Editor’s note: The following is a guest post by Eric Clemons, Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania. The views he expresses are his own, and we present them here to foster debate.
The mainstream press, such as The New York Times, has noticed that even Google itself is starting to worry about the possibility that the Department of Justice may seek regulation, possibly even the break-up of Google. How can this be? How can a firm seen as a triumph of creative capitalism and a virtuous contributor to the economy (“Don’t be evil!”) possibly be suspected of anything? Is this regulatory oversight gone mad? Not exactly.
Below I summarize what I do know about Google’s behavior and what I believe the Department of Justice is likely to perceive and likely to need to demonstrate if it seeks to act against Google. In a later post I will expand, including what I believe but cannot yet demonstrate. It’s important to remember that I am not an attorney, just a computer science faculty member at a major business school, with some litigation experience, and that I have had no conversations with Google or with the Department of Justice about these issues, but I believe that what follows provides some insight into thinking at the Department of Justice.
- Even with the appearance of competition from other search engines such as Yahoo and Microsoft in the market for sponsored search, Google enjoys monopoly power over corporations that participate in its keyword auctions. This monopoly power is especially great when Google deals with corporations whose operations are largely fixed cost, such as hotels and airlines.
- Google is abusing its monopoly position by overcharging corporations for access to consumers. These charges are passed along to consumers and ultimately result in consumer harm.
- Google is likewise abusing its monopoly position, deterring market entry in areas that would benefit consumers and damaging potential entrants.
Any one of these would justify regulatory intervention. The second and possibly the third would also justify some form of financial compensation to those who could demonstrate that they had been damaged by Google.
Monopoly power in electronic distribution channels is often difficult to assess since the relationship between market share and market power may be deceptive, even counter-intuitive. Two historical examples that were subjects of my earlier research provide the best way to begin the analysis, because their economic implications are now very clear.
In the mid 1980s American Airlines’ Sabre and United Airlines’ Apollo computerized reservations systems (CRSs) dominated the market for travel agency reservations systems, with 43% and 27% market share respectively. Other systems existed, and other airlines appeared to be free to enter with their own CRS offerings, but agencies were satisfied with the systems they were using, the largest agencies were actually given their systems free or even paid for their usage, and the position of these two CRS vendors appeared stable. At the time 80% of air travel bookings were made through travel agencies. Thus, while neither Sabre nor Apollo accounted for a majority of any airline’s bookings, even the smaller of the two controlled access to approximately 20% of each and every airline’s potential customers and therefore approximately 20% of every airline’s sales. Airlines initially chose to participate early, when participation in the CRSs was free. Only later, when agencies had come to depend upon CRSs, and thus when airlines had become dependent upon CRSs as well, did Sabre and Apollo institute high fees for reservations, ticketing, and other services they provided to the airlines.
Can we demonstrate that these CRSs had market power at the time? The historical record makes this quite clear. When Apollo dropped Frontier from its reservations systems, Frontier was forced to file for bankruptcy protection under Chapter 11; it reemerged, regained listings in Apollo, and continues to fly. When Sabre, which was larger than Apollo, dropped Braniff, Braniff ended up in liquidation and no longer operates. Clearly market power was present and clearly this power became evident to all airlines even if it was not perceived by passengers or even by agencies. Ultimately, both American and United were earning more from booking flights on other airlines than from their own operations, and at one point American was earning more from booking passengers on Delta’s flights than Delta was earning by operating them.
Neither Sabre nor Apollo had a monopoly of the market for reservations services, but together each had a parallel monopoly on the share of the market that they served through their agency customers. This should be clear from the figure below.
At approximately the same time Philadelphia National Bank (PNB) acquired Cash Stream, signed Provident as a customer bank, and consolidated the position of MAC as the sole ATM service provider for the Philadelphia region. Interestingly, even with 100% of the market for inter-bank ATM switching services, PNB lacked monopoly power, was unable to charge excessive fees to its member banks, and never represented a competitive threat to the other banks in Philadelphia. How can we possibly explain this? Again, a picture is very helpful.
From these pictures we can plainly see that the geometry of the two networks — CRS services and ATM services — is quite different. The CRSs are positioned between the airlines and their passengers. If one CRS drops an airline then all agencies that use the CRS and all of that agency’s customers are denied access to one (and only one) airline. The agency may not care, and the customers may not even know. Moreover, bypass of the CRS at the time, before the presence of search engines and online booking, meant that the lost business was likely to be impossible to recapture as long as participation in the CRS was denied. Despite the high fees, no airline voluntarily removed itself from any CRS.
In contrast, each bank is positioned between its customers and the ATM network service provider MAC. If a bank is denied access to the network, at least its own cards will work on its own machines. Moreover, each bank used an identical interface in its communications with MAC. Therefore the banks were able to forge an alliance — if PNB attempted to compete unfairly against any one of them, they would simply implement bilateral switching among themselves and cut MAC out entirely.
Again, even with 100% market share, there were no complaints of abuse lodged against MAC. In contrast, there were significant complaints lodged against the operators of the CRSs and, ultimately, regulation from the Department of Justice severely limited the power of the CRS operators.
What can we learn from the geometry of the current network for search?
Clearly, Google’s market share for sponsored search and for search generally is larger than Sabre or Apollo ever enjoyed, and clearly Google comes between the shopper and the ultimate service provider (hotel, airline, retailer, or manufacturer), just as we saw in the case of the airline CRSs. The conditions are right for Google to enjoy enormous market power over service providers, who feel they must bid for positions in Google’s sponsored search keyword auctions.
Offsetting the fact that Google’s market share advantage in search is greater than that of Sabre or Apollo at their largest, is the fact that alternative routes to airlines, hotels, and retailers exist. For instance, in the case of hotels, customers can call the hotel directly or can call the hotel chain’s central reservations systems, or can enter the URL for the hotel’s own website for reservations or can enter the URL for the hotel chain’s central reservations websites. The concept of relevant market share, which was a critical part of the Microsoft antitrust litigation, is likely to be a crucial factor here as well in assessing how important Google search is to companies’ access to their customers.
What else will the Department of Justice need to show? It will want to show what the economist William Baumol has called contestability is absent, which is usually taken to be an indication that market power can be obtained, and it will want to show the abuse of that market power. (Interestingly, Baumol developed the theory of contestability when he was consulting for AT&T, and he developed the theory to argue that there were cases when even 100% market share did not constitute monopoly power. In contrast, we argue here that even without monopoly market share, market power may exist). His test for the presence or absence of contestability is the ability to earn enough in one industry to subsidize others. The test for abuse of market power is both prices that are too high and the use of these subsidies to deter entry by competitors. In the Microsoft trial these two were established simultaneously, and the same can be done here:
- Google is earning enough from sponsored search to subsidize almost all of other businesses, including gmail, Google Office, Latitude, gDrive, and others.
- Google is indeed subsidizing these other businesses, deterring entry and, ultimately, allowing them to charge monopoly prices later.
What else would the Department of Justice want to demonstrate?
- As long as Google provides its services to consumers without charge, consumers will have no reason to switch search engines. This is not strictly true; more precisely, as long as the combination of natural organic search for most searches, and sponsored paid search for searches related to purchase decisions is effective, then consumers will have no reason to switch search engines. The Department of Justice will probably want to assess the quality of organic search and of paid search to determine why consumers are satisfied.
- As long as Google has the market share that it currently enjoys in sponsored search, no single service provider dares risk refusing to participate in the auction for keywords, especially those that are part of its trademark and most likely to be used by consumers searching for them. The presence of other search engines with limited market share does not alter the power that Google has over corporations because of the large numbers of consumers that do use Google. The DoJ will probably want to assess the extent to which corporations are being overcharged and the extent to which these charges result in higher prices to consumers for goods and services.
Notice that the argument that Google has monopoly power and that it abuses it does not require demonstrating that Google’s search is superior or inferior. It does not require establishing that Google could do a better job with organic search, or even that it deliberately does not do a better job with organic search. It does not require showing that consumers are harmed directly by lower quality organic search, if indeed lower quality organic search exists. It surely does not require establishing that Google got its market share illegally. It merely requires establishing that Google has monopoly power in a market that is not contestable, and that it is abusing that power to overcharge corporations and deter market entry in other businesses. Likewise, it does not require demonstrating the Google paid search is the only excessive charge suffered by the travel industry and passed on the consumers; at its most abusive, hotels.com was charging a 30% commission while claiming to be a low cost.
I believe the Department of Justice will be able to establish monopoly power and the abuse of that power. Ultimately, the Department of Justice will seek to demonstrate consumer harm, direct or indirect, caused by the high fees charged for sponsored search, and, ultimately, I believe that the DoJ will succeed in establishing this, but these are not essential to establishing the presence of and abuse of market power.
Again, I am not approaching this as an attorney would, nor have I discussed this with lawyers for any of the concerned parties, but I expect that attorneys both at the DoJ and at Google headquarters are already addressing these issues.
Once you break up google, I bet you’ll find out that none of their free apps pay for themselves itself.
Reader, GMail, Youtube, News, etc. are probably all net money loosing applications. Another way to say this is that by making all its apps free, Google (unwittingly?) killed the chance for other startups to compete.
“Why should I try X’s pay product, when Google does it for free.”
And in fact, it turns out that “ad supported” only works if you are an advertising company yourself and don’t produce any original content.
Say it again: advertising as a business model only works if you are an advertising company.
So srsly. Web 2.0 free is over. Nobody made it. So break up google so we can get a marketplace, and afford to bring innovation back in the web.
