Category: Yahoo!

excerpt from “Consolidation And The Shape of Online Publishing.” Online Media Daily

“With DoubleClick, Google not only bought an ad exchange opportunity, but the installed base of the two-pronged DART franchise – with its Publisher and Advertiser flavors. This move stretches the definition of the publisher role farther than ever before. Combining DART, an ad exchange, and Google’s heritage of advertiser direct creates a potentially frightening situation for agencies. Add to that Google’s entry to offline media, including TV, radio and print, and a rather sinister master plan begins to unfold.

The move is part of a trend toward giving the seller more power throughout the value chain. With 2006 revenues of $7.14 billion, Google already claims a quarter of the online ad revenue worldwide. Moving from search to display and the offline ad channels, it appears that Google is assembling the ultimate media one-stop-shop for advertisers – a Wal-Mart of Media, so to speak.

This gets even more intriguing when you consider why ad servers were developed initially: To manage and audit multiple advertisers… Now the auditor becomes the audited supplier.”

Amit Rahav. May 9, 2007

From AdWeek (excerpt): “Acquisitions last week by Yahoo and Microsoft are part of a wave of consolidations that industry insiders expect will eventually result in a handful of massive ad operating systems. The Internet giants, along with Google and other contenders, see an opportunity to get out in front of an expected flood of brand ad budgets online by offering one-stop systems to manage search, display, video and other campaign formats. These systems would fulfill a role similar to that of TV networks in the early days of broadcast, aggregating audiences that are spread across the Web, mobile and other channels. The Internet giants, along with Google and other contenders, see an opportunity to get out in front of an expected flood of brand ad budgets online by offering one-stop systems to manage search, display, video and other campaign formats…”There’s a bias toward big right now,” said David Kenny, CEO of Digitas, part of Publicis Groupe. “As large companies move to [Internet] brand advertising, video, mobile and social networking, scale matters…”
“We have a vision of a next-generation advertising platform,” said Joe Doran, general manager of Microsoft’s digital advertising solutions unit. “We think of this as one broad platform for all digital media.”
From: “The Big Just Got Bigger in Online Advertising.” Brian Morrissey. Ad Week. May 7, 2007.

At the recent Computers, Freedom and Privacy conference, I was on a panel about behavioral targeting organized by CDT. I was a last-minute panelist, placed on there by conference organizers who were uncomfortable about CDT’s plans for the event. CDT has blogged about the panel, suggesting much more needs to be known before the FTC acts. That’s hogwash. CDD and USPIRG have provided the FTC–and the public–with sufficient information for action. Clearly, CDT is playing its usual role helping the industry head-off any serious consequences for the systemic invasion of privacy which online marketing has unleashed.

Interestingly, at the event, lobbyists for several of the big data mining companies came up to me and asked what kinds of safeguards might work. They know that BT and what’s going on raises serious and disturbing issues related to privacy. That’s why privacy advocates have to really protect the public through policy safeguards asap.

PS: For CDT to suggest there was even a debate between the representative from the Interactive Advertising Bureau and myself does a disservice to readers. The IAB really could not offer any defense of the practice, except to say that without advertising most online content would no longer be “free.” As the lone privacy advocate on the panel, I provided examples–from industry documents–about how our privacy is threatened.

There’s no small irony that two of the programs targeted by children’s media advocates during the 1980’s for being commercials for toys–the Transformers and GI Joe–are to have their own channels on Joost. Clearly, both the FTC and the FCC [and Rep. Ed Markey] will need to examine this deal with Hasbro when it comes to data collection, inappropriate advertising, etc. But Joost surely can do better than this. The folks behind the company have been engaged in a certain amount of self-hype. But if all Joost’s co-founders Janus Friis and Niklas Zennstrom can give us are reruns which reflect a bottom line mentality, they seriously need to examine what their values are. Joost is promoted as combining “a TV viewing experience with the choice, control and flexibility of Web 2.0.” But with interactive channels promoting violent, toy-based products, Joost is simply the latest enabler for a media culture that places profits before the public interest. What Joost really is about is old media value 1.0. [We won’t get into the violence connection with these shows. Interactive channels promoting violence, especially at this time in our global society, should give all responsible people a reason to reflect. But I hope that other advocates raise lots of you-know-what about this.]

An intrepid reporter from Variety has an important story today on how equity firms–such as Michael Powell’s Providence Equity Partners–are buying up TV stations as if they were mere hog belly futures. One focus of such investment, notes Variety, are broadcast television stations in rural markets. It seems that these communities are not totally yet part of the rapidly emerging broadband new media economy. Broadcast special interest lobbying has given these stations lucrative placement on cable system. Hence, these local TV stations still reap decent ad dollars. Here’s a key excerpt from Cynthia Littleton’s article:

“Small-market stations are one of the best-kept secrets in TV,” Yager says [Yager is CEO and pres. of Barrington Broadcasting].

