A Kinder, Softer Google?

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Anyone who has ever dealt with Google knows what a ruthless, relentless competitor they are. If you don’t like their way, you can go pound and…”We are Google, dammit!” So it was a little surprising to see a new, fluffy Google attempting to make love not war with the EU newspaper industry.

Remember newspapers? In the EU, there has been a growing clamor against all things Google led in part, at least, by the rich and powerful newspaper groups. Though they are considerably less rich and powerful owing to the thrashing their industry has taken in the last couple of decades, they still have a loud voice in Europe. Massive cross media conglomerates, like Axel Springer and NewsCorp, still carry a big stick and have been in a standoff with Google for a while.

Google has just announced a new “Digital Initiative” with a group of major EU publishers. They have pledged about $170 million over three years to help newspapers grow their digital products and revenues. Given the insane amounts of money Google has thrown at projects like Nest and Glass, the amount seems a little patronizing, if not insulting. But it’s better than nothing and it’s better than being at war with the major EU news publishers.

In a kerfuffle I documented in this very blog a few months back, the Spanish government passed a law that essentially required Google to pay to include snippets culled from Spanish news sites in their search results. In response, Google shut down their Spanish news site entirely (a very Google move, BTW). That led to the implosion of many news sites who lost most of their search referral traffic. Both parties backed away from the mess, and this uneasy, somewhat patronizing initiative seems to be the result.

What’s really happening here is that Google is trying to narrow the number of concurrent battles they’re waging in Europe. The EU competition commissioner is leading a pretty strong assault on Google for what looks to be a very tightly-defined accusation of anti-competitive behavior. Indeed, there are some in the EU lobbying for a “Google Tax” on all things Google.  That would be a problem, as would a $2Bn monopoly-based fine. Having the very vocal news industry editorializing about how evil Google is won’t help that cause. I’m sure Google is hoping that the digital bone they have thrown the EU news hounds will keep them quiet for a while.

It Just Got Real in the EU

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It’s fair to say that a good number of folk in Europe just hate Google.

I was selling search to European web sites and portals back in the early 2000s. As I recall, we charged 65c per thousand queries answered. Back then, there was an upstart search company called Google that was powering Yahoo and had a web site with no ads on it. My then company was doing really well at selling search; so well, in fact, that Yahoo bought them for something over $100MM. Then Google came up with a new and remarkable sales strategy: they started giving search away for free. In addition, they said that they would pay the portals if they could run ads on their results pages. As you can imagine, it was a pretty successful offer.

I clearly remember having conversations with clients along the lines of, “If you go with Google, it will be cheaper initially. But people will quickly realize that they are behind your search, and they will go to Google directly. Their site is extremely fast and doesn’t have all those horrible, slow-to-load ads you slather all over your site.” My words fell on deaf ears, and now Google controls over 90% of the entire European market.

 

It’s this over-arching monopoly that sticks in the craw of many EU legislators, and they have been firing warning shots over Google’s bow for several years. Absent of a settlement, the EU ministers have now filed suit against Google for monopoly practices. To the American observer, this looks like something between sour grapes and silliness. If you don’t like Google, then use something else.

The suit alleges that Google favors its own shopping results over those of competitors. The EU has limited the scope of the argument to just that— partly because it’s blindingly clear that is exactly what Google is doing and partly to get the case done quickly. Europe takes a dim view of monopolistic behavior. Dominant companies have a duty to ensure that they don’t exploit their positions.

Google is a voracious competitor, entirely not the goofy-friendly company they try to position themselves as in the US. Their argument that the Internet is a big place and nobody forces you to use Google might seem fair enough to an American viewer, but likely won’t cut it in Europe.

If this goes all the way and Google loses, the company will likely find itself on the wrong side of a fine for six billion dollars (or more). Beyond just the fiscal pain, they will also likely have to make significant concessions to avoid further cases. Google hates that kind of situation. When the Spanish government tried to force Google to pay for news stories they indexed from newspaper sites, they shut down the Spanish news search entirely. It will be interesting to see where this ends up.

Meet the New Boss…Same as the Old Boss

Search at Yahoo has languished somewhat since Bing took over their search back in 2008 after a failed bid by Microsoft to buy Yahoo. There has always been an antitrust concern about the search on Yahoo being powered by Google…so I was interested but not that surprised to read today that Google contextual ads will now start showing up on Yahoo properties and more importantly Yahoo mobile traffic. To be clear this isn’t the same as main search on Yahoo being taken over by Google, rather these are contextual AdSense ads displayed on billions of Yahoo web and mobile pages…which will presumably represent a significant revenue opportunity for Yahoo.  It makes perfect sense as Google’s ads are generally more valuable than Yahoos and they have a larger stack of advertisers to play with. At the core of the deal is the dramatic growth of mobile. Millions of people use Yahoo mobile content to keep them up to date with news, celebrity, finance sports and email. Google has a much stronger mobile platform so adding Google mobile ads to the enormous Yahoo mobile inventory. Google doesn’t (yet) have the kind of vertical interest Yahoo boasts so that’s likely to be an upside for them both.