OMG. Break up a sluggish monopolistic abuser like Microsoft or Intel before an innovator and enabler like Google. WTF!
WTF is right, but you are wrong. Microsoft has innovated much more than google. You are a fanboy with a crush.
“Don’t be evil” is a con job. They don’t even understand the definition of evil. Get over yourselves.
Neither company is monopolistic.
Both companies are monopolistic, which isn’t by itself illegal. What is illegal is attempting to become a monopoly through anti-competitive behavior, which Microsoft has been convicted of, and was probably very lucky to get off with a slap on the wrist, relatively speaking, instead of being broken up like the district court recommended.
Criminal sanctions are also available under the Sherman Act, so Bill Gates could have been looking at three years in the slammer. It has been suggested that the Justice Dept. let him off in exchange for backdoor access for the NSA in Windows. Then will Gates’ money, who knows? –though perhaps I am too cynical being from Chicago.
Useful info:
http://www.ster...rosoft_Case.pdf
For “monopolization,” plaintiffs have to prove that the defendant
1. Possessed market power; and
2. Willfully acquired or maintained this monopoly power as distinguished from acquisition through a superior product, business acumen, or historical accident.
Therefore, contrary to popular belief, for monopolization to be illegal under U.S. antitrust law, it is not sufficient for a company to “monopolize” a market in the sense of possessing a very large market share, even a market share of 100%.
If googleremove sponsored links at top – that are shown as search results, their revenue is half.
The problem is people believed “Do no evil.” Google is a corporation which only goal is to make money. If appearing to give a dam about people does that then that is the formula to use. They are not here to be our friends, to make our lives wonderful. Google exists to make money for its share holders. Just like every single other company in this world that is non-profit.
except facebook.
ha!
I think the reference to Microsoft is quite apt because the Bush DOJ refused to go forward with the Clinton DOJ case against Microsoft where breakup was sought. DOJ had already won the case (establishing Microsoft was a monopolist) and were in the penalty phase when the Bush admin came to power.
How does the government breakup google when they punted on the Microsoft case after winning a verdict that Microsoft was a monopolist and had used it market power to harm competition?
Google is not a life enabler. It’s a life creeper! If Google was a medication, it would be a suppository. It’s supposedly for your own good, but you still have to take it in the butt….
I don’t see the CRS situation comparable with google’s adsense….the product is simply amazing and that’s why people use it. Google has gained its competitive edge in years…in this way, even Apple’s approach is a monopolistic and so why not they should be broken down into competitive entities…?
Infact the monopoly of govt. has to be looked at as well, when it comes to making decisions which are based on personal/individual’s vision and not the vision of the masses.
So… TV and RADIO are not viable advertising based business models ??? … and don’t they produce original content ?
You lost me, there…
google, deadpool ?
lol havent seen deadpool and google in the same sentence on http://anonboard.com so I think it’s fine. Either way, it’s not like google is predatory in it’s marketing tactics, people flock to it because it’s got a good product and others can’t compete. This professor sounds like a commie to me.
Ok. ? So you ‘break-up’ google in what? Google main source of revenue is advertising and that is one big chunk you can’t break..
AT&T was good too. Everybody used them, too. The problem is that Google ads are a monopoly.
So break it up and let the Sprints and Verizons and others come into the game. CREATE your fiercest competitors from within your self.
Search is good, that can be a separate company.
YouTube can be a separate company.
Maybe mail, apps, etc. can be too.
That will *really* drive innovation for all of us.
The problem is when you bundle search with ads, or YT with ads. Those products (and ads) are good enough to stand on their own, and not rely on the monopolistic sheltering they enjoy now.
Breaking up Google is not a punishment, it’s a reward for outsized success.
Breaking up Google creates MORE innovation and More great products.
It’s more simple than that.
The Anti-trust case against Microsoft was based on MS not providing hooks in it’s software.
Google provide NO HOOKS at all into it’s office software.
Such as can we extend or change settings in Gmail or Google Docs(Rightly.com) No.
So there is your premise.
PROBLEM:
http://www.usdo...ms_exhibits.htm
Evidence. Back in the day when Gates ruled the land, he was under the impression that he was untouchable like Howard Hughes. He kept physical copies of all the documents and minutes of meetings where MS people planned to crush and put people out of business.
Sergey, Larry, Shmidt and friends are smarter. They will have destroy retention times on docs.
After a DOJ warrant, I suggest spying their Google VPN network and decrypting their VPN with FBI cypher busting tech in real time.
Once you have a couple months worth of Google traffic, filter it for keywords and phrases, such as I’m going to “fscking kill kiko.com”.
Build your case on that and the lack of open API to their office and other suites, and go, go, go.
That’s how I would *start* doing it.
Except, well, Google provides an API for docs.
Do your research before you criticize true innovators.
Exhibit A: http://code.goo...is-spreadsheets
Haha… FBI cypher busting tech! Why don’t you just call in Commander Data and use the Enterprise’s ship computer to decrypt everything in real-time? Then you could also transport confidential filing cabinets off-site, copy all the documents, and transport them back before they get into the office.
I’m pretty sure that the MS anti-trust trial wasn’t primarily about providing an access layer API; but that they gave $3 discounts per install to OEM’s who did not display a different browser icon on the desktop. (added up over millions of installs by HP/Dell/etc and you have some significant money).
We’ve been using adsense for almost two years. Couple weeks ago our account was put on hold without any explanation.
We wrote to our account manager at Google. She replied once about looking into it. Since then, she’s been missing. We’ve sent over six very polite emails.
This is beyond ridiculous. We are not running a mom&pop site that makes pocket change. We were running a business off of adsense. Increasingly it’s becoming clear that doing that is a mistake–primarily because of google’s pathetic attitude, the source of which is the lack of competition.
Google doesn’t owe you business. Realize that when your business plan is to piggyback off of someone else’s service, you run this risk.
Lou (and Jay below),
Google does owe it to people that use its service to not terminate the service without reason or regard.
More alarming, and demonstrating the analogy to the CRS services and airlines, people that generate revenue from Google’s adsense can no longer survive if Google chooses to drop them from their client list.
Your argument about piggybacking on someone else’s service or diversifying is akin to accusing airlines piggybacking off of the CRS services, and telling them that they should diversify into textbook publishing.
Regards.
adding to the idea of building a business piggybacking on someone else’s business, isn’t that what google does from the beginning? except it does it in large scale. For example Google Books, Google News, Gmail(customer data) and the list goes on…
Kevin,
My argument is not akin to anything. It is specific. I didn’t say airlines should go into hot dog production either.
It does not change the fact that a CRS is no more unique than any business making a conscious decision to arrive at a solution for lessening an external dependency by going into new directions or pursuits. Look into any successful venture that arrived at a choice to control some element of production or the service chain to be held within the corporate fold.
Again, that diversity is that which gives the company greater autonomy and control.
-Jay
“We were running a business off of adsense”
You might want to try this Google query:
http://www.goog...diversification
HTH
We have also experienced the implications of Google’s monopoly in the search business. They definitely seem to be manipulating things to optimize their fees and have zero accountability because they know you can’t go somewhere else.
Look at click fraud for example. Google pretty much just discounts it even though companies doing ads with them get a very large percentage of bogus clicks.
Because of their lack of competition, they have no need to step up and deal with these issues….because what is your REAL alternative?
I also find it pretty ridiculous how Google has been able to bolt all of their G-apps into Android and have made no attempts to faciliate using other applications. In fact, what Google is doing in Android makes their questioning of IE totally ABSURD.
Beyond Google being in a position where they can can and do abuse their position because of lack of REAL search alternatives, take a look at how much data they are capturing on every click because they can sucker people to accept their “Free” applications or use their “helpful” tools.
I am so glad that Google is finally losing their image of being un-Microsoft like. Companies have an obligation to their sharholders to maximize shareholder value and Google is no different and clearly will do whatever it takes to do that.
It is good to see people finally starting to figure out what Google is really all about.
What Google is doing with their *open source* OS makes questioning IE absurd? Huh?
So let’s see how long it takes before Google expands their “open source” to make it just as easy to select and use something other than Gmail and their other apps. In the end, Google controls the OS that is released to the consumer by default.
I tell ya what. You answer me one question. Have you EVER given your social security number to anyone OTHER than the SOCIAL SECURITY ADMINISTRATION? Well, gee.. that’s a collection of information not needed. Why don’t you go and find all those people, the utility companies, credit cards, and agencies that demanded that number as part of their business practice. If you don’t like the idea of the data being collected, here’s a thought.. don’t allow it to be collected. Don’t kid yourself. You are a sheep like everyone else. Don’t stand on your high horse. I think it’s ironic also that the term “open source” and “control” would be used together in the same sentence.
Look at click fraud for example. Google pretty much just discounts it even though companies doing ads with them get a very large percentage of bogus clicks.
Spoken like a true ignoramus. Google has taken massive steps towards fighting click fraud, so much so that fraudulent clicks are scrubbed and refunded.
Google’s intention is to be the #1 adserving platform in the world. Don’t you think they’d try to deal with things like click fraud on a daily basis?
Google does minimal in refunding for click fraud. Please call out specifics on refunds because I only hear of them backing off when companies with large ad budgets bitch load enough.
Sure they go through the motions about doing things to reduce click fraud, but reducing click fraud only reduces their revenue and would do nothing to get more people to place ads.
I would never call you ignorant however. Dumbass will suffice.
Call out specifics on refunds? That would result in a breach of client confidentiality, lol. I’m not that desperate to prove a point.
