Justice Department May Have Just Killed Yahoo; Google Drops Partnership

from the you-wanted-less-competition,-you-got-it dept

Well, apparently even the greatly scaled back version of their ad partnership wasn't enough to appease a Justice Department intent on suing Google for antitrust no matter what the real issues are. Google had previously threatened to kill the deal if the Justice Department didn't ease up on its position, so it really shouldn't come as a surprise to anyone that Google has now dropped out of the deal entirely.

The government is still insisting that it would have represented a monopoly, as around 90% of the "relevant market" would have been managed by one company. First of all, they were only looking at the search ad market, which is hardly the relevant market. Advertising budgets pay for much more than search ads, and if search ads really became more expensive, it would only open up opportunities for alternative means of advertising. Besides, there was still little to no indication that any such deal would increase advertising fees. Given Google's auction based system, and the fact that this would increase inventory, there's plenty of reason to believe it would actually decrease advertising costs.

In the end, killing off this deal may represent a pretty big blow to Yahoo's chances of moving forward as an independent concern. The company was very much relying on the Google deal to stabilize its financial condition. Without that, Yahoo is in trouble -- meaning there's probably a good chance that Microsoft takes another look at acquiring the company for much, much less than before. That means, Yahoo as we know it, disappears. Considering the Justice Department wanted more competition rather than less, it's unfortunate that it's misguided decision is effectively killing off one of the competitors.

Filed Under: antitrust, justice department
Companies: google, yahoo

Yahoo And Google Revise Deal To Try To Win Antitrust Approval

from the bargaining dept

With Yahoo and Google in the midst of a vast negotiation with the Justice Department to try to avoid an antitrust lawsuit over their proposed ad deal -- even to the point of Google threatening to back out entirely -- it shouldn't come as a surprise that they're going to propose various modifications to the deal.

The news today is leaking that the two companies are proposing a greatly scaled back version of the deal to see if it passes Justice Department muster. In this case, the deal would be shortened from 10 years to just two, and would limit how much revenue it could represent to Yahoo while also allowing any advertiser to opt out of the deal. We're still waiting for a clear explanation of how this deal will actually negatively impact consumers, but some people still insist it will. For those who believe so, let's ask a simple question: how is this any worse than Yahoo disappearing from the marketplace? Because if the company doesn't do something soon that may be what we're looking at.

Filed Under: antitrust
Companies: google, justice department, yahoo

California Schools Not Using $200 Million From The Microsoft Settlement

from the not-a-priority? dept

A few years back, in settling a civil lawsuit against Microsoft for its monopolistic practices, Microsoft agreed to pay out $250 million to California schools, in the form of vouchers. Now, there are some who might point out that this sort of "settlement" makes good business sense, in that many will use the vouchers on PCs with Microsoft software, thereby getting a new generation of kids hooked on Microsoft products (it's worth pointing out that the vouchers can be used on non-Microsoft software as well). However, that's hardly the biggest issue, apparently. Instead, people are realizing that the vast majority of the $250 million is not being used by the schools. Some are pointing out that their budgets are being slashed, and since they have to pay for the equipment upfront and then request money back later, it's just too much trouble. Others are saying it just hasn't been a priority, even though they know the money is available.

Filed Under: antitrust, california, schools, settlement
Companies: microsoft

Google And Yahoo May End Deal; Not Worth An Antitrust Lawsuit

from the ouch-for-yahoo dept

With various politicians pushing the Justice Department to slam Google on antitrust charges (it's worth noting, of course, that Rep. Joe Barton, who seems to be leading the anti-Google charge, just so happens to have received an awful lot of campaign money from AT&T -- Google's arch nemesis), it appears that Google and Yahoo's attempt to broker a deal with the Justice Department may be falling through.

Reports are coming out that the two companies are ready to announce that they're walking away from their planned deal. This actually represents a bad end result for almost everyone involved. Yahoo will be hurt the most by this, and the last thing Yahoo needs right now is more trouble. For Google it's a loss, but not a huge loss. Microsoft comes out of it happy (and will gleefully watch Yahoo's stock continue to slide). It's still unclear what actual harm it would do to the marketplace to have Google running ads on Yahoo, but since when is politics about reason?

Filed Under: advertising, antitrust, deals
Companies: google, justice department, yahoo

Google's Antitrust Problems Not Just In The US

from the google-rears-its-head dept

As Google not-so-eagerly awaits the US Justice Department's word on whether or not it's violating antitrust laws, it appears that the fear of Google-as-a-monopoly is not just a domestic US issue. There are a bunch of headlines about how Russia's antitrust agency has rejected Google's purchase of an ad agency in that country. Technically, the claim is that Google didn't file the proper paperwork, but the agency made it clear that it's worried about Google becoming monopolistic. Of course, as with the Google-Yahoo deal, it's unclear what the "monopoly" is that's being dealt with here or how people are harmed. It seems like this might just be a general "must fear Google" position, than anything based on an actual problem.

Filed Under: advertising, antitrust, russia
Companies: google

Google And Yahoo Negotiating With Justice Department Over Antitrust

from the trying-to-avoid-a-lawsuit dept

With the Justice Department making it clear that it wanted to go after Google for possible antitrust violations, it appears that Google has recognized the time isn't right to be defiant, but to get a seat at the negotiating table. The company, along with Yahoo, is apparently in talks with the Justice Department to see what it can do to avoid getting sued for antitrust violations. While it's obviously way too early to see whether or not this works, it must be better than waiting until the whole thing gets hashed out in court. It's still difficult to see what sort of antitrust violation there really is here, but that wouldn't stop the government from bringing a costly lawsuit if some sort of deal isn't worked out quickly.

Filed Under: antitrust, negotiating
Companies: google, yahoo

Judge Lets iPhone Antitrust Trial Move Forward

from the not-such-a-good-day-at-apple dept

Last year, we wrote about an antitrust lawsuit filed against Apple for sending an update that disabled, or "bricked," the iPhones of people who had changed the firmware to accept outside programs. While Apple tried to push for a dismissal of the lawsuit, a judge has denied the motion to dismiss and will let the case carry on. While a full-on antitrust finding seems unlikely, there are elements of the case that may get Apple into trouble down the road -- and it all comes back to Apple's Achilles' heel: its desire to control absolutely everything, even after you've bought it. Depending on how this case works out, Apple may discover that it (legally) needs to learn to loosen the strings a bit.

Filed Under: antitrust, bricking, control, iphone, lawsuits
Companies: apple

If The Google-Yahoo Deal Is Bad For Advertisers Or Publishers, Isn't That Just An Opportunity?

from the what's-the-problem? dept

I recognize that in times of financial crisis, it may seem more difficult than ever to imagine unique and innovative opportunities cropping up -- but it's often in such times that the most innovative businesses are formed. How quickly we forget, for instance, that Google's own business model was formed during the barren years following the last dot com bubble burst. Yet, for some reason, people seem to think that today's offerings are the be-all and end-all of innovation. That's why we get these articles worrying about how a Google-Yahoo ad deal will be bad for advertisers and publishers. Yet, there's little evidence to actually support that. The article linked above cites the easily disproved anecdote from the NY Times last month about one guy who had a spammy site that Google punished. That was the guy's own fault, not Google's.

But, really, the most important point ignored in most of these discussions is that if Google really does make ad prices higher and share less with its AdSense publisher partners, that would create a huge opportunity for others, whether large incumbents or small startups, to step into that breach. If I had to bet, I'd say that there are already companies working on solutions that are more interesting and more valuable than Google's advertising plays. There are companies who are recognizing that "advertising" is not necessarily the best model, and they're working on better solutions that won't even seem like advertising at all -- but will start to take advertising dollars away from traditional ad companies. Just as Microsoft couldn't see the threat of Google for many years, Google won't even notice these companies on its radar, and while everyone's fretting a Google "monopoly" in search ads, the next revolution will be bubbling up somewhere else entirely.

Filed Under: advertising, antitrust, monopolies, search
Companies: google, yahoo

We Should Be More Worried About Our ISPs Than Google When It Comes To Abuse

from the pay-attention dept

With the government gearing up to potentially go after Google for antitrust violations, we're seeing all sorts of press coverage of stories about how Google may be abusing its position, from supposedly hurting companies to potentially having too much insight into your web surfing activities. And, no one's gloating over this turn of events more than some of the broadband providers, who often find themselves at odds with Google over issues such as net neutrality, patent reform and other issues. Yet, as some new research is suggesting, it's odd that there's so much of a spotlight focused on Google, when those same ISPs are a much bigger privacy threat. They have a lot more visibility into our online activities, a lot more control over what users do, and (unlike Google) it's a lot more difficult to route around them. Plus, many have shown that they have no problems selling your private data -- sometimes without letting you know. So, why is all the attention focused on Google? If it's abusing our privacy, then it's easy to switch to a competitor. Broadband ISPs, on the other hand, have a lot more control and visibility -- and a much tighter grip on customers, usually with fewer competitive options. Yet, the government rolls over backwards to let these ISPs do what they want, while it prepares an antitrust lawsuit against Google?

Filed Under: abuse, antitrust, isps, privacy
Companies: google

Making Results Better For End Users Isn't Acting Like A Monopolist

from the and-again-and-again-and-again dept

With the Justice Department getting closer and closer to going after Google for supposed antitrust violation, we're going to see more and more articles like the one in the New York Times this weekend that tries to highlight the story of a company "harmed" by Google's market power. In this case, it's the story of a guy who runs a directory site that was based entirely on Google arbitrage. He bought ads on Google's search engine to drive people to his directory page, and then littered the page with AdSense to collect revenue from people clicking through. The NY Times presents this as being somewhat harmful, but I have to side with Jeff Jarvis who doesn't see what Google did wrong.

Google arbitrage sites are a problem for the end user. They're based on the simple concept of forcing people to go an extra click to siphon some money away. If I'm looking for a particular site on Google I don't first want to go to a directory -- I want to go directly to the site. That's true for many, many users -- and Google's efforts in punishing arbitrage sites isn't anticompetitive, it's about improving the user experience, which is something that should be praised, not sued. The only problem noticed in the scenario was that the guy chose a bad business model, where he was totally reliant on a single company for both all of his traffic and all of his revenue. He made the decision to base his entire business on a single supplier, and that supplier has every right to change the terms of its deals in an effort to make a better consumer experience. This isn't Google being anticompetitive -- it's Google serving its customers.

Filed Under: antitrust, arbitrage, monopoly, search results
Companies: google