|Yahoo Says Google Ad Deal Complies With The Law|
Yahoo Says Google Ad Deal [news.bbc.co.uk]Complies With The Law
|Yahoo said it will implement its much-criticised search ad deal with Google despite possible anti-trust hurdles. |
Under the agreement, from October Google will sell ads alongside Yahoo search results on some of its pages.
Rumours the US justice department would challenge the deal grew this week when it hired a veteran anti-trust lawyer.
Hilary Schneider, executive vice-president of Yahoo US, told the BBC the agreement was "fully within the guidelines of the law".
U.S. D.O.J. Hires Antitrust Lawyer In Google-Yahoo Partnership [webmasterworld.com]
Google, Yahoo Disclose Some Terms of Their Ad Pact [webmasterworld.com]
Well, they'd say that - if they said otherwise Young and the rest of the board that supported him would certainly have to go since this deal was central to their claim of providing better shareholder value than selling out to Microsoft.
Ironically Microsoft would certainly not be suprised hearing this since they themselves made similiarly ridiculous claims (court ruled they did have a monopoly) in the past.
If Google gets a grip on Yahoo's searches then they would effectively have 90% of search market under control, I'd say they already own almost as much since (in my view) people who use their search engine are probably more valuable in terms of PPC.
This is serious issue for advertisers and resellers, since not having the alternative vendor risks many business's livelihood. I have dealt with a few cases Google Adwords customers were shut out from Google advertising because of Google's rules and guideline.
In these cases, advertisers were not given a chance to defend their case in time and their livelihood were in risk because of it. In this case, Yahoo was the only other alternative to keep their business going. If Yahoo does not become an effective alternative, many advertisers are at the hand of Google's mercy.
|(in my view) people who use their search engine are probably more valuable in terms of PPC. |
That's interesting. What makes Google users more valuable than people making the exact same queries in Yahoo?
As far as whether it complies with the law, they likely have competent counsel and it's probably one of those "let the judge decide" situations.
|What makes Google users more valuable than people making the exact same queries in Yahoo? |
Money they have to spent apparently - I've seen some research which suggested that basically Google's audience is more affluent, so they can buy more stuff and this would in turn generate more money to the search engine. Maybe it's not by much, but given that Google controls 70% of searches in US any bigger weight to value of those searches means their share is even higher - for me personally Google is the best search engine so far, no shame in saying that, but they are acting more and more from position of strength - Microsoft also had the best OS in 90s, but this dominance was abused - this always happens with any monopoly, no matter how much they proclaim "do no evil": the existance of the monopoly is evil in itself.
|I've seen some research which suggested that basically Google's audience is more affluent... |
If practically everyone is using Google, then doesn't the definition of practically everyone include the wealthy and the poor?
In other words, if almost everyone and their grandmother is using Google, can anyone really say there is a Google demographic if their user base pretty much encompasses everyone, rich and poor?
|If practically everyone is using Google, then doesn't the definition of practically everyone include the wealthy and the poor? |
Good question. I think less affluent might search less (maybe they don't have computer at all), I don't think though we are talking about the wealthy and the rich here - middle class plays the key role.
But let's assume here Google's customers are the same as Yahoo's in terms of PPC value, in this case Google will hold 70% market share - this is a very high share, certainly very close to monopoly - I'd say even anything above 40% is pretty influential but 70% is huge - I can't think of any real world business that would avoid regulation in this case - the only nearest example I can think of is Microsoft of the 90s, oddly enough both of those cases are in IT industry.
|think less affluent might search less (maybe they don't have computer at all) |
That comes off sounding quite arrogant like they can't afford a phone or a TV either.
I know many people that don't have means because of age or disability, but somehow manage to afford to keep a computer online with limited incomes living on social security or some form of welfare. Guess what, they tell me about stuff they search for all the time.
You assume searching is always about spending when often it's just looking up information which people of any income level may do daily.
Perhaps sticking to the topic of whether Yahoo and Google are within the law or not would best suit this thread.