Google survived an  FTC investigation into monopolistic practices last year and is still under scrutiny in the EU, so making a move which further centralizes Google commercial control could be thought of as ballsy.. but in a race to grab as much real-estate as possible before the new Search at Facebook gets out of short pants it makes perfect sense.

Christmas Comes a Little Early for Google

Last month I reported that the FTC would sometime soon be giving a ruling on Google’s alleged Monopolistic practices. At the time I said that legislating for a monopoly in a market as fluid as the current search space and

“I suggest the FTC strike a deal to the effect that Google will clearly label all advertising from any source and will undertake not to unfairly promote their own products above others….then let the market vote with its feet.”

From the reports getting leaked from the closing discussions it looks like I pretty much nailed it. The FTC won’t be ruling that Google is or isn’t a monopoly and in return Google will improve their labeling of other people content and make it easier to switch ad campaigns from Google to other competitors. That last component is a late addition which makes little real difference, anyone seriously involved in CPC marketing is already managing campaigns across multiple engines. There will also be some patent provisions in which they will not attempt to block mobile commerce with some of the patents they have recently acquired.

The one remaining fly in the festive punch bowl is (as always) the EU. The European equivalents of The FTC have a long track record of beating up on US companies which they regard as monopolistic and have been at war with Google for most of the last few years. They seriously impacted Microsoft (back when they were top dog). There is a serious possibility that Google will lose and may get some pretty Draconian limits imposed. Of course once the appeals process is all said and done even those sanctions may be out dated by the dash to mobile, the continued growth of search beyond the desktop Apple and Amazon and the next three trends which emerge at the speed of technology rather than the speed of the EU legal process.

Either way I feel reasonably smug.

Welcome to the Machine (It’s Sue, Eric and Bob)

As we all know search is fiendishly hard to do and is run by all seeing all knowing algorithms which are as close to deities as is reasonably possible given current limitations. It’s that dedication to anonymous selection which lets the search engines fend of constant assaults over censorship, monopoly and privacy such as they are experiencing in the EU and US currently. Yet as the recent Register.co.uk  story once again points out Google in facts has armies of part time out sourced workers whose task it is to rank results sets flagging the best as “vital” all the way down to “Porn” and “harmful.”  These QA folk certainly don’t build the algorithm and Google says they don’t drive relevance (in which case why bother at all if you don’t listen to the results?) but the smart money is on that they have some kind of impact.

Evidence of potential human intervention might be seen in the recent waves of algorithmic attack on thin or “over SEO’d” content frequently means that pages with next to no links at all do extremely well…the skeptical might suggest that at least to a point some level of human intervention is helping these high quality pages with almost no traditional search juice. We in search have known for a good while that a measurably large number of important search results are most likely either hand crafted or at least carefully vetted and guarded against assault by the over enthusiastic or unscrupulous.

So which is it?…or is it both?. If search is indeed heavily influenced by human editorial ‘opinion’ even in the form of rigorous QA some will argue that the search engines move from a legal safe harbor of hands off neutrality, to a place of suspicion and maybe corruption. As Google in particular acquires more sources of “answers” to compete with other content providers, and if there are many thousands of people focused on the  “best” end user experience isn’t there the possibility that “best” might even informally be conflated with the “in house” or “our” content. If that were true we’d have an interesting monopoly situation to pick through…exactly as the FTC is currently doing.

OMG….Google Looses Defamation Suit

This post is a little inside baseball but bear with me…the implications are potentially important. Google (and other search engines) have always defended themselves against accusations of defamation by claiming that they are algorithmically and innocently aggregating and passing along content which other people have come up with as search results. When I used to work for a search engine we used to maintain (as did others) that we would only respond to instructions from a court with valid jurisdiction to remove content. Simply filling a complaint would not get us to change the results as there would lie madness…with a potential for us to be deluged with complaints. In the relatively rare cases where we did receive instructions to remove specific content we were happy to comply.

So it was with some interest that I read that Google has just lost a case in Australia where they received a complaint correctly filled out about their image search which implied that someone who was not connected with the Oz underworld was in some way a gangster. The court felt that the defense that Google algorithmically generates results was reasonable until the problem was brought to their attention. What’s surprising and important is that the court felt that them receiving the complaint (as opposed to a court ruling)  and not acting on it n cases where that content is harmful or potentially defaming was in of its self harming. US law EU law is different to Australian. They won the case against the web results complaint on a technicality because the complainant wasn’t filled out correctly. Google is under attack in both jurisdictions on multiple fronts. It would only take a judge to see the logic of this case and rule in a similar way in the US or EU for all hell to break out…we will have to watch this space, this could be interesting.