: 3312143 posted 5:24 pm on Apr 17, 2007 (gmt 0)

I agree with westsider. I still like Google because I make money with them, but some day I'm sure that will no longer be the case. They raise PPC prices every few months with tweaks to their algorithms. Their goal no doubt is to ensure we advertisers get just enough ROI to keep advertising. They will keep squeezing as long as they can.

ispy



 
Msg#: 3312143 posted 5:57 pm on Apr 17, 2007 (gmt 0)

Google = Goo(b)le = Gobble

ddregallo

5+ Year Member



 
Msg#: 3312143 posted 6:17 pm on Apr 17, 2007 (gmt 0)

If anyone has the resources available to be real competetion for Google is MS. If they're so concerned with Google's presence in the ad market, maybe they should offer up an a better alternative.

Let the free market take it's course. MS of all people should understand this.

</dan>

europeforvisitors



 
Msg#: 3312143 posted 6:28 pm on Apr 17, 2007 (gmt 0)

It's worth noting that Lawrence Lessig, the law-school professor and "special master" in the Microsoft antitrust case, is now saying that he and the DOJ were wrong in pursuing Microsoft.

[wired.com...]

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