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Google Hires former Bush and Hill Official to Lobby for its Merger

As part of its lobbying effort to secure FTC approval of its dramatic expansion, Google has hired a former Deputy Assistant Attorney-General for the Antitrust Division. Makan Delrahim, who served at the DoJ from 2003-2005, helped oversee the DoJ’s work work with international antitrust agencies. Among his duties was to chair “the Merger Working Group of the International Competition Network, the recently created virtual network of antitrust enforcers to develop better global coordination and cooperation of competition law enforcement.” Mr. Delrahim’s also worked as Chief Counsel for the Senate Judiciary Committee under Sen. Orin Hatch. One assumes Google wants to use Mr. Delrahim’s contacts at the FTC and at the European Commission to head-off what should be serious opposition to its take-over of Doubleclick. According to press reports, the new lobbyist has, of course, no qualms about the deal. Bloomberg reports Mr. Delrahim said that “[U]ltimately this is a very robust, dynamic industry. The combination of the two companies will only help create a more efficient system for the online advertising world.” Mr. Delrahim is now in private practice at Brownstein Hyatt Farber Schreck.


We have reached a crucial transition period for digital communications and commerce in what should be a global democratic era. It’s too convenient a rationalization to claim that because your mission is to “organize the world’s information and make it universally accessible and useful” you can ignore concerns about user data protection, consumer autonomy, competition, and related civil society issues.

Google Data on Users Increasing, notes its May 2007 SEC 10 QA

As we consider the various data sets Google now has, in the light of its expansion via the Doubleclick acquisition, it’s useful to reflect on a statement from its May 10, 2007 10 Q filing. The key excerpt, in our opinion, is its discussion on “privacy concerns” and its business (my bold): “In addition, as nearly all of our products and services are web based, the amount of data we store for our users on our servers (including personal information) has been increasing.”

As increasingly with Google, more is unsaid about what the real issues are than stated candidly. Here’s the complete section from the SEC filing regarding privacy: “Privacy concerns relating to our technology could damage our reputation and deter current and potential users from using our products and services.

From time to time, concerns have been expressed about whether our products and services compromise the privacy of users and others. Concerns about our practices with regard to the collection, use, disclosure or security of personal information or other privacy-related matters, even if unfounded, could damage our reputation and operating results. While we strive to comply with all applicable data protection laws and regulations, as well as our own posted privacy policies, any failure or perceived failure to comply may result in proceedings or actions against us by government entities or others, which could potentially have an adverse affect on our business.

In addition, as nearly all of our products and services are web based, the amount of data we store for our users on our servers (including personal information) has been increasing. Any systems failure or compromise of our security that results in the release of our users’ data could seriously limit the adoption of our products and services as well as harm our reputation and brand and, therefore, our business. We may also need to expend significant resources to protect against security breaches. The risk that these types of events could seriously harm our business is likely to increase as we expand the number of web based products and services we offer as well as increase the number of countries where we operate.

A large number of legislative proposals pending before the United States Congress, various state legislative bodies and foreign governments concern data protection. In addition, the interpretation and application of data protection laws in Europe and elsewhere are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have a material effect on our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. ”

GOOGLE INC. (GOOG) 10-Q/A filed 5/10/2007

Use of Cookies for Data Collection & Tracking on Rise

Former FTC Commissioner Christine Varney (now with Hogan & Hartson) and Alan Chapell (President, Chapell & Associates) were interviewed for this Marketing Sherpa piece on privacy and data collection. The headline, we believe, from the piece is that “merchants are collecting anonymous cookie data at an increasing rate in five out of seven retail categories this year compared to 2006, according to recent MarketingSherpa data.” [my bold]

Vaney’s perspectives in the piece are worth running here: “The biggest difference today is marketers’ ability to deliver targeted behavioral ads to consumers without collecting personally identifiable information, says Christine Varney, who served as a Federal Trade Commission in the Clinton administration and is now a Partner with Hogan & Hartson, where she counsels brands, such as eBay, MySpace, Zango, DoubleClick and AOL.