Take it from someone who used to make $2500 a month on adsense and was dropped without rhyme or reason, Adsense isn’t the only game in town and no where close to the best. To this day i have met thousands of people dropped from adsense, and I have yet to meet a single one who has ever been given a reason much less had their account restored.
Do you have AVG? Did you know that AVG used to have a preventive web safety system that would automatically click on every single link on every page you visited?
Maybe Google detected masses of self-clicks thanks to that, who knows?
But I do agree that there need to be better alternatives to AdSense. Lots of great advertiser-publisher-direct initiatives out there, but someone needs to put a better contextual offering together.
AVG didn’t “used to” have a link scanner – they still have one. But it does just what you say – and perniciously so. Buuuuuuuut…I wouldn’t go all “Let’s just blame AVG for G’s clickfraud stats”, either. That’s a bit of a stretch – don’t you think? How many people use it? I doubt if it’s over 1 million, since it’s quite resource-intensive, buggy, and slow (sort of like an old copy of AOL) so I think we’re talking, statistically, a factor of nil here.
http://free.avg...m-1241#faq_1241
I’m happy to see this subject being aired on TC, although I find the actual article to be frustrating and unconvincing. That does not detract from the subject matter which most certainly IS valid and requires MUCH wider debate.
I represent a decent sized web publishing entity. We do $xx,xxx per month in Adsense revenues and $xxx,xxx per year in Adwords spending.
I can tell you that there is a lot of static among my peers right now about the subject of an Anti-Trust suit against Google. It’s been growing noticeably louder in the last six months or so.
There are a lot of publishers, large, medium and smaller, who, privately, are salivating at the prospect of airing their grievances en masse, under the ‘protection’ of a DOJ or EU suit. Let me explain why.
It’s really quite simple. Everyone is sh*t scared of doing or saying anything publicly against Google, individually, because Google has so much power to determine people’s incomes and livelihoods. But once the flood gates open, Google will be in for a tsunami of disgruntled ex and current publishers with horror stories to tell, of biblical proportions.
One other commenter mentioned ‘thousands’ of publishers who felt their Adsense accounts were disabled with no adequate explanation, no reason, no recourse. I would suggest there are tens of thousands. The DOJ or EU won’t need to search very hard to find them. They’ll be busting down the door of the regulator as soon as an investigation is publicly announced.
The fact of the matter is that Google so clearly operates in a Monopolistic position in relation to Adsense that it’s almost pointless to explain. But here goes for the uninitiated. For the vast majority of web publishers who have ‘advertising income’ as their primary business model – and that’s tens of millions of websites – there simply isn’t a viable alternative to Adsense for Publishers. While it is true that in certain niches, or, once you get to a certain size, alternatives do exist, this is a small percentage of sites. You can’t beat Google Adsense for an average website.
Now some would think this shows what a great product Google Adsense is, and it is true that it is well implemented. But much of the ‘greatness’ comes from size – think eBay being the best place to sell something second-hand because that’s where the buyers are, and being the best place to buy because that’s where the sellers are. The question will come down to whether Google engaged in anti-competitive practices to get to, or stay in this position.
That’s for the spooks and the suits to figure out. I don’t know the answer. What I do know is that the clouds are getting darker for Google and the thunder is getting louder. And we’re all standing here in our rain jackets, waiting.
Exactly the same thing happened to a company that I worked at .. no reasons, no explanations and the google account manager suddenly was uncontactable
Problem is google accounted for 80-90% of all traffic and there is nothing you can do about it
If your business is all about arbitrage, I hope it will be over soon. We have all ready a lot of trash out there. We move from link to link and you make money from it. It is wrong!
Well, I’ve been saying for at least 2 years that Google needs to be taken down a few notches – they’ve become too powerful.
On the other hand, they’ve become powerful by doing things better than their competitors Microsoft and Yahoo!, and the rest of the three tier search engines.
So where does that leave us? With a legitimate role for Government of regulating Search Engines, or atleast, aspects of their services.
Whether they’ve become too powerful is not the issue. One would need to prove that they’ve used said power abusively. You can be powerful and benevolent.
You want the government to regulate this? Worst idea ever. There isn’t even anyone in the government who understands the concepts at play here. If they did, they … wouldn’t work for the government. They’ll just fcuk everything up, like usual.
The last thing we need is more government regulation. Do you really want the government to have a say in what a search engine shows or worst doesn’t show you? I certainly do not, in fact doing so could be a violation of the first amendment. It could be argued limiting search results violates free speech of the people that may appear in the search results because you are in fact limiting their ability to be heard,
I agree. The last thing we need is more government regulation on the Internet.
The reason why the Internet is booming as much as it has been for the past few years is because it is, for all intents and purposes, a digital Wild Wild West for anyone to stake their claim and make it big.
Government stepping in and taking action against Google will not help matters; if anything, it will stifle, rather than encourage, innovation.
Internet is great because of the lack of red tape – let’s not ruin that, folks.
Spoken from someone who obviously does not pay material amounts for ads with Google and has no interest in selling competing apps or services.
Since when was government regulation ever a good thing for profit?
Oh, right, DMCA, but apart from that?
Google DOES abuse it’s monopoly position when it comes to advertisement and search engine presence, but will government interference do more harm then good?
Google offers free products, few strings attached. How do you compete with that? Cost-benefit ratio, make something that is better enough then the free stuff that people will pay.
Who cares that Google’s freebies prevent competition by paid services? Only the those who wish to compete. Again make something better for the price, get the word out and the customers will switch.
Those who wish to compete with Google, take this advice: Innovate or DIE! I will rooting for you!
Many of the thing Google has been doing is wrong, government intervention In Google may be needed, but it should be done in a way that users get to keep their cost-benefit ratios from Google freebies, and then some. Antitrust laws should always protect the customer first!
-Timothy
My first comment on this website, I accidentally hit reply instead of commenting at the bottom. Sorry! That was not a direct reply to the comment above.
-Timothy
I believe you’re missing on how this harms the user. Innovation isn’t free, and companies who would otherwise innovate will not be attracted in to a marketplace where there is a free product that may do 95% of what their product would otherwise do. The reason Google can offer their products free is because of subsidies from their adwords product – other companies or startups do not have this luxury.
Google actually removes the incentive to innovate within other markets. Now if google charged for their products so that those products were profitable as a separate business from adwords…
…which is kind of what this whole article is about.
Google said it themselves – they should be thought of, first and foremost, as an advertising platform.
AdWords is what it’s all about. All the free services Google provides on the periphery (Search, Mail, News, etc etc) simply exist to generate user activity and traffic, ultimately creating inventory for Google to sell.
Of course, Google spends massively on R&D – they need to keep their products ahead of the curve if they’re planning on keeping their userbases, and ultimately, their advertising inventory.
While it is true that Google dominates search, it only dominates one sphere (if you think about it). If I wanted to find a hotel, I’d rather use a specialised hotel search engine (that understands things like star ratings, customer reviews, rates and times and etc), than Google. Ditto for car rentals, computer equipment, airline tickets, and so on and so forth.
There’s massive potential for niche services like that. But since it’ll require an investment beyond a well-structured website, and since the best service providers are well-indexed on Google already, why bother with the extra capital outlay?
It’s not that Google’s stifling competition – it’s that the competition sees no point in competing.
We can’t claim that Google is a monopole. Contrary to Microsoft, Google allows users to choose other search engines. If a company success the dominate the market because its good – you can’t do nothing about it.
Of course we can’t claim that. Monopoles are purely hypothetical at this point.
Lol?
And you should have gotten more acknowledgement for a good remark than any of the other replies provided
Well, you can start making the argument by their contracts with Mozilla, now the most used browser in several European countries. Google is the default search in those browsers.
Then you cobble this with their mobile OS Android being preloaded on an ever increasing number of smart phones with different service providers world wide.
Then you cobble that with the fact that Google has the defacto search engine and their adverts run on the majority of websites that advertise on the internet.
Then you cobble that with the fact that their API to change settings in their office suite is unpublished, which is the single fact that got Microsoft embroiled in an anti-trust case.
Cobble that with the fact that Google actively requests to be part of Anti-trust cases against it’s biggest competitors such as this request to the EU to participate in the Microsoft IE anti-trust case.
http://www.wire...oogle_microsoft
Then you take it world wide. The EU and government of Korea are especially trigger happy when it comes to Anti-trust.
While one of these pieces can’t be used alone, a culmination of the many pieces could be used to provide a global picture of a monopoly.
I suggest a hierarchical style vizio schema detailing this if they were going to go ahead and do it.
Cobble that with the fact that Google buys out or destroys it’s nearest small competitors.
Cobble that with the fact that Google actively headhunts employees at it’s competitors to cripple it’s competition.
IE, Mark Lucovsky and Dr. Kai-fu Lee et al. They did this for at least 100 high ranking people at various competitors.
“actively headhunts employees at it’s [sic] competitors”
Ridiculous. It’s not necessarily about crippling the competition, it’s about finding the best people, and every company does it (monopoly or not). Name me ONE company that doesn’t try to recruit talented people.
Great points.
Very interesting read. Great article.
What to break up? Google Advertising? This is their main source of income.
Cheers.
Em
This is the whole point. If Microsoft couldn’t convince people that the browser was part of the OS, how can Google possibly convince the courts that the ad platform is a natural part of a search engine. That is absurd.
