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|NY Times Background Story on DOJ AntiTrust Investigation|
AntiCompetitive Behavior or Out Side the AS/G Lines?
New York Times profile of a businessman who got on the wrong side of the Google quality guidelines entitled Stuck in Google’s Doghouse [nytimes.com]
|"Your landing pages will continue to require higher bids in order to display your ads, resulting in a very low return on your investment," a Google executive named Nathan Anderson wrote on Jan. 2, 2007. "Therefore AdWords may not be the online advertising program for you." |
Two days later, in another e-mail message, Mr. Anderson told Mr. Savage to "please refrain from repeatedly contacting our team."
|Google does not have "such a huge percentage business that all others combined are inconsequential." That may be true of one advertising category (search and contextual text ads), but so what? Unless the site we've been discussing is a click arbitrageur, why should it have to rely solely on search or contextual text ads for traffic and revenue? |
Ordinary human beings do not have the capital or the agility to simply change their business model overnight. If they did then Google would not have a monopoly in this sector. In the hypothetical world that exists solely for your argument yes, they could just go out and do something else the next day. In the actual world thousands of individuals and businesses are trapped by the real-world stranglehold that Google has on this sector, their monopoly. In absolute terms there are no monopolies. In the 1870's to the 1900's there was nothing stopping people from going out and drilling their own oil wells, opening their own steel mills and building their own railroads, but somehow the Rockefellers and the Vanderbilts of the world held on to their monopolies.
The only growth sector in advertising is monopolized by Google.
Keyword arbitrage is not wholly a parasite in this market, it does help to set values. While I personally avoid it, it exists because there is imperfect information in the marketplace. A greater number of players would help, but since there is a monopoly Google can regulate and learn from it by direct action as it did with Mr. Savage.
A monopoly deals with these things in a way that appears more unfair than if the marketplace simply drove Mr. Savage out of the business.
edited for factual, historical clarity
[edited by: OnlyToday at 1:53 pm (utc) on Sep. 16, 2008]
Google does track visitors (or can track them easily enough). If they find "many" (to be determined how many is too many, but there might easily be a number of zones) of those visitors come form an adwords source and head off soon (again how soon TBD) to an adsense destination, it would be easy to spot the difference in price paid for the traffic and price received for giving it back. If that difference is consistently in favor of the site in question, then why would it not be an arbitrage site ?
I doubt many publishers not involved in arbitrage themselves "like" arbitrage being done to their visitors (by ads on their site or on other sites/search) as it devaluates adsense ads, if not robs us from the advertising possibilities.
As to not kicking them out of adsense and just making it impossible to continue the game by raising the bar in adwords: as long as their ads don't appear I'm fine, so I think it might be the best solution: they do not spend more money, (the max value stops it); any organic traffic they might have still bring them in some money. Cutting them of on the adsense side creates an even bigger dead-end on the Internet as it already was and doesn't remove their crappy ads from our sites.
Not removing their adwords account: I'd try to zap it in all likelihood, but I'm not running Google.
As to it being gray: of course it is, few things in the real world are binary.
As to it being selective: they have to start somewhere, so they might as well start with the big fish.
Google most likely has a pseudo monopoly on online ads (adsense, adwords), but they have very little to no lock-in [e.g. I can today decide to stop adsense and execute it without google having anything to stop me from doing so (it might hurt but given a new competitor offerign better and brighter, I could switch in a heartbeat]. Few other monopolies would not try to seek and expand the lock-in they have. That lack of lock-in is important.
The quoted text show the reporter is biased IMHO. First of all MSFT still has their de-facto monopoly and still abuses it beyond what is tolerated. [It got the record fines to show for it]. I've yet to see google getting in trouble over anti-competitive actions with the EU. In fact I seem to recall them trying to help their rival yahoo from being eaten alive by MSFT.
|...given a new competitor offerign better and brighter, [than AdSense/AdWords] |
That's the deal-killing qualification, no such competitor exists. We're still in some non-existent hypothetical world in order to explain away Google's monopoly.
>>>no such competitor exists...