“You need to deliver targeted ads in a privacy-friendly matter,” says Varney. “The good news is that marketers are getting smarter about their tactics. The bad news is that people are still screwing up and not being as straightforward as they need to be about what information they are collecting.”

The Online Data Collection & Targeting Economy: Price Increases Will Affect Reach and Content Diversity

We suggest that the Google takeover of Doubleclick, Microsoft’s aQuantive deal, and related acquisitions will have important ramifications to competition and civil society. Powerful business economics will shape the online medium (mobile, PC, IPTV), potentially diminishing content diversity. We are especially concerned about the future of political campaigns, as one’s ability to access voters and inform the public will be determined–as with TV today–but one’s deep pocketbook. So we find this quote from a Wharton economics professor of interest: “Xavier Drèze, a marketing professor at Wharton, suggests that online advertising prices could increase due to better targeting. “The more targeted the ads, the more valuable they are.”

The Wharton piece goes on, citing a recent report by Susquehanna Financial Group analyst Marianne Wolk.

“Behavioral targeting makes inventory available for sale based on the value of a web site’s audience, generally outstripping the value of the content on a page,” Wolk writes. “Behavioral advertising enables marketers to reach beyond keywords and impressions to the audience segments behind them.”

The Wharton article explains that “[]If Wolk’s assessment plays out, advertisers are likely to have a variety of media to spur behavior. For instance, a television ad could elicit an emotional response from a consumer that then prompts him or her to do a search and ultimately make a purchase. The big difference in the brave new world of advertising is that all of these moves would be tracked.

Drive that Behavioral Targeting, As Microsoft Acquires aQuantive

One of the features Microsoft is acquiring in its aQuantive purchase is Drive PM. They plan to use DrivePM to add targeting functionality to its ad network business. This will further the role that behavioral targeting plays with Microsoft and others. Here’s an excerpt from its website:

“For any online targeting service to be “worth its salt,” it must be able to target on multiple relevant variables. DRIVE has gathered an impressive list of targeting variables to which it is continually adding, which include:

    • Behavioral variables:
      • Client site visits/conversions
      • Email/newsletter list membership
      • User interest category (new!)
    • Demographic/psychographic variables:
      • Geography
      • Prizmâ„¢ Cluster
      • Day part/day of week
      • Gender
      • At work/at home
    • “Technical” variables:
      • Connection speed
      • Browser/OS
      • ISP/domain”

Important to Understand How New Media Merger Deals Reflecting Changing Nature of Search, Ads, and Data Collection

We think this excerpt from Advertising Age [sub. required] on Microsoft’s recent summit for marketers illustrates where search engines are headed (and how it reflects the converging search, rich media, video and display ad markets):

“You’re in a Microsoft Windows’ Live search-results page after querying “Land Rover,” you mouse over an icon next to the sponsored results and suddenly you’re careening into what in another more offline world would be called a glossy print ad or a detailed brochure.

Want to see the fine print? Just scroll in deeper. Want to see what radio station the car’s audio system is tuned to? Zoom in infinitely until you can read the micro call letters on the stereo display. This technology is called Seadragon and will allow advertisers to push tons of extra data and images to searchers, a big improvement over today’s unsophisticated text ads.”

From: “MSN’s Online-Ad Plan: Let the Web Evolve.” Abbey Klaasen. Advertising Age. May 11, 2007

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Microsoft’s Expanding Data Reach: We Will Know You

excerpt from New Scientist, May 16, 2007: “IF YOU thought you could protect your privacy on the web by lying about your personal details, think again. In online communities at least, entering fake details such as a bogus name or age may no longer prevent others from working out exactly who you are.

That is the spectre raised by new research conducted by Microsoft. The computing giant is developing software that could accurately guess your name, age, gender and potentially even your location, by analysing telltale patterns in your web browsing history… Previous studies show there are strong correlations between the sites that people visit and their personal characteristics, says software engineer Jian Hu from Microsoft’s research lab in Beijing, China…
Hu’s colleague Hua-Jun Zeng says the software could get its raw information from a number of sources, including a new type of “cookie” program that records the pages visited. Alternatively, it could use your PC’s own cache of web pages, or proxy servers could maintain records of sites visited. So far it can only guess gender and age with any accuracy, but the team say they expect to be able to “refine the profiles which contain bogus demographic information”, and one day predict your occupation, level of qualifications, and perhaps your location. “Because of its hierarchical structure – language, country, region, city – we may need to design algorithms to better discriminate between user locations,” Zeng says.”