Since Google is now a monopoly, and search is a utility. Google should be forced to to license their search separately. They should also be prevented from illegally tying their search and adwords offerings like they do with AOL and MySpace. Furthermore, they should be forced to allow other ad providers to display ads on the Google search engine results page. If the AdWords ads are the best then so be it, but if Yahoo, MSN, or someone else has a better ad for that particular query then it should be displayed. Certainly Google should be given some cut of that ad revenue even if it came from a competitor.
Furthermore, they should be forced to allow other ad providers to display ads on the Google search engine results page.
James, let me tell you something. Any marketing agency worth their salt will know one thing when it comes to Search marketing – Google is the biggest platform.
I work for a search marketing company, and I can say without fear of contradiction that every single one of our clients has campaigns on Google. Some of them have campaigns on MSN, Yahoo, Ask, Yelp, Miva, etc etc, but a Google campaign is effectively a cornerstone in any search marketing effort – if you don’t have one, it’s gonna be a very shaky house.
So imagine you search for LCD TVs. If LG is running a search campaign across multiple engines, they’re likely to have the same creatives on Google, Yahoo and MSN.
What would be the point of loading an MSN creative into a Google SERP? None whatsoever.
If it’s elsewhere, it’s also on Google.
What a great point. I’m reading through all of the different comments and this one is one of the first that I feel definitely makes sense. I’m reading some great concerns, but this put things into perspective. Love the line: If it’s elsewhere, it’s also on Google. Nice touch!
Interesting article, but I don’t understand why it was written by a non-lawyer, that – to his credit – states that he isn’t a lawyer and that his opinions aren’t based on legal thinking.
If such an article is to be written, shouldn’t it be done by a lawyer specializing in this area? Or, at the least, in collaboration with such?
As the article is, the big IANAL statement kind of prevents taking it seriously.
wheres mike? we miss him. if you look at googl results you will see massive room for innovation. garbled algore results will soon be a thing of the past. my platform offers personalized “social as a service” business applications that giggl cant compete with. vertical channel location based social networked results are the future. where is googl’s consumer and business social site? is it orkut? where are their personalized consumer and business social offerings? addense = adspam. dont fear googl because search is dead and social location is everything.
EnterpriseLocator.com – be bold
OK let’s say for a moment Google is broken up, how exactly would that happen? If Google is broken up from its Ad/search and all the other services, either as two or multiple parts the other parts would likely fail leaving Yahoo and Microsoft as the most likely alternatives. Thanks to Google, Yahoo and MS have had to expand their own services. For example, before Gmail, MS’s Hotmail and Yahoo mail offered small mailboxes, so small in fact they were barely usable by anyone but lightest of users. Google changed that and that helps consumers. Breaking up Goolge from its services would harm consumers more than help them. The advertising business would still exist unless the DOJ intends to close them down. For Google’s paid services such as Google Apps I don’t see ads when I use those services which doesn’t help Google’s Ad business but I paid for the privilege of not seeing those ads. MS and other email services have the same benefits but charge more for them. For all the complaints about Google they have brought about some great competition. Google Docs brings to the table an alternative to MS’s own Office product. It isn’t a complete replacement but it is a viable option for many people. MS Office is priced out of reach for consumers but has a monopoly among business users forcing consumers to buy the solution, Google provides a reasonable alternative. Obviously there is an argument for monopolistic behavior by Google and while they may dominate one market breaking them up wouldn’t change anything except potentially close down other services which would harm consumers.
While I’m not a legal scholar, would there not be a burden to show that there is a draining concentration of wealth and market assigned to any such monopoly? And in the case of defining that market concentration, would there not also be the issue at hand of demonstrating how this is uniquely constrained in such a manner as to prevent entry by any others to that market?
Or in more plain English:
I’m sure the DoJ has read “Harrison Bergeron” already and has PLENTY of other CRAP to chase before even thinking to muddy waters with a protracted and tax dollar draining goose chase.
Google Chrome and the T-Mobile/Google G1 are other great examples of Google exploiting its monopoly power.
As you surely recall, they are advertised on the Google homescreen (www.google.com) using their most precious in-house advertising asset – the textlink right below the search buttons. This asset cannot be purchased by say, Microsoft to advertise IE8 or by RIM to advertise BlackBerry. It is only used by Google to promote its own products.
Assuming Google has about 200m searches per day from the homescreen and with a CPM of say $5 for this prime spot, this is equal to $1m of free marketing per day. Essentially this means that no start-up can dream about competing with Google on a mobile OS or on a new browser. It would be just as if Microsoft presented a small banner ad whenever you click on the Start button.
There are many other examples for Google exploiting its power that in turn limits consumer choice. One of the suggestions to DoJ is to prevent Google from advertising their own products on any of their Search screens.
Eric:
Thank you for the elaborated post!
This is not monopolistic behavior, there are plenty of G1 alternatives from T-Mobile. By your argument Apple could be a monopoly for the iPhone because the force you to use their services if you want to use an iPhone. Further Android is open source and it is free to be altered by whomever. MS could take it and customize it to their services. The fact they have chosen not to do so doesn’t make Google’s offering a monopoly.
Under that assumption, Microsoft would have no issues with what they have done with their OS and supporting applications. You always have a choice, but Google is effectively eliminating only but the very biggest from taking them on in anything they want to own, which has become pretty immense. In some lines, even the biggest are placed at a dramatically unfair disadvantage.
Google is no white night.
The choice between operating systems and search engines cannot be compared, for obvious reasons.
The question is of market power. If Google can use their homescreen placement to advertize the T-Mobile G1, this puts any other non-Android OS in disadvantage because they cannot advertize their products on Goolge’s homescreen.
Same goes with browsers. Google promotes Chrome using their in-house inventory. This eliminate the option of competition from other players.
It is just like with Microsoft. Had they had display banners on their Start menu that advertize Windows Mobile or Xbox, we would consider that a misuse of market power. Microsoft is not allowed, for that reason, to market their other businesses using the Windows OS.
In both cases, consumer have choice. They could use Yahoo Search or an Apple Mac. But it doesn’t change the fact that in both cases there is (or in Microsoft’s case, would have been) a misuse of marker power.
Just like Microsoft is not allowed to market their own products using their OS, Google should not be allowed to market any of their non-search related products using their search engine.
TCCritic said…
Just like Microsoft is not allowed to market their own products using their OS, Google should not be allowed to market any of their non-search related products using their search engine.
I am against Google supporting the anti-trust case against Microsoft, but I support Google 100% of what it can or can’t do with its own products, that is what you call property rights, and the rights to those properties belong solely to Google and not DOJ nor the consumer, such as yourself TCCritic. That concept is very simple to understand.
this puts any other non-Android OS in disadvantage because they cannot advertize their products on Goolge’s homescreen.
That’s advertise with an S, btw. S for Horace.
I don’t see how not having a particular piece of inventory puts you at a disadvantage when it comes to marketing your product. In my country, Facebook gained a userbase of just under 1 million since it’s launch, without spending a single cent on marketing.
The same can be said for Twitter, who has God-knows-how-many-millions of users. They didn’t need to appear on Google’s front page, did they?
If it’s a good enough product, the blogosphere will talk about it, and if that happens, it’ll become every bit as famous as if you had $1m a day free marketing.
Unless if all you ever do online is stare at Google.com, which is also possible, I guess.
I agree, Falafulu Fisi. I support Google 100%. I’m not understanding why they shouldn’t be allowed to use THEIR products to sell their products? Google is the leader for a reason. It wasn’t an accident.
This is no longer the only option. iGoogle replaces the home page, including the Google services links, with a customized-by-the-user page and allows people to put whatever widgets by whatever provider they want. Including Microsoft Live Search updates, for example (if M$ were savvy enough to make such a widget). I never even see the standard google page unless I’m on someone else’s computer.
Great post
I am just so happy that google makes enough money to subsidize gmail, youtube ….
Google is only company(I know of) that has not stifled innovation after acquiring dominant market share in its various sectors.
Oh, but they’ve acquired other companies before, and let _them_ stagnate. Generally the highly-unprofitable social media ones, though.
Don’t you love when other companies fail to compete that they decide that a lawsuit would be easier than actually creating a good product?
Total nonsense. ANYONE can compete with Google, they just need a better search engine. There is NO Such thing as a ‘Monopoly’ unless GOVERNMENT MAKES it a monopoly or Protects it as a monopoly [IE Amtrak / Post Office].
Look up “natural monopoly”
yup, it’s funny how google want’s to be on the EU’s IE anti trust case.. funny stupid
Google is a wonderful product. this system not only helps people but creates new sciences like SEO so if it is monopoly that helps people, let it be so!
It’s not that people don’t appreciate Google’s free services but I have to agree with SRSLY PPL about Google inadvertandly killing startups by jumping every bandwagon Web2.0 had to offer.
You mean like they killed Twitter?
You mean like they killed Facebook?
Great analysis.
There are some other things that fit into this.
Google has engaged in illegal tying. For example, in their deal with MySpace, they prevent MySpace from using any other contextual advertising providers even if the said provider does not compete with Google at the time. Essentially, utilizing its monopoly power to prevent competition in adjacent markets. This is similar to what Microsoft did with Internet Explorer and restrictive contracts with ISPs in the 1990s.
Also, Google’s search engine favors video results from YouTube over other video results even if the other video results are very relevant. For example, an illegal copy of a CNN video on YouTube will show up higher in the search results than the original video on cnn.com would. Often the original video location isn’t even on the first page. Google is using it’s monopoly power in search to protect YouTube from video fragmentation, and to force publishers and advertisers to continue to pay inflated prices for Google’s advertising.
Google is a monopolist engaging in illegal activity in even more ways than this post points out.