[edited by: incrediBILL at 2:43 am (utc) on Sep. 13, 2008]
Lord Majestic... very right on. The previous similar intrusions occurred in the communications industry. Newspapers first, Radio/TV second, then Telcos. To a minor extent the entertainment sector has been targeted regarding monopoly etc. Just an observation that when lots of money is being made somebody wants to regulate it. :)
I donít recall Microsoftís dominance at anything as ever affecting my bottom line. That includes their operating system, programs, or browser. Google on the other hand seems to want their hands in every small businesses profits they can. The only way you can really bypass that in general is to flood Google with thousands of worthless pages (and we all know where that comes from) or move around in less competitive areas. Yearís back you could draw profits from fifty search engines but now itís down to three if you want to call it three. I canít believe anybody with a lick of sense wants to see any further gains by Google. These Google fellows are ravenous. Just reading about all the filters and penalties Google implements shows Google can almost instantly put an end to anybodyís business permanently and the only way youíre going to get it back is through Adwords.
|The previous similar intrusions occurred in the communications industry. Newspapers first, Radio/TV second, then Telcos... when lots of money is being made somebody wants to regulate it. |
True, you're correct. And they've all subsequently been deregulated in the US. The trend over the last couple decades in the United States is toward deregulation across a broad range of industries, telcos, airlines, energy, media, etc. I don't see this going in the opposite direction for Internet Advertising.
Google has reach, so advertisers chosen it. They are free to choose other service, if it is as much as good.
Best business should make business; Google is good quality service, that's why other search engines were destroyed. I'd seen AOL's advertising.com, some time before, and it looks funny.
Obviously monopoly is evil, even in smallest business, as we see in our daily life examples, but I've question that why can't it be controlled; if publishers, advertisers are unhappy for something, their complaints should be acknowledged and whatever Google or anything, should be punished rightly.
Customer service is important and Google should be a good host for them; if it is not, then it need be taught by whatever regulators there are. Even smallest complaint by customer should be taken seriously, by someone who's hearing, if Google isn't.
If a business is best, it will be monopoly. 100s of worse service providers are of no use.
|That comes off sounding quite arrogant like they can't afford a phone or a TV either. |
I am sure they can afford phone and TV (though some can't but in this case they probably won't be buying computer with internet) - this has nothing to do with arrogance, just fact of live - different consumer segments spent different amounts of money on very different things, they would also (I am sure of it) have different patterns of search - their job and live interests are likely to affect that, not just purchases.
On topic - I am positive Yahoo and Google are breaking anti-trust laws, in fact my view is that Google breaks it already by having such high share of the market - any company that controls over 35-40% should be subject to very careful scrutiny and anything over 50% should be deemed a monopoly. Google has got 70% and with Yahoo they might get to 90%, if that's not monopoly what is?
|I donít recall Microsoftís dominance at anything as ever affecting my bottom line. |
It was affecting it but in a less transparent way - due to Microsoft's dominance there were no alternatives so Microsoft was able to keep price of their OS at about the same level while price of computer hardware was dropping very quickly - if you compare %-tage of computer price taken by Microsoft OS price 10 years ago and now you will see that this percentage has increased very considerably - they are often the most expensive component of a (fairly cheap) computer. Lack of competition is the reason why they got away with it. Same with Google now - cost of AdWords is growing because there are no reliable alternatives.
|If a business is best, it will be monopoly. 100s of worse service providers are of no use. |
You right, they are the best and it may seem that they earned their position. The problem is that they wield way too much power - if Microsoft stops selling OEM Windows licenses to some manufacturer that will kill their PC sales because it is a must have. If Google kicks people from AdWords or AdSense it can kill their business. Can anyone honestly say that Google is very thoughtful, careing, approachable, accessible when it comes to termination of user accounts or just kicking them from index for unknown reasons? The fact that they don't have phone contacts for many (most?) things is a sign of monopolistic abuse - they can do things that can kill your business and you have no recourse to even honest hearing. If they were not a monopoly (even without Yahoo) they'd never act like this.
I like Google because they still have the best search engine, but I also think Microsoft did have best desktop OS (not counting Vista here) - the fact that they still do very good product is not an excuse for monopolistic actions because we could have had same product cheaper or maybe better if they had good competitors.