Madison Avenue is abuzz with talk of how newspapers and phone books are bleeding classified advertising dollars to Web and digital platforms. But in small town U.S.A., the migration of classified dollars is from print to local TV, Yager says. As over-the-air network entities, broadcast TV stations are guaranteed a channel position on the local cable operator’s channel lineup — at a price that is rising as broadcasters become more militant about demanding high retransmission consent fees than in the past.

Some in the industry are skeptical that the newly minted broadcast station owners will do much if any investing from afar in their stations, or have the secret sauce to boost the margins of what is already a 15%-20% margin business.”

Variety explains that Cerberus Capital Management, which also owns Mervyn’s department stores and the Alamo and National rental car firms, just acquired seven small market stations from CBS. Congress, the FCC, the mainstream press and media reform advocates should investigate these private equity investment sales. Stations should not be owned by companies principally concerned with profit maximization. Congress should require major investment in news, local programming and community affairs as television stations get sold. New buyers should be required to pay-out for community service or be ineligible for acquiring licenses.

source: “Private Investors go Rural: Equity Investors Reel in Big Fish in Small Ponds.” Cynthia Littleton. Variety. April 27, 2007 [sub required].

We think Google’s name for its Doubleclick take-over is revealing. They called it the “Whopper Acquisition Corp.” This deal is about empowering the most powerful advertisers to target us via Google’s ever-expanding precision and personal data-infused technologies. But our data—and civil society—isn’t a fast-food marketplace. Google’s glib approach may be cute by Silicon Valley standards. But much more here is at stake. Google needs to acknowledge this, and be forthcoming about the need for privacy protections and marketplace safeguards.

From merger agreement: “THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is entered into as of April 13, 2007, by and among Google Inc., a Delaware corporation (the “Buyer”), Whopper Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Buyer (the “Transitory Subsidiary”), and Click Holding Corp., a Delaware corporation (the “Company”).”

[source for Whopper lead is John Battelle’s weblog]

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From Google’s FAQ on the deal (excerpt):

“Q. How will this acquisition benefit DoubleClick advertisers?
A. The acquisition will give advertisers more targeting and buying options and will provide maximum reach for their target audience, helping them achieve the best returns for their campaigns. Online advertising gives advertisers the ability to precisely target the right ad to the right user at the right time. Working with DoubleClick, we will make online text and display advertising more targeted and relevant for the user and therefore more valuable to the advertiser.”

[and then the following, my italics]:
“
Q. Why doesn’t Google accept third party tags?
A. We don’t do anything to compromise the user experience on Google properties or across our AdSense network. In order to ensure the quality of this experience we did not accept third party tags because we could not guarantee the quality of the ad or that it would comply with our format policies. Working with DoubleClick, we will increase the relevance of ads online so that we maintain a positive user experience while provided targeted ad opportunities for advertisers and increased monetization for publishers.”

FAQ available via here (see 4/13/07 post).

Here’s the Sunday release from Microsoft and a link to a paidcontent.org story on similar corporate competition concerns. Of course, more is at stake, including the future diversity of editorial content online. Whomever controls the interactive ad market will determine much of broadband’s future.

“Microsoft Statement on Proposed Acquisition of DoubleClick by Google”

“Microsoft has released the following statement by Brad Smith, Senior Vice President and General Counsel, Microsoft Corporation, on the proposed acquisition of DoubleClick by Google:

“This proposed acquisition raises serious competition and privacy concerns in that it gives the Google DoubleClick combination unprecedented control in the delivery of online advertising, and access to a huge amount of consumer information by tracking what customers do online. We think this merger deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market.”

and from paidcontent.org (excerpt) “Rivals Start Weighing on Google-Doubleclick Deal: Want Close Regulatory Scrutiny
“A flurry of activity over the weekend after Friday’s announcement about Google’s intention to buy DoubleClick for $3.1 billion in cash. Competitors like Yahoo, Time Warner and Microsoft, all of whom did bid for DCLK, are talking about anti-competitive nature of the deal. The deal will be subject to a review by either the Department of Justice or Federal Trade Commission.
— This is possibly the first time Microsoft has leveled a charge of anti-competitive behavior, reports FT. Between them, Google and DoubleClick account for “over 80 per cent of the adverts delivered to website publishers, so their combination in a single company has big ramifications,” Brad Smith, Microsoft’s general counsel, said on Sunday.” [story continues]