Wouldn’t the youtube videos be placed higher because of youtube’s high pagerank etc?
Do you know for a fact that they deliberately place youtube videos higher?
FYI: I am no expert in this, and I’m simply wondering if they do or not.
it’s a bit sad that half of you don’t realize that could could, if they wanted, manipulate half of what you think without you even noticing.
not to mention the insane amount of data google already filtes out of your search results these days.
I would be really really really careful with what i say about google and innovation. not only do they have quite dubious investors, but also are far more dangerous than microsoft could ever be.
Google is not a monopoly. DoJ should read some economics, but really, the deal is that the state just wants to rob another company.
At least Bill Gates participates in some philanthropy.
What did Google buy a jumbo jet?
http://images.g...es?q=google+jet
dicks. Watch me get thrown off a rocky cliff at IO this May. :/
Yes, let’s criticize them for using their money how they want to. That’ll strengthen your case.
There is no case. This is fantasy.
A case will not be brought against Google in our lifetimes. Matt Cutts worked at the NSA. There are a myriad of other reasons this won’t happen, most of which involve fair warning, and backing down as we saw with the Yahoo deal.
My comments were mere conjecture as they always are.
Funny you should use this image service to prove your point.
um but see people actually like google’s products
I expect that attorneys both at the DoJ and at Google headquarters are already addressing these issues.There are many other examples for Google exploiting its power that in turn limits consumer choice.
8 O’clock said…
There are many other examples for Google exploiting its power that in turn limits consumer choice.
8 O’clock may be you can wake up early at 6 O’clock and realise that Google has every right to exploit its power, because the Google entity (property) is owned by its shareholders and managements and the rights to that entity doesn’t rest with the consumer. The consumer don’t have any rights at all, only rights to buy what is available to them provided there is an agreement between the consumer and the producer (property owner), simple as that.
Easy to claim this now – but you’re probally one of the MS haters who will be contradicting exactly this when it suits you
I use both Google Adwords and Adsense; I can tell you that the SOB is a monopoly…!!
Sorry, but I do not trust anything that Eric Clemons write… He is known here at Princeton as an uninformed lunatic. Students leave the classrooms in droves when he shows up.
He recently wrote in TC that Bill and Melinda Gates have already cured AIDS in Africa. A lie the size of an elephant. Or of many elephants…
Please do not waste your time reading his crap.
They found a cure for AIDS, you know. It’s called “abstinence”, someting which is incredibly hard to administer to rebellious, hormone-charged youth
All you have to do is stop clicking on ads and use MS or Yahoo search. Google looses and you don’t need an antitrust hearing..
We would, if only they would improve their spiders to gather more relevant and up-to-date results :/
I could search Yahoo or MSN straight from Firefox like I do with Google, but the chances are that the results returned to me are second-rate, and that’s purely the fault of the engineers and their code.
There is also that problem that there are people out there who only know google. They think searching on the internet IS google. These are the same people who think a computer IS windows, and it must be broken if it doesn’t have Miscrosoft Office on it.
The sad thing is this is a very large percentage of users, maybe not the users who post replies to articles, but users that are just as valuable (if not more so because they probably don’t know how to block ads and are more likely to click) to these companies.
Yep, keep your idiots well – their wallets are open and their minds are empty
“How can a firm seen as a triumph of creative capitalism and a virtuous contributor to the economy (“Don’t be evil!”) possibly be suspected of anything?”
Quite easily. Creative capitalism in the context of how Bill Gates describes it is what my business does. We leverage investment by governments to work together to eliminate poverty in Eastern Europe where there is obstruction from organised crime.
Google hosts a smear blog about us and will not respond to any complaint about it. In their actions they assist mafia who cause misery and exploitation of children in institutions we describe as Death Camps for Children.
Splitting Google would also impact America’s position as the information super power in the world.
http://news.bbc...ogy/7421099.stm
“reports that the Canadian government has a policy of not allowing public sector IT projects to use US-based hosting services because of concerns over data protection.
Under the US Patriot Act the FBI and other agencies can demand to see content stored on any computer, even if it being hosted on behalf of another sovereign state.”
As long as any US company hold’s the worlds information on servers in the United States, it is subject to review by the US.
If a foreign company were to fill the shoes of a weakened Google, like Baidu, it would be extremely against the interests of the United States in my opinion.
apostrophe should be on world and not hold. Sorry about that typo.
should read:
As long as any US company holds the world’s information on servers in the United States, it is subject to review by the US.
Imagine X anti-US organization wants the latest mobile swag. They buy a bunch of iPhones or G1s to get with the times.
The US now has their longitude and latitude anywhere in the world at any given time with Google as a nexus.
Propaganda sponsored by M$.
Put Monopoly and Google together in a sentence and let the audience decide.
What a cheap trick.
You need to remove that probe Google put up your ass when you were sleeping.
Damn, that’s where my pencil went. Yawner, you’re getting me a new one.
Ok, you busted me with a chuckle.
Eric,
First of all I want to thank you, because it’s probably the first article on this blog in a YEAR that makes sense and has been written by an adult.
As somebody has pointed out up-stream everybody who has used AdWords INDEED KNOWS how this monopoly works: you CAN NOT buy clicks for your words cheaper than the certain amount. You just CAN NOT. That’s how the prices are driven to the crazy levels. $5 a click, $10 a click just to ACTIVATE your word? This is insane, people.
Secondly, but more importantly. I had an exchange with Mr. Doer once (some 5 years ago, before the IPO of ‘G’) when he said that ‘Google has a mature business-model’. My point was: why nobody pays attention to the fact that the revenue stream of this company is in inverse proportion to it’s alleged core competence (which is presumably ’search’)? In other words:
IF THE SEARCH ENGINE WOULD SEARCH PERFECTLY THERE WOULD BE NO AD REVENUE AT ALL.
Another examples of this type of ‘maturity’ in a business-model are:
If you are a bad worker you have more chances to lose your job and live off the unemployment subsidies.
If you are the only doctor in town and you charge your patients the worse you treat them – the more money you make, because they come back over and over again.
Think about this contradiction, people. It’s important to understand where this abuse of market power comes from.
Once again, thank you for the meaningful article.
P.S. For your future researches: PayPal(r) – tying, ‘no-surcharge rule’, ‘no-discouragement’ rules of eBay, cross-subsidies, ‘refusal to deal’, price gauging etc.
Eric, I must say your logic here escapes me. Anyone who has read anything about Google knows that their key value proposition when they started was that their search engine was 20% more efficient, faster, more accurate than everyone else. They implemented Page rank and other techniques to make it more relevant. They could not convince any companies to buy their superior technology (including Yahoo) so they started Google.
In short, Google has dominated search because their technology is superior at search. If you knew anyone at the company or had been there you would know they are obsessed with making search better.
Your notion that they have a vested interest in doing search poorly so they can sell targeted ads instead is ludicrous.
A Google exec wrote “the best form of advertising is excellence” and Google exemplifies that better than any company I know.
They believe now and have from the start that being the best at search is their greatest strategic advantage. Given their lead in organic search, they appear to be right.
Were you talking to me, kid? Or were you responding to Eric? You may continue to make your indoctrinated case as much as you want, because you just don’t know what is what. Open any BOOK (no, wikipedia will not be enough!) and read something about Sherman Act, price gauging, tying and refusal to deal. You may be surprised by the MEANING of these terms, because that’s EXACTLY what this crowd led by Google has been doing for quite some time.
Haha, I just read the rest of your comment, and I couldn’t help but notice that you’ve got several incredibly flawed assumptions there.
Firstly, a perfectly working search engine will produce the best possible organic results. Who do you think is responsible for those results? The engine, or the sites on which the keywords reside?
Secondly, a perfectly working search engine will also produce the best possible paid results, because to me as a surfer, it’s largely irrelevant whether it’s paid for or not, but getting relevant results is very important to me.
Thirdly, automatically assuming we’re indoctrinated by anything is a sure sign that your own views are a tad skewed. Don’t believe me? Try looking at your own arguments from someone else’s point of view.
You’re also assuming, among other things, that money is inherently evil, that corporations only grow by devious means, and probably that Google represents some or other form of the Antichrist.
But in short, and this is what I wanted to say from the beginning: Trolls like you are excellent fun for bored people like me
$5 a click on AdWords? That’s shit-poor keywordset management, my friend. If you actually know what you’re doing, you can go as low as $0.10 per click and still get qualified traffic.
And don’t try hitting me with the “youre-a-dumbass” line. I’m a qualified AdWords consultant.
Your argument is ludicrous. Fails even rudimentary antitrust (American) antitrust law.
To start:
a) Google has no lock-in on any consumer users;
b) Where is the anticompetitive *practice*? In the US you cannot commit a violation without an explicit act that harms competition;
c) Is there evidence that Google has pricing power over its adwords users?
The really interesting thing that no one brought up is that search advertising (whether it be yahoo, google or microsoft) competes unfairly with every other form of advertising. Just because the very last thing someone did was search for something doesn’t mean that the search engine should get all the credit for the sale. True attribution would be one way to break google’s (and others) outrageous stranglehold on the revenue in the online advertising space.
It is always interesting to hear the people who blame corporations for their lack of foresight in diversifying their revenue streams.
People build businesses around eBay auctions and Google/Yahoo SEO techniques because you can build a business very quickly, compared to building it in the bricks and mortar world. One reads tales of the 20 year old who built an Internet business in his room and now makes more than his dad.
That kind of meteoric business rise is virtually un-heard of in the B&M world but it should come as no surprise that business built so quickly can also fall just as fast.
It is the nature of online business built purely on traffic that companies like eBay, Yahoo! and Google are powerful gatekeepers that can kill your revenue in a heart beat. If your entire business model relies on traffic from these companies then that is your fault not theirs.
Are they to be faulted for poor customer service and draconian client policies? Definitely. Should they be chastised for unilateral actions that affect small businesses? Absolutely but that is a far cry from anti trust action by the DOJ. Perspective is required in this debate.
That’s exactly what every single one of the Microsoft lawsuits was based on, AOL & al.
This isn’t the age of standard oil where this type of thing is black & white. Technology and information based services are too wishy washy for that.
What is the difference between AOL having invested in the MS Windows platform as their house of cards, or somebody building on top of Google or eBay as a house of cards foundation???
The logic has shifted from the client’s machine to the server/thin client?
That makes no difference in what is going on.
Again, this is just conjecture.
Most businesses that are getting screwed by Google on ad pricing and click fraud are not dependent on search, but clearly Google search provides a significant marketing channel that they must utilize to optimize their business. Google knows that and clearly has no concerns about the competitiveness of their ad model. All of their energy is creating an ecosystem that further entrenches people in using their search engine.
You know Android API provides a great way to tap all that Google goodness before it hits their servers.
But most people already know that.
I personally agree that Google should not be the target of anti-trust legislation, but it is amusing to muse over it.
Android is nice because you can install and exploit the OS without Google’s consent and they can never turn you off.
One-off changes that do not become part of the mainstream release are meaningless to Google’s ambitions.
I’m kinda taken back by all the google hate here.
They’ve stated over and over that they provide all of their online services in order to get people online. If people are online you can advertise to them… you can’t advertise to me in Outlook… but I use Gmail. Why? Because its an amazing email client. I also use Docs, and Calendar for sharing info/meetings because even computer illiterate people get it. When I’m on my PC I use Chrome. Because its quick and a pleasure to use. I’m not loyal to Google, I’m loyal to the best designed product.
Yeah its a big corporation that makes money. If you don’t like it, don’t build a business around it (good pr anyone?) and don’t use the services.
Thank you for some sanity.
There seems to be in general two opinions. On one side users of the search engine and products are generally happy with google.
On the other hand those businesses buying traffic from google know they are getting screwed in the current situation
Surprisingly few people on the internet realize how important advertisements are in keeping the internet free, and are quick to point at the “evils of ads.” If not for Google’s use of AdWords/AdSense revenue on R&D in other products like Docs/Gmail/Calender/etc., keeping these services entirely free for millions of users would be absolutely impossible. And when faced with reading a few ads on Google searches or paying a few bucks a month, the vast majority of consumers would choose the former. To fault an Internet service company like Google for a practice such as this, let alone to use it as an evidence for the “absence of contestability” as this article does, is just plain ludicrous and is short-sighted in thinking about eventual benefit to consumers.
As for the disgruntled AdWords keyword marketers, I would think first about the alternative to the current situation (Google broken up, search market more fragmented) and how much better/worse it would be, before being quick to complain over rising costs. Google may not be the perfect customer supporters (and do fail at some other key functions of a service company), but I am willing to bet that they have never engaged in artificially jacking up auction prices, and that they have evidence for it if needs be.
TechCrunch needs more guest writers.
"It merely requires establishing that Google has monopoly power in a market that is not contestable, and that it is abusing that power to overcharge corporations and deter market entry in other businesses." Merely, huh? How does an auction based system "overcharge" for anything. If one can audit the data properly (or monitor) to assure there’s no internal gaming, I don’t think it will be as easy to prove as Professor Clemons so simply states.
While you might believe that having an “auction based system” automatically implies an optimal price mechanism, I think you’d have a different perspective if you had to purchase ads from Google. But it’s as you say, there is certainly gaming, and what’s worse is that Google hides behind the “auction” to make you think you’ve paid a fair price. I guess they do convince some people…
Google will become irrelevant… fact, the internet as we know it will become irrelevant once we launch http://www.YourNight.com, an gigantic interactive portal that merges the internet with HDTV and provides every business in the world and every person in the world a web prescence. For more information, see an article about us on Techcrunch at: http://www.tech...30;..g-on-gold/
RJ Garbowicz
Chairman, Extreme Enterprises
Spamspamspam…
If only I had a business to advertise…
This argument is embarrassingly stupid.
1) The monopoly-power = overcharging argument would make sense if the whole system wasn’t powered by an auction. An auction is the only fair way to do keyword pricing. If you set the CPM too high, then no one bids on the auction. If you set it too low you get too many participants and people would prefer to pay more in order to guarantee placement. It’s like a corporation suing Wharton for not producing enough MBAs because they can’t get as many of them as they want as cheaply as they want. It’s called capitalism. Have you heard of it?
2) The no-service-provider-dares-risk-refusing argument is easily refuted. Search for “southwest airlines”. Shoot me an email when you find the ad that they placed.
3) For people who are angry about $5 and $10 min CPCs, that’s Google’s polite way of telling you that your targeting sucks and that you should advertise on something else. Google isn’t a charity. If your ad isn’t going to get clicked on often enough to justify the cost to Google and to users of showing it, it shouldn’t run.
4) How is Google deterring market entry in email, web office, and RSS feeds? Yahoo and Hotmail had the same price as Gmail before Google entered- free. Bloglines was free before Reader existed. Free web office clients existed.
Oh! Really? “Polite way”?
hehe.
Listen here, kid, and everybody who’s talking about ‘fair auction’ mechanisms:
1. I’m placing a bid for a word.
2. It goes off and I’m suggested to set up the minimum price for a click more than $10.
3. I enter the key word in search and look at the results.
4. THERE ARE NO ADS ON PAGE! There are no ‘featured results’ there is NO block on the right.
5. This means that THERE ARE NO OTHER BIDS in the ‘auction’! None.
Now tell me how is it not an extortion?
Just tell me if you are in your right mind.
Did you check your regional targeting?
Did you realise that competing campaigns are active even though they run out of daily budget, so when you run your searches, their ads might not generate impressions?
No, really, AdWords Help Centre is full of incredible stuff like this. You should check it out sometime.
Kid, I told you what WAS THERE, and I know what I’m saying, stop taking out your kid’s arguments out of your bag with textbooks. I’m telling you the FACT, not reporting a bug. ‘Auctions’ are just a shade to cover up THIS (only from kids of course).
No, Alex, you jumped straight from assuming that because there are no ads being displayed, that there are no other campaigns in existence. I just explained that campaigns are deemed active so long as the account balance is positive or the credit line is good – WHETHER OR NOT THERE ARE IMPRESSIONS SERVED. Since we’re talking in caps now.
Adgroups can set daily budgets, which they’re more than welcome to run out of. Or didn’t you see that feature?
I think it’s sickening to think that the government needs to intervene because a company is doing to well. To the comment of them being in it for money or looking out for us.. who cares? If you don’t like their business don’t use them. That’s how other businesses start. It starts from a need. Enough people need another option and one will be made. Otherwise, people will grow up around google and learn dependence. Like we have on the big car companies. You don’t see a semi-rich doctor down the street driving a “martin-mobile” or whatever, do you you? Why the hell aren’t people creating their own cars. Perhaps if people realized the government monopolies that already exist they’d quite crying about people like google. Let’s see, you pay tax on the land you reside on why? Because you don’t actually own it. You pay registration for your car. Why? Well, because you don’t have the original “birth certificate” of the car. If you did, they’d have no right to charge you a registration fee. Why don’t you google an article that I believe TechCrunch featured on the software geeks and there cars. If you don’t believe me about the car registration, you’ll find that one software-giant-geek out there understands this. That’s why he DOESN’T NEED A LICENSE PLATE on his car. If the DOJ cracks down on google that just proves that they weren’t getting a piece of the action. And speaking of monopolies. The central bank anyone? Seriously, you have a choice not to use google. And they are not the end all of everything business. The idea of punishing a person or business for being too good.. we’ll.. that’s just sick. Why does the government need to come in on everything? If you don’t wanna get owned by google COME UP WITH SOMETHING BETTER or here’s a thought, be INDEPENDENT or innovative! It’s all these regulations by the government that slow down competition. They bleed most American’s dry with taxes and fees and then the people wonder why they don’t have enough to start something up, why they have to be dependent on them after a while. Additionally, companies are getting used to paying the top dogs ridiculous sums of money and the lower guys just something a bit below the least they could give. They overcharge for everything to put more money back into the top dogs pockets. Back in the day the CEO or the like would make what was it, 5-10 times more than the lowest paid person. What is it now? Like 1000? It’s ridiculous. And the government plays a part in this. The whole damn country is playing a game of live on credit. That way when the chips are down you don’t have money saved up, you actually owe money SO DON’T FALL BEHIND. You want this big screen tv? Okay, well instead of saving up for it.. why don’t you.. hm.. swipe your card. We’ll agree to a price of $1,000 for a tv that cost us $100 to make. Now, it’s not really $1,000 because you’re going to pay interest on it. And the longer it takes you to pay, the more interest we collect. But that’s okay BECAUSE YOU GOT IT RIGHT NOW! And because you don’t wanna spend time checking into something or learning how to do it yourself, you pay someone for that convenience. Seriously, how many of you out there don’t know how to do a basic repair on your computer? Maybe that was a bad example given the reader base. But I mean, going out to eat all the time, handing over your basic electronics to be repaired, paying others to do every day tasks you don’t want to be bothered with. Just like everything else, if you ignore it.. you’ve given up rights to it. This country used to be one giant armed militia. We hired “sheriffs” and slowly forgot about our own responsibility. Now we have shady elections based on the paparazzi’s best of photos. Oh do they smoke in public? Did this guy do something stupid when he was 16? We’ve given away our rights to everyday education between mainstreaming public education and the main media outlets and publications like CNN and the bigger papers. Do you know how easy it is to set up a nation-wide network of do-it-yourself news and keeping an eye on current events? But still we like to wait for the 8 o’clock hair-dos and listen to them babble on for their 60 minute time slots on things that we agree, well, 80% with. That other 20% we just deal with. And we just assume it won’t effect anything. I realize I’ve gone off-point so I’ll come full-circle with a reminder that we’re getting lazy as a society and just giving away rights, freedoms (and I don’t just mean declared rights) and then we wake up one day and cry out and some other big-bad official with their own agenda comes up and promises to make it better by organizing and controling something. Here’s a thought: think for yourself and stop handing away things without thinking. Google and others got to be where they are by doing the one thing that always works. Offering convenience and peace of mind. Nooo.. you don’t have to pay for this (right now), nooo.. you don’t have to wait for this (right now), noo.. you don’t need a strong foundation or to do things all the way. Pay for a little ad time, just a link here and there, give us pennies on every this and that, and it will be easy. Everyone’s doing it. Seriously, all you people out there complaining about how they do business. Ask yourselves why you went with them to begin with. You’re probably the same jerks that didn’t get the hint that smoking shortens your life. Or that you’re somehow immune. That you’re smarter than everyone else. You’re different somehow. Or you just don’t care RIGHT NOW. Ask yourself why you first went with google and why you first started smoking. And if you say anything other than “because other people were doing it” you’re a liar and a coward. Like a previous poster said, stop piggy-backing off of people, ideas and agendas to forward your cause. Because in the end, you’re a small peon and others have thought out their moves far ahead of yours. That’s why it was their idea. Do your own thing. That’s innovation. And for god’s sake, quit crying. Remember that the company you try to regulate today might be your regulated company in the future.
Word. I’m out.
That’s one terrifying wall of text you’ve constructed there. It might even be a TC record.
Gentle hint: Paragraphs are free, use them.
haha, you’re right. sorry I’m used to seeing my finished writing jammed together. a lot of the articles that I’d respond to don’t seem to accept paragraph form so I tend to forget about it. but you’re right!
Google provides a free blogging platform called blogger, you should check it out.
Nicely said! It’s funny b/c the anti-trust people say, essentially, that free things are bad! (e.g. youtube, google search, gmail, etc.)
The market descriptions given by the writer above are accurate descriptions of marketplaces but did properly apply how AT law works. I actually studied antitrust.
Anti-trust law has had a very hard time dealing with tech.
There are a variety of laws and cases that could be used to support an antitrust action against GOOG. As the Microsoft case shows, the government’s ability to win is the issue.
Google’s monopoly efforts seem to extend to these areas:
Search- they have 60% + of the market, arguably they have monopoly power.
Adwords- they have 80% and more of this market. The legal theory must rest on the notion that Google’s leadership in search let’s them dominate adwords and prevents anyone else from breaking in. This argument failed with Windows and MS Office. The other analysis, and where Goog would have problems is the assertion that adsense is an attempt to monopolize.
Data Aggregation- Google has assimilated terrabytes of data, some is data they probably should not even be allowed to have (user surfing habits, the ability to track what people are searching etc.); then there is all the data pulled in to reader, books and patents etc. Users benefit from having access to it all but at the price of Goog controlling it.
Then there are the free applications used to tie users to Google and prevent entrants to the marketplace.
Lastly, but this is years down the pike, Google looks like they are going to create an BrowserOS as a wireless machine that bypasses Microsoft and the desktop and takes you right to them. Given how less relevant your desktop hard drive becomes, and Goog’s willingness to store everyone’s data (for “free”), this seems to be their conquer the world scenario. It may just work too.
Predatory pricing does not apply to Goog but they are exhibiting the early signs of classic monopolistic pricing: they charge as high a price as they can but not high enough to allow competitive entry into the market.
US Anti-trust law has not had a major enforcement success in 25 years; the ATT case was their last successful major enforcement. The law is stale, has little applicability to modern business, especially the technology business (home of the 80-20 rule) and is all but impossible to enforce effectively in its current form (by the time MS antitrust travails were over, Google was becoming a force to be reckoned with).
I have come to believe that Orwell’s nightmare (I wrote the Cliff Notes on 1984) will come from corporations not government. Google is already more powerful than all but a few governments in this world. Sadly, and to their utter discredit, they arrogantly abuse their power shamelessly.
Given Larry and Sergey’s Obama connections, I doubt the US G that drops the hammer on Goog: the good news bad news is the EU hates two things in this world, successful businesses and American businesses, sooner or later the EU will declare Goog guilty of success and injure Goog in the same way they convicted Microsoft of the crime of existing.
The danger of monopolies come when they get established a time of little market innovation, then monopoly power becomes tyranny.
Couple of disclaimers- I am currently in litigation against Google, I haven’t cracked a book on antitrust in 20 years and all of what I laid out above is opinion without a detailed research of the current state of the law.
The cross-subsidy and refusal to deal are the worst in the 21-st century. It’s less about pricing in the tech world it’s more about exercising a monopolistic power against the companies entering the market in these two ways.
Folks it all comes down to property rights and anyone who doesn’t understand the concept of property rights must be daft. This short description of right to property is shown in the following 2 links:
Consumer Rights : Who decides What Goes into Windows?
Forget about what the law says, because there are tons of sections and clauses in the law that violate property rights and anti-trust is one of those.
Google crybaby when someone took them to court (a few years ago), when they de-listed that company from its search database on the grounds that search database is their own (ie, its own property), which Google was 100% correct there, but now they turned around and do the opposite by crybabying to the EU, saying that Microsoft dominate the browser market because of its dominant position (or monopoly).
Google, who owns Windows? Consumer or the rightful owner which is Microsoft? I bet you know the answer, so just stop moaning and start competing.
How is the downloaded and stored content of millions of pages ‘their own’, may I ask? Nobody even licensed it to them. The fact that people DO NOT even have a robots file can not be considered a consent for another company to grab the content, display it to the users and PROFIT off it.
Oh! They are making it for the ‘public good’, which is a result of ‘don’t be evil’ motto of course. Forgot about that. Donate the proceedings to the content owners then.
Alex said…
How is the downloaded and stored content of millions of pages ‘their own’, may I ask?
Daft argument. It costs Google millions to do that exactly. They developed a product by paying humans to do those tasks. The content pages indexes are their own, if you argue otherwise, then there is no point in me arguing with you because your reasoning is not sophisticated. When you put your rubbish out to the road for collectors to collect, you have no claim over it after its gone, if an entrepreneur would pay some other people to collect them, then what’s being collected belongs to the entrepreneur. Try putting something valuable in your rubbish bag and try to claim after its being collected by the collectors. Legally, you have no rights about those, if they’re nice they will give it back to you, but if they don’t , then they can charge you a fee to get it back.
Your content is in the public domain (note, that doesn’t mean that one violates others copyrights by stealing those contents), but the definition it is public, it means anyone can collect analytics about those contents and that is exactly what Google is doing. The analytics (Google page ranking indexing) belongs solely to Google. If you collect analytics about consumer indexes or other similar analytics, where those who are doing this do sell these informations to other interested parties, such as economists or financial analysts, etc. The analytics belong to the those who compile the info and not those retailers where the info originated from.
Google makes 98% of its revenue through PPC search. The company does *not* set these prices, save the minimum price. It is an auction-based system where market participants set the price. So tell me again how Google is charging “high fees”? This is clearly not the same as Microsoft charging for a copy of Windows or AT&T charging for communications services. The beauty of this auction-based system is that if keyword buyers are not profiting from this kind of marketing spend, then they will lower their bids or end their participation which puts downward pressure on pricing. The inverse is of course also true. But this is not in Google’s control. It’s a market driven self-correcting system. The DOJ could not reasonably prove Google is abusing its market power.
98% from PPC? I thought AdSense would give at least more than 2%, especially since it’s deployed across Google’s own services, and a couple of million other sites too.
1. It would be difficult to prove that paid results are superior to organic results. The last I heard less than 25% of people click on AdWord search results which could infer the paid results are inferior and they inferior since they’re hardly objective in the order they appear.
2. When businesses assess in their advertising and marketing budgets how much they will allocate to Google they are comparing with other advertising channels. Google sells advertising and it most certainly does not have a monopoly on advertising. Even people on here complaining talk about Google’s “ad price’s”. Google simply doesn’t have a monopoly on ads.
Here is the second link that I forgot post in my previous message:
Drop the Antitrust Case Against Microsoft
Anti-trust law is unconstitutional and must be killed immediately because it is a violation of property rights.
Er! but some might argue that innovations might be stifled by monopolists, yes that’s true but not the sort of innovations that is piggybacking on someone else’s property. You can innovate using your own property.
Also, some might still argue, that the consumers are the losers. Nope! See the link in my previous message (”Consumer Rights : Who decides What Goes into Windows?”), in that consumers don’t have rights to what is not available to them, ie, no one has a right to demand a producer to produce a product that the producer doesn’t want to produce.
Google understands property rights but chose to have a go at Microsoft by backing the EU in its anti-trust case, WHY? Google won in court against SearchKing for the same reasons, Google understood that they can do whatever they like with their search engine and search database (it is their properties and they have legitimate rights to those), even de-listing those companies who are doing web-farming, is no violation of anything at all.