My prediction - this deal will be stopped and both Young from Yahoo and Google know it, they are just playing for time.
|You assume searching is always about spending |
It's not always Bill and I don't assume that at all - it's just people who have more disposable income to spend are certainly a better audience for advertisers.
|it's just people who have more disposable income to spend are certainly a better audience for advertisers. |
That's not what you said, let me refresh your memory:
|I think less affluent might search less (maybe they don't have computer at all) |
Searching and disposable income aren't mutually inclusive.
The poor people may be spending even more time searching to find bargains that let their income go further, such as on craigslist, ebay, sales on amazon, etc.
As a matter of fact, there are a ton of sites set up that cater to the coupon hounds and frugal shoppers.
Still, what has any of this got to do with the topic of "Yahoo Says Google Ad Deal Complies With The Law"?
I don't think Google selling ads in combination with Yahoo is overstepping until Yahoo completely replaces their ad platform with Google, that's when the anti-trust action should get involved.
|That's not what you said, let me refresh your memory: |
Let me just point out to you two words that I put in bold:
|I think less affluent might search less (maybe they don't have computer at all) |
Do you see that I am not making a statement of fact but merely express a cautious opinion that may or may not be correct? If you have got any evidence to the contrary then feel free to share it, but no need to accuse me of arrogance or anything like that.
|The poor people may be spending even more time searching to find bargains that let their income go further, such as on craigslist, ebay, sales on amazon, etc. |
It's very possible, likely even - notice how there is no Google in your list.
|I don't think Google selling ads in combination with Yahoo is overstepping until Yahoo completely replaces their ad platform with Google, that's when the anti-trust action should get involved. |
I think anti-trust action should have been activated automatically after Google (or any other search engine) exceeded 50% of the market share (Google has got 70%+, let's assume all users are equally valuable here).
For example Yell (UK) - very close example as it involves advertising business - have got very large market share and they do have price controls imposed on them. They can't just change their prices and especially forbid (via higher price or otherwise) competitive businesses being advertised? FYI - market share by Yell was 75% in 2006, that was more than enough for price controls. In the UK share of Google is around 90% - I don't know whether price controls would have been appropriate in this case, but certainly any serious action by them should be subject to analysis on how it will affect competitors. For example Google is leveraging its dominant search market position to dominate other segments such as (for example) Maps - this is exactly the same behavior as Microsoft had in the 90s - only they were leveraging their dominance in OS/Office markets.
|It's very possible, likely even - notice how there is no Google in your list. |
I gave examples of sites they might use, plus using Google to find discounts and coupon sites was implied so please don't even try that tactic.
|I think anti-trust action should have been activated automatically after Google (or any other search engine) exceeded 50% of the market |
That's the same tripe trotted out against Microsoft and they didn't even sell hardware, they sold software and were being crucified as controlling the PC market.
What about all those Apple customers or Linux users?
In a free market it's all about CHOICE and Yahoo, Live and Ask all have competing products yet customers still CHOOSE GOOGLE.
If Yahoo, Live and Ask didn't exist and Google was the only option, I would say there was a case to be made.
Lots of examples where clearly dominant companies exist such as McDonald's dominates burgers, Coke dominates soda, Walmart dominates shopping, so on and so forth but like Google, they all have clear competitors in their field.
Consumers make the choice, you can't dominate without a superior product at a perfect price point.
You don't need legislation to break Google, you need innovation, the next best thing will knock them down a notch.
OK, where are all the innovators with the next best thing?
|so please don't even try that tactic. |
I am not trying any tactics here - I am just trying to express my opinion and you are entitled not to agree with it.
|In a free market it's all about CHOICE and Yahoo, Live and Ask all have competing products yet customers still CHOOSE GOOGLE. |
And 90% of people "choose" Windows - I am one of those users I think it is the best OS as Linux/Apple too complicated or not compatible enough. Same thing with Google. So they do have best product however this does not mean they are allowed to abuse their monopolistic position just like Microsoft did the he 90s.
