Google is superbly good at defending its self from accusations of monopolistic or corrupt practices. A couple of years back, they underwent an FTC investigation and following a few minor negotiated concessions they were given a clean bill of health. The massive amounts of lobbying they do had nothing to do with the matter. The detailed findings were kept secret…’coz why would we the people get to see the results of an inquiry done on our behalf and paid for by us? Subsequently Google has continued to suffer monopolistic accusations fro the EU where a case is still grinding through the Central Court.
I can only imagine the language heard in the Google-Plex last week when the FTC ‘accidentally’ released the details of the Google case in response to a FOIA request about a different subject. The results weren’t particularly surprising but it’s telling that even though in half of the cases investigated FTC commissioners had “serious concerns” but those concerns did not rise to a case worthy of prosecution. I’m no fan of the FTC but it does look like they were leaning towards some form of retribution for bad behavior and they appear to have been pressured into backing down. It’s unlikely that the EU commissioners will be as easily convinced, but since Google has made the changes it has and given the fact that nobody ‘has’ to use search to live and breathe I doubt that they will get much more than a harsh tongue lashing from the Europeans. The recent debacle where the Spanish passed legislation to force Google to pay for the content it scrapes from Spanish news sites resulted in tons of Spanish content being kicked out of all Google results produced and triggered an immediate about face has probably weakened their hand even further.
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.
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.
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.
The clock is counting down on the FTCs two year investigation of Google. The government has spent a hefty chunk of our tax dollars to see whether Google is a monopoly which acts against the interests of the market. A horde of heavily biased search ‘also ran’ companies has lobbied to have Google either sued (probably the largest action since Microsoft in the 90’s) or reach a deal with Google which would in their minds level the playing field. Word is that most of the FTC favors moving ahead against Google….but I wander if that really would do any good.
It’s a tricky situation. Google is undoubtedly a monopoly, but if you didn’t have search life would go on…no babies in incubators would die. However they are the fulcrum of a huge amount of the new economy so to have them favor their own projects and harm the competition could be a problem. What I found rather distasteful was the spectacle of Silicon Valley Congress people writing to the FTC suggesting that they back their tanks off Google lawn lest their actions harm the economy….really? Google is now too big to sue?
Google is a monopoly in terms of overall search traffic and especially in terms of the crucial commercial search market. They are aggressive and unwavering in their pursuit of their interests….but this is America they are allowed to be. I long since gave up trying to keep up with the endless parade of “next Googles” in search. The short answer is the next Google might be Facebook…or Apple. Remember when Microsoft was an evil Monopoly…before browsers took so much of the desktop over…before Apple surged back and Google cornered search, before Microsoft got fat and lazy? There are serious threats to Google in the search world. If Facebook cuts a deal with Yahoo, Siri continues to grow, Amazon continues to establish mastery of shopping search and we continue our dash to mobile there will be ample opportunity for Google to step up or others to step in.
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.