Look at Canada and Mexico where people like Carlos Slim and Rogers run the government along with cartels and notably the Italian mafia up north.
Is that what you want America to turn into?
http://www.thom...le-data-access/
Does this look good to you?
If you had to live there you would be kicking and screaming to leave like the rest of the people that live there.
Then we have to spend massive amounts of public money to put huge walls and fences up.
Don’t forget guard towers!
Chris said…
Look at Canada and Mexico where people like Carlos Slim and Rogers run the government along with cartels and notably the Italian mafia up north.
Is that what you want America to turn into?
Chris, you’re still giving straw argument like a layman here, you’re not arguing with any objective at all, just rubbish.
How on earth is Carlos Slim running the government like a mafia? Does he hold a gun to Mexican government official’s foreheads and force them against their will ? Jesus, this is bloody idiot example you’re bringing up here.
Here is a quote from that blog post, you linked to:
Quote:
The motto of the CRTC, Canada’s telcom regulator is “Communications in the Public Interest”. Right.
And tell me, what bloody public interests over what I own? Do I have a public interest over your house? Can you subject your house for the public interest to decide what color that you’re allowed to paint it with? What you choose to do to your own property is none of anyone’s business but yourself (ie, the rightful owners). What is yours is yours and what is mine is mine. How difficult for you to understand that?
I can’t believe you guys are spending so much time discussing Google. Like I have said before, and I’ll say it again, Google will become irrelevant… fact, the internet as we know it will become irrelevant once we launch http://www.YourNight.com, an gigantic interactive portal that merges the internet with HDTV and provides every business in the world and every person in the world a web prescence. For more information, see an article with 127 comments about us on Techcrunch at: http://www.tech...…..g-on-gold/
RJ Garbowicz
Founder, Chairman, CEO, President
Extreme Enterprises International HQ
SpamspamSPAM. We got you the first time, dude.
Don’t know what your talking about. There is not first time, and there certainly won’t be a last time because we do not spam.
I wonder who guest author is. Very well thought out. More than a typical blog post. Insightful. I can’t imagine the current DOJ (under Obama) going after Google though.
The only thing I’m surprised at is that they can auction your trademarked company name. So if you start a business say called WingNAPrayer someone can bid it up out of your range. They’ve been sued over this and lost in France but they haven’t lost here yet. That would be a lot of revenue down the drain I’d guess.
I think there’s a couple new Google rules against that now. If you can prove to the powers that be that you own rights to the trademark, they can lock those keywords out of everyone else’s accounts.
I can’t create any keywords containing “ESPN”, for instance, and that’s not just because I’m allergic to sport.
I’ve never read so many stupid arguments before. If you dislike google so much, use another fucking service. Google is not the only search engine.
It’s not like google has bought out every
search engine right and left.
1 year later
http://www.powerset.com/
You can STILL only search wikipedia.
I just thought I would throw that in because it’s LOL funnay.
BTW, the only serious comment I made on this thread was the one about not becoming like Mexico or Canada. Nice to visit, a nightmare to live and work in.
Canadians are scared of coming to America. If they had a mirror they would be 10 times as scared of themselves. Monopolies are allowed to pray on the weak freely in both of our neighbors.
many corporations here happily do the same and go unhindered. You can say any company is a monopoly if it hinders your business. And reading about the DOJ and the antitrust suit, triggers a part of my hypo-manic mind to assume Microsoft somehow played a role. (Kinda how they are attacking Linux now).
The truth, google has done a great deal of innovation in many areas. Remember we would still be with the dinosaurs (microsoft) trying to find something for maybe a half hour before we come to anything usefull. Face it, search was hunt and peck back then, thanks to google its different.
Google supports Mozilla, F/OSS, among other things.And even now Google continues.
Microsoft on the other hand seems to be doing DRM, law suits, and hindering innovation.
If any body wants to go back to the dinosaur era be my guest. But be aware we will be in a far worse postion. DRM up the ass, privacy completely compromised, etc….
So rather than bear with Microsoft. Im going to support Google
“(Kinda how they are attacking Linux now).”
Microsoft has always attacked Linux since it’s inception on Minix newsgroups in 1993.
get the facts, Marin Taylor. The 86+ Million to baystar for SCO.
news.cnet.com/2100-7344-5170181.html
The list goes on and on and on. This attack on Tomtom is just another in a laundry list.
Microsoft has already been tagged by the DOJ. Google has not. Microsoft and Bill Gates had partially funded GW Bush’s run for the presidency in 2000/2004. Subsequently when Janet Reno left they came to a settlement.
The point is that at least companies are afraid of antitrust legislation in the US and that causes them to try to at least appear to not crush the competition. Remember when MS gave Apple 150M ??
http://news.cne...001-202143.html
It would have looked bad otherwise.
So in Canada, Microsoft would do no such thing. Sure they may pay off a person or 2 for some contracts, or fund some “lobbying” but it’s never to the people. Only to the minister of public works and a small hand full of people.
digg.com/microsoft/MSFT_asking_you_to_write_leters_opposing_California_A_B_1668_Open_Document
In Canada MSFT doesn’t even need to do this. They just need to buy the right person in Gatineau a new caddy.
That’s the difference. That’s why Google must at least try to appear to be competitive in our country.
If Rogers was here in the US, they would be split up. Oh wait, they were split up here.
The MSFT digg link runs off the page because of layout overflow being set to to cut off.
http://digg.com...8_Open_Document
Chris said…
Microsoft has already been tagged by the DOJ. Google has not. Microsoft and Bill Gates had partially funded GW Bush’s run for the presidency in 2000/2004. Subsequently when Janet Reno left they came to a settlement.
Chris, you don’t seem to get it, do you? Microsoft’s donation to Bush’s campaign is of no relevance at all to the issue of property rights. Microsoft give voluntarily to whoever they like to give to. They were not forced to donate, end of story.
Chris said…
The point is that at least companies are afraid of antitrust legislation in the US and that causes them to try to at least appear to not crush the competition.
Again, read the bloody link that I pointed out in my previous message (”Drop the Antitrust Case Against Microsoft”). There is a difference between voluntary action of consumers in choosing to buy what services or goods they like, and coercive action by force, that the consumers are forced with a gun to buy certain services.
Do you get the difference now? If you don’t then I suggest that you grab a book in the domain of objectivism and read the concepts about legitimate rights to ones own property, which is objective and the violations of those rights via government coerced actions (ie, anti-trust) is unjust.
“There is a difference between voluntary action of consumers in choosing to buy what services or goods they like, and coercive action by force, that the consumers are forced with a gun to buy certain services.”
Socialist governments make the same argument about taxing gas and GST.
Food isn’t taxed, and why should poor people drive anyway?
Perhaps you should go stick a maple leaf in your hat and go live your dream.
People in the last 15 years didn’t have much choice but to use Windows if they bought a computer. When Apple started failing, Microsoft invested 150 million just to keep them from going out of business so the American government wouldn’t split them up.
You should see what they do in countries where the people don’t have a spine. Get a clue.
Chris said…
People in the last 15 years didn’t have much choice but to use Windows if they bought a computer.
Chris, again you haven’t read the link I posted about Consumer Rights : Who decides What Goes into Windows?
Wrong Chris, the choice for a consumer is not to buy a computer at all. Consumers don’t have rights, you should get that over your head. How hard for you to understand that? Microsoft is not forcing consumers with a gun, to buy a computer with Windows operating system.
There is no obligation for Microsoft to provide a product that it wishes not to produce. Imagine how many consumers over that last 15 years who would have wanted many things with a computer but not yet available? Can Microsoft be forced to develop those products at a massive cost that dont’ get a good return on their investment over time?
What if Microsoft decides to pull windows out of the market and then decided they’re going to support linux? Think about it carefully.
Google do KILL a lot of industries with pseudo-free (e.g. analytics, maps, charts) … which is both ok and not ok, I guess.
One could argue that they simply have a superior business model. One could also argue that they’re benefiting from a monopolistic position in search / advertising.
One thing is sure. It’s almost impossible trying to compete with FREE Google products … and why is that? Cause Google’s products are not only free they’re in most cases totally awesome as well.
If quality products can be provided for free, Google still makes payroll, and the shareholders see some profits everyone benefits.
Actually, if life were that easy we would not have a Department of Commerce or a Sherman Anti-Trust Act. If everything were provided free Google would go bankrupt and no one would win. The question is simply what they are doing that is not free and if they are over-charging for it and if you are ending up paying for their over-charges without even knowing it. If the argument were as simple as free is bad (which of course it is not; I agree with you on that!) I could have saved about 1950 words.
Is there a viable reason why products like Analytics shouldn’t be free?
I only ask this because Nielsen (I think it was, could have been someone else) rated Analytics at the bottom of the chart when it comes to web analytics solutions.
Paid solutions kick serious butt. Ever heard of Omniture?
The major difference between a free Google service and an elsewhere-paid service is that the latter needs to generate revenue from their offering, while Google only has to generate traffic.
First give everything for free, make people get addicted to them, voila then start to charge them
The rule of the marketing… I do not know if Google follows such a way, but i think if they do, many will have to surrender… Hope it will not happen.
Bait-and-switch? That’s what it’s called, and while it does occasionally work, the stink and negative press it generates isn’t worth it.
No, I think AdWords is all G’s sticking with for now. They tried selling Urchin, but apparently it was a failure – Analytics has since superseded it in features and support.
Oh, and they also bought DoubleClick, and are moving to make that technology free, too.