Google has got 90%+ share in the UK, it is just a matter of time before they will get regulated here just like Yell. Right now they are slowly killing Yahoo and MSN is not doing too well, give it 2-3 years and Google will be subject to anti-trust legislation in the USA. This Yahoo deal could be the same trigger like Netscape vs Microsoft case back some years. And IE4 was better browser than NN4 - especially IE5, but it did not save Microsoft from court action because even though they had better product they also abused their monopolistic position in order to promote it. Same thing as Google does now with multiple other products like Google Maps.
|OK, where are all the innovators with the next best thing? |
Too busy doing something simpler - like social networking sites or whatever it is flavour of the month now :)
[edited by: Lord_Majestic at 12:41 am (utc) on Sep. 14, 2008]
|I am not trying any tactics here - I am just trying to express my opinion and you are entitled not to agree with it. |
Twisting what I said "no Google in your list" is a tactic, not an opinion.
|Right now they are slowly killing Yahoo |
No, Yahoo is busy killing themselves with stupid strategies and bad planning which have nothing to do with Google.
MSN/Live is doing what Microsoft always does, slowly plodding along nipping and chipping away at a market they don't currently dominate. Give them time, just like the killed Lotus 123, Word Perfect, and a host of other products, they have the money to spare and time is on their side.
|Netscape vs Microsoft case back some years |
Yeah yeah, where was everyone when MS killed the email market?
Software coming out of my team was sitting on the desk of many major corporations, the US Congress, NSA, even the President of the USA! Microsoft tried to buy us, we went to Lotus, so they bought our competitor and started giving away the same product we were selling for over $150M/year.
You can't compete with free.
Nobody cared so why should I care now?
Many of my team mates went to work at Netscape when Microsoft destroyed Netscape too, ask me if I care and I don't because most of them left Netscape as multi-millionaires.
Let Google eat them all for lunch.
The smart ones will come back ready for a fight and make out like bandits.
The no so smart ones will fade to black like nature intended.
|Twisting what I said "no Google in your list" is a tactic, not an opinion. |
It's not a tactic but an observation. I don't use any tactics here - just expressing my views.
|You can't compete with free. |
Indeed, this really should be considered as "dumping" (price policy). Why do you think Google gives away free site search and other stuff? This is done not so much to get 0.001% higher share than they already got, but more to kill revenues opportunities for wanna be search engines.
|Let Google eat them all for lunch. |
And then what? I read all the time on this board about devastating effects on sites when Google changes algorithms or whatever happens and sites lose lots of traffic, this alone should make any reasonable person support competition and resist the monopoly no matter how attractive it may be at the time.
>>>just expressing my views.
And incredibill and myself are refuting those views. They have no basis in fact. Your positions that Google users are more affluent and that less affluent people don't search is, no offense but there's no other way to describe it, those views are nonsensical.
Why do I care? Because our corrections of your opinions helps you become more knowledgeable. It helps others because they are not misled by bogus information. It increases the value of the WebmasterWorld forum to be able to discuss different opinions and on occasion set aside the more spurious assertions.
What I'm curious about is how much more refutation you need before you finally admit you were mistaken. It's not a big deal to admit a mistake. I've been wrong on the board myself and have thanked people for pointing it out to me.
So what are you waiting for?
|And incredibill and myself are refuting those views. |
You did not refute anything - you and Bill merely expressed your views that happen to contradict mine, which actually happened to be based on research that I've seen - I actually said that at the start of the thread.
Here is quote from the research entitled: "Poor People Use Yahoo, Richies Use Google":
"According to Hitwise data and this Lifestyle Quadrant Analysis, while lots of people are using Yahoo search (those are the dots in the upper left), groups that have spent more that $500 or more online tend to use Google (those are the dots in the lower right, the bigger dots designate $500+ spenders). So while Yahoo has the "struggling societies" market cornered, Google is fairly pleased with their "affluent suburbia" and "upscale America" user base".
So I was not being "arrogant" as Bill suggested - maybe Hitwise is but I am just quoting their research: don't dismiss them easily, they are owned now by Experian who are big time credit checkers, they have got very detailed credit records of purchases and their bread and butter business is knowing who is affluent and who isn't.