“New software can identify you from your online habits.” Paul Marks. New Scientist.  May 16, 2007

Google and Feedburner: Building the Data Profile

One of the responsibilities of this blog is to track and highlight for the public the interactive ad business, especially its impact on privacy and civil society. As part of its online ad industry consolidation drive, Google may soon acquire Feedburner. Feedburner says it’s “the leading provider of media distribution and audience engagement services for blogs and RSS feeds…FeedBurner also offers the largest feed and blog advertising network…” Here’s the kind of user data Google may soon reap, according to Online Media Daily (my italics):

“Adding Feedburner to its portfolio would give Google a number of gains. The ability to roll tracking statistics on Feedburner’s reported total of more than 720,000 feeds into Google Analytics is the most obvious, as the business of online advertising increasingly gets driven by trailing and deciphering user behavior. “Google’s Analytics suite will definitely benefit over time through this acquisition,” said Brough. [vice president and search director, DraftFCB]

And while the deal may also speed up widespread integration of AdSense ads into RSS feeds (an option currently available to select advertisers during closed beta testing), its implications for personalized search may be more valuable. Should Google decide to combine knowledge of a user’s subscribed feeds with its wealth of corresponding behavioral data, the company will be able to further target both search and advertising capabilities.”

Source: “Google’s Feedburner Grab Would Impact Personalized Search, Analytics.” Tameka Lee. Online Media Daily. May 25, 2007.

Is The Open Internet Coalition About A Real Democratic Net–or One Safe for Data Collection and Interactive Advertising?

A note of caution about the Open Internet Coalition, which is working on network neutrality issues. Beyond neutrality, we need a broadband medium which fosters privacy, promotes civic engagement and–especially–an online culture where commercialism isn’t the foremost value. We are uneasy about the alliance between public interest groups and Open Internet Coalition members such as Google and Interactive Corp. (Ask.com). Google’s proposed merger with Doubleclick, as well as the unprecendented series of other new media mergers, raise critical questions about the democratic nature of the online medium. Public interest groups should not be seeking a quick fix for digital communications, such as the Open Internet Coalition. Indeed, without rules governing Google’s expansion, limits on data collection, a strong legal framework for privacy, and policies promoting meaningful open non-commercial civic space, the Internet will be “open” in name only. The Google’s, Yahoo!’s, IAC’s, Microsoft’s, etc. will be working with the phone and cable broadband monopolists on a playing field which still unfairly favors the giants. It will be “open Internet” really operated by the digital denizens working the global Madison Avenue beat. Yes, network neutrality is important to fight for. But it’s just a piece of what should be a meaningful public interest agenda.

Behavioral Targeting Comes to Online Display Ads

We have been telling regulators and others, in discussing GoogleClick, YahooRight, and MicroaQuantive, that the danger in terms of privacy (and competition) is connected to the ability to collect user data & target via the converging search and broadband video market. We think this excerpt from today’s Online Media Daily illustrates what’s here:

“The future of online marketing lies in making graphical display ads and video perform as effectively for marketers as search marketing has. And the key to that is data.

If you’re looking for a marketplace that works–search is the best model to look at. Marketers are essentially bidding on “data”–in this case keyword data–to create an economic marketplace that ties them together with consumers.

Every time you search, you’re telling marketers exactly what you’re interested in at that very moment. That’s why search ads are so targeted and perform so well. What many people don’t realize is that by merging behavioral and other data sets with real time analytics and sophisticated targeting, we can now achieve that same level of performance with display ads…
For the handful of “next-generation,” targeted ad networks capable of adding this type of value to inventory, it means we hold the keys to a market that’s potentially five times the size of the search market, measured by total available ad impressions.”

from: Online Advertising Future: Automation or Data? Gurbaksh Chahal. May 24, 2007.