Here's what Wikipedia says:
|...Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. |
Isn't that where Google and AdWords stands today? There is a lack of competition for their particular service (bidding on keywords) and a lack of a viable substitute.
I understand that the criteria the DOJ is going to use for the word monopoly will probably be finer than what Wikipedia offers as a definition. And I'm not saying Google is a monopolist. But you know, it's kind of scary to read the Wikipedia entry for Monopoly [en.wikipedia.org] and see how much of what they posted applies to Google.
If the DOJ does find that Google has a monopoly, what would that mean? Would Google have to be regulated? The last thing we need is the government digging around the AdWords system.
If Google is a monopoly then you're completely discounting all of the other ad networks and online media as being irrelevant when some of them appear to be thriving and Microsoft is supposedly building competition which we hope doesn't flop like YPN.
As a matter of fact, I remember when I first used Goto.com, that became Overture, that then became part of Yahoo, which was a pretty dominant force in it's day and then it flopped.
Is Google to blame for that?
Yahoo had their 2nd chance with YPN and everyone disillusioned with AdSense/AdWords was excited and ready to jump on the YPN bandwagon. Unfortunately, YPN was simply a failed effort from a technological standpoint, not as relevant, and people walked away in dismay.
Is Google to blame for that too?
It's hard not to be a "monopoly" when all the other so-called "best of breed" keep failing over and over.
It's still market forces that drive the process because the publishers and advertisers both need to make money and YPN technical deficiencies caused Google to gain even more ground.
Maybe instead of worrying about anti-trust someone should just find the right programming team to fix YPN, innovation over litigation.
Heck, maybe Microsoft's new AdCenter will take a chunk out of Google, we know how badly Microsoft needs to dominate yet another market and then people will be looking around going, um, where'd Google go?
|...then you're completely discounting all of the other ad networks and online media as being irrelevant... |
Yeah, pretty much. Those that I've tried have failed miserably and if any were to truly compete well word of them would spread like wildfire.
|Heck, maybe Microsoft's new AdCenter will take a chunk out of Google... |
There is always that hope, but unlike Google Microsoft has in the past actively sought to crush competion not by competing but by making predatory end runs and unabashedly doing things it knew would have to be fought in court (like copying the Macintosh OS).
Google OTOH gained its monopoly status by developing a superior product and cleverly grabbing mindshare with innovative marketing.
Now that it has attained its monopoly it sometimes abuses this status absent-mindedly they way a bear in its cave crushes little creatures when it rolls over in its sleep.
I personally doubt that any competitor will rise and DOJ action moves much too slowly to be of any good to anyone but the lawyers working on the case. The commercial/industrial world moves a million times faster than it did in Teddy Roosevelt's day while the speed of litigation has advanced very little.
|like copying the Macintosh OS |
That's a fallacy, as the "OS" portion of Windows existed long before the MAC and was copied from Digital Research's CP/M. Now the GUI portion, which I believe you refer to as the MAC OS was copied the Xerox Star so if Microsoft stole from anyone it was Xerox.
|I personally doubt that any competitor will rise |
With this much ad revenue at stake, I think someone will rise, and better yet, it will be a disruptive technology that will possibly take Google by surprise as they ride into the sunset milking AdWords/AdSense for all it's worth.
Don't forget, when I started in computers we assumed IBM would dominate and that continued with the first IBM-PC as IBM thought computers were the power, not the software, and Microsoft and PC-Clones blind-sided them and POOF! the household word of IBM became second to Microsoft.
A few years back the newspapers, magazines, radio and TV thought they all had a lock on their advertising and along comes this thing called the internet and Google and POOF! their profits went into the toilet, subscriptions plunged, advertisers flocked to this new medium.
So the same thing can happen to Google, we just don't know what it is at the moment, but it will happen.
>>>Google OTOH gained its monopoly status by developing a superior product...
Reading this thread, I have to keep reminding myself that the issue is the quality of the landing page, which is an impartial process because it's algorithmic - and automated.
It isn't about Google, any more than it's about any other media company's right to set editorial guidelines and advertising rates.
It isn't about whether or not there's any so-called monopoly.
It's about advertising rates as they relate to landing page quality as one of the determining factors.
It's about the quality of the landing pages on the site whose owner is whining because their business model isn't working any more because their cost of operating went up.
That's how a free economy works: it's a supply and demand issue.
|I understand that the criteria the DOJ is going to use for the word monopoly will probably be finer than what Wikipedia offers as a definition. |
Monopolies aren't illegal. Antitrust comes into play only when a monopoly abuses its monopoly power.
Thanks, Marcia, for trying to get the thread back on track.
Wasn't Overture pricing based on bid amount and who placed the bid first?
Sourcetool isn't competing against MS AdCenter or Yahoo/OV, they're competing against other advertisers for the top spots. There's no Adwords advertiser who has a monopoly on the top spots.
Simple Economics 101, supply & demand:
When the demand for top spots exceeds the supply of top spots, the algorithm is placing the best choice for the query in the top spots, that will provide the best quality traffic for the "original" bonafide advertiser and the best experience for the end user.
The fact that landing page quality is one of the deciding factors in pricing makes it less monopolistic, because no one advertiser with deep pockets can monopolize the top spot because of faster, higher bidding. Contrary to all the quite evident link-baiting accusations of "monopoly," it's actually making the process more competitive and democratic.
It's a beautiful thing, how free enterprise works. And to be perfectly honest, the more I read about this, the more respect I have for Jason Calacanis.
[edited by: Marcia at 1:57 am (utc) on Sep. 17, 2008]
No Marcia, according to the title of this thread it's about a DOJ antitrust Investigation and "AntiCompetitive Behavior or Out Side the AS/G Lines?"
The quality of the landing page is a key point, but if that's what the thread were about wouldn't the title reflect that?
martinibuster began the thread, and his comments seem to be about monopoly. But certainly the quality of the landing page would be a valid topic within this thread and worthy of discussion.
|the more respect I have for Jason Calacanis. |
This thread has officially jumped the shark.
|martinibuster began the thread, and his comments seem to be about monopoly. |
Sorry OnlyToday, but I beg to differ and I'm afraid we'll have to agree to disagree. The very first post is indicative of what a thread is about, and martinibuster's only comment in the post starting this thread, aside from [woof!] was this:
|New York Times profile of a businessman who got on the wrong side of the Google quality guidelines entitled Stuck in Google’s Doghouse |
The owners of the site in question in this thread drank deeply and delightedly on the tantilizingly delicious taste of long tail page-stuffing and reveled in their $115K a month profit, binging on cash while throwing all caution to the wind. What they neglected to do was to drink any Google Kool-aid.
Calacanis, on the other hand, apparently drank enough of the Google Kool-aid to know enough to part with a few pesos and actually create some CONTENT.
Those guys could have taken a bit of their $115K a month and hired on a consultant (even a $50 an hour newbie could have steered them on course) and staff or contract writers; instead, they were penny wise and ended up being pound foolish for the long term.
So they got bitten in the backside by greed, and now they're yelling ouch.
[edited by: Marcia at 4:41 am (utc) on Sep. 17, 2008]
|Those guys could have taken a bit of their $115K a month and hired on a consultant (even a $50 an hour newbie could have steered them on course) and staff or contract writers; |
I guess you miss the part of being a self-service add your own business B2B directory for those new UN codes.
Funny, that's how Yahoo Directory and DMOZ started, you submit your own site.
Is the internet too big and jaded for a new site like that?
Apparently Google thinks so and won't let him advertise it.
Personally, I think they should've pulled his ADSENSE account and left his Adwords alone.
[edited by: incrediBILL at 5:15 am (utc) on Sep. 17, 2008]
|The very first post is indicative of what a thread is about... |
Yes, but the title and sub-title of the thread and the entire NYT article linked cannot be ignored either. Perhaps the landing page quality is the only thing in the article that interests you, but trying to narrow the discussion when the title and the link clearly indicate that the thread is about a lot of other things as well is a bit self-centered.
|...they should've pulled his ADSENSE account and left his Adwords alone. |
Google wants to write its own rules as it goes along without regard to consistency or fairness. So do I, I just get away with it less often.
Sometimes you can make a lot of easy money with Google, just be forwarned--they are using you to a greater degree than you are using them so don't expect fairness or consistency. Landing page quality and policies about arbitrage are less important than Google's whim and caprice. And they have no conscience about suddenly destroying lives and businesses without warning, I've seen it happen several times.
[edited by: OnlyToday at 5:28 am (utc) on Sep. 17, 2008]
|Funny, that's how Yahoo Directory and DMOZ started, you submit your own site. |
Yahoo started out free and DMOZ still is, but those folks were contacting companies and charging $199 a year for a listing (not a link, the links are bot excluded), which would be be waived in exchange for a tiny little homepage backlink.
|Is the internet too big and jaded for a new site like that? |
'Fraid so, there's been a lot of water that's passed under the bridge and the waters are almost too murky to swim in without wearing a life jacket.
Life jacket == alternate income source. People in the Adsense forum, when they're disenfranchised by Adsense, are told all the time to diversify their revenue sources, not to depend on only one source of income.
|no conscience about suddenly destroying lives and businesses without warning |
They have guidelines publicly posted, so it's not completely hidden. Besides, in what way is Google responsible for anyone's business plan?
|They have guidelines publicly posted, so it's not completely hidden. |
OK, I'll re-iterate for the bazillionth time in this thread that those guidelines aren't clear and leave murky gray areas for Google's interpretation so one arbitrage site gets the boot while the other one lives, it's not fair whatsoever. You either say NO or YES to AdWords that have AdSense on the landing pages, none of this random game show spinner junk that if it lands on MFA one gets the boot while the rest get to play.
Fair is fair, this is foul.
I still don't think it's an arbitrage issue. Even without the AdSense, this site, constructed as it was when I saw it, would be difficult to near impossible to work with AdWords.
|They have guidelines publicly posted, so it's not completely hidden. |
The guidelines are not the server space worth they occupy for hosting. As long as these guidelines can be interpreted by Google any way they want, they are useless.
You see, I remember a time when Google sent out printed (!) guidelines and tips for Adsense publishers. One of the recommendations was to blend the ads to increase click-through. Apparently, they have changed their minds on that one. Another recommendation (IIRC) was to buy Google ads to drive traffic. Oooops, also not welcome any longer.
Google is a monopoly is a monopoly is a monopoly (and they behave very much like one).
They are not. Suddenly destroying lives and businesses without notice is the way of the jungle and it does not bother me that Google has the blood of many innocents dripping from its lips. The fact that they are oblivious to the stench of death on their breaths does say something about them. They WON!
|...in what way is Google responsible for anyone's business plan? |
I too believe in the free market, and take great joy in the problems of the arbitrageurs like Mr. Savage. The more bodies lying by the side of the road, the easier it is for me to climb to the mountaintop. Schadenfreude!
3 years ago our google rep designed and approved our ads.
2 years ago we were notified that our ads were being displayed in a wrong manner due to blending.
2 years ago our google rep re-designed, re-approved our ads.
1 year ago we were notified that our ads were being displayed in a wrong manner due to blending.
1 year ago our google rep re-approved our ads in a new format.
So google designed our ads, then found themselves violating themself. They redesigned our ads and then found themselves violating themself.
Currently waiting for the next email....
I have been doing AdSense for over 4 years (May 2004) and I have never blended my ads. I want the people that click the ads to be totally aware that they are clicking an ad. I want them to be in the frame of mind to want to look at the ad landing page. I want them to convert. I don't want them to be tricked and I don't want them to be fooled by the ad they clicked on when on my web site, that way I get high paying ads from advertisers.
Kind of good approach, but have you heard of "banner blindness"? If you just for example make a border around the area with your ads that are otherwise blended, people tend to overlook it. Just something to consider. I am not saying blending is the way to go, but just something to have in mind.
[edited by: engine at 4:49 pm (utc) on Oct. 1, 2008]
[edit reason] No urls [/edit]
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