So, my view was based on this (and I think I've seem some other) research - if you can refute it then fine - I will gladly look at references to other research doing just that.
|It's not a big deal to admit a mistake. |
Then it would be very easy for you to make next post :)
Thanks for that information. I can see what formed the basis of your opinion, you're not just pulling it out of a hat. ;)
However the blog post on Gizmodo [gizmodo.com] from which you formed your opinion is a dumbed down 166-word distillation of a post originating from TechCrunch [techcrunch.com] that spun the original information from a Hitwise blog. Here's a quote from the 166-word Gizmodo blog post you referenced, it reads like something out of TMZ.com.
|...without giving too much away, you might not want to tell your friends that you still use Yahoo (or that your Armani suit is a knock off)... So while Yahoo has the "struggling societies" market cornered, Google is fairly pleased with their "affluent suburbia" and "upscale America" user base. |
That's a gross oversimplification of the original Hitwise blog post. I wouldn't advocate forming an opinion of Google or Yahoo from that fluff piece by Gizmodo.
Here's a link to a blog post by Hitwise [weblogs.hitwise.com] that they say indicates Yahoo Search users tend to skew younger than Google users, and that a large percentage of Google users tend to be over 55. Hitwise then took this demographic information and used offline [appliedgeographic.com] (Experian Mosaic USA) data to infer that the older users are demographically more "likely" to spend more than the younger users at Yahoo.
Here is a quote from that blog post, referring to the pie chart:
|The bigger the bubble the higher the propensity to have spent $500 online (based on offline data collected by Experian). |
And here is where Hitwise makes the inference based on the offline demographic data:
|...indicates that Google users are more likely to be big online spenders. |
What's interesting though is that the percentage of older users is virtually the same.
|they have got very detailed credit records of purchases |
Again you're equating searching and purchases.
Sorry, this is where I get off the merry-go-round as I'm getting queasy going in circles.
|Thanks for that information. I can see what formed the basis of your opinion, you're not just pulling it out of a hat. |
No, I wasn't pulling anything, I said it pretty clearly (I thought so at the time):
|I've seen some research which suggested that basically Google's audience is more affluent |
Maybe I should have bothered to find this research the second you doubted my words - I just assumed you'd run a quick search for the keywords that were present, namely "Google Yahoo affluent".
You are now argueing about finer points of this research - I hope at least you are now satisfied that I was not mistaken when I voiced my view based on this research (I clearly said it was that even though I did not quote it at first - TOS of this site are pretty funny when it comes to backing yourself up with references which I usually do).
|And here is where Hitwise makes the inference based on the offline demographic data: |
Experian is very good when it comes to these things. Have you ever heard of them before today? I've actually worked for the company that owned both them and ours. This BBS posts some articles on the basis of polls made on biased websites (like recent one about supposed %-tage of people who buy from spam emails), compared to that stuff quality of research by Experian is light years ahead - they were doing this stuff for longer than the Web (as we know it) existed - since 1980.
|What's interesting though is that the percentage of older users is virtually the same. |
8.6% higher on Google in the example you gave. It's not so small.
45-54 is a lucrative group of people with disposable incomes (they paid off houses etc): 11.7% more on Google.
15-24 group (not that much money) - Google has got 7.4% less such users - effectively Yahoo is being dragged down by those while Google is dragged up by older group that happens to have more money. 7% down in one case and 10% up in other creates a fair bit of difference.
|Again you're equating searching and purchases. |
I am not equating anything - I am just saying that Experian knows very well credit card transactions which form the backbone of ecommerce. Therefore they are very informed about who is affluent and who isn't when it comes to online ecommerce, which was the whole point of what I said (this isn't some bogus online poll on Visa site or something like this) - this is based on external research which I quoted (you didn't provide any evidence to the contrary instread preferring to label me as "arrogant"). Frankly incrediBILL I think now that I quoted the research that backed my words you should take your words back and maybe even apologise.
I want to finish this now, so this is likely going to be my last post on this subject.
I mentioned affluence from this research initially to suggest that Googe's share of searches is more valuable (per %) than that of Yahoo. If Google's US market share is 70% and their users are just 10% more affluent then ... calculation of actual money share that Google takes is left for anyone willing to calculate it.
Factor into this better targeting (leading to higher bids) and Google probably owns ~85% of the PPC ad market by value. Is that not a monopoly? What would happen if Google gets their hands on Yahoo's smaller but still sizeable share of searches? They'd have control over 90%+ searches, if that's not monopoly I don't know what is. And that is the most important point.
Good discussion. I urge anyone interested in this to read this column from the New York Times. (It also holds some interesting economics for any webmaster active with both AdWords and Adsense.
We have a lively discussion ongoing about the doghouse here: