Category: Yahoo!

Google’s Eric Schmidt’s Bluster Against Antitrust Regulators: A Failure to Live Up to His Convictions?

In today’s New York Times, Google CEO Eric Schmidt suggests that everyone other than Google is confused, ignorant, or incorrect about how the search giant operates its online ad business. It seems in his worldview, no one–not certainly the Department of Justice–should have raised a finger of concern over its proposed alliance with Yahoo. Schmidt told the Times yesterday that “We canceled the deal with about one hour to go before a lawsuit was going to be filed against our deal. We concluded after a lot of soul-searching that it was not in our best interest to go through a lengthy and costly trial which we believe we ultimately would have won.”

If Mr. Schmidt really believed that he was right and everyone else was incorrect, he should have stood up and fought–instead of jilting Yahoo just as they were about to be conjoined. However, we believe that Google choose to abandon the deal because it didn’t want to further open itself to regulatory review–which would have demonstrated why its Yahoo deal would have been bad for competition and privacy.

Google’s DC Lobbying Office Warned Company About Now Scuttled Deal with Yahoo

The enterprising columnist Kara Swisher has done terrific work analyzing the now scuttled Google/Yahoo alliance. She has reported that Google’s lobbying office in Washington, D.C. actually tried to convince top company officials to not pursue the deal. The Google D.C. lobbyists correctly understood that the company is now under the “radar” of a growing number of regulators and privacy advocates from around the world. The failure of the company to heed this sound advice illustrates how its top management is out of touch with the realities of its own market and societal impact.
Here’s an excerpt from a recent Kara “Boomtown” column: “Early on, that was also a big worry of Google’s own operatives in D.C., who expressed concern–largely ignored at HQ, where execs really do see themselves as not even slightly evil–about its growing image as a scary behemoth.”

Google’s new funding program for Academics: $ for studies on “Brand Development,” Click Generation” and “for moving traditional video spots from broadcast to broadband”

The advertising industry is engaged in a growing research effort to push the boundaries of marketing. It wishes, for example, to reach deeply into our unconscious mind in order to generate a range of behavioral responses. Marketers are exploring how the new tools of digital advertising can influence consumer emotions.

For example, Google is now engaged in consumer neuroscience research to make its YouTube ads more effective. But Google wants more academic help so it can improve its digital marketing prowess. So Google and global ad giant WPP have joined forces to create “a new research program to improve understanding and practices in online marketing, and to better understand the relationship between online and offline media.” The program will be run by a trio of scholars, including Google’s own Hal Varian, Professor John Quelch, senior associate dean of Harvard Business School (who is a a non-executive director of WPP), and Professor Glen Urban, former dean of the Sloan School of Management at the Massachusetts Institute of Technology. Varian told DM News that “We want to encourage more research about how online and offline media work together to influence consumer choices. We think that such research will contribute to more effective and more measurable advertising performance.” DM News also reported that Mark Read, CEO of WPP Digital and WPP’s director of strategy explained that “[T]he industry, our clients and our companies will benefit from the application of some of the world’s finest academic research minds into how online media influences consumers.”

Don’t expect, by the way, any grants to be awarded that examine the ethical dimensions of interactive marketing; or new threats to personal privacy and autonomy; the implications of Google’s growing global control over online ad revenues on publishing; or the negative environmental and social consequences of promoting a digital marketing system which could lead to over-consumption.

Here are some of the research questions Google hopes will draw academics into its program:

    • How does a brand establish a framework for assessing how much should be spent online? How much advertising should be directed at brand development versus specific click generation?…
    • How do you set digital advertising budgets and tactics when in intensively competitive product categories?…
    • What are good guidelines for moving traditional video spots from broadcast to broadband?
    • What is the causal relationship between brand health and search success? And what is the link between search and sales? How does search contribute to word of mouth recommendation?
    • How can banner ads be more effective?
    • How do you model the consumer response to digital advertising in social networks or mobile media?
    • What do we know and what more do we need to know about on-line audiences?
    • How can advertisers be welcome in social networks?
    • Recipients will be invited to attend a conference in Fall 2009 (Sept/Oct) where they can share their preliminary findings.

Privacy Threats from Google/Yahoo Deal: “True Behavioral Targeting”

Via a interview in B to B magazine [excerpt, my bold]: “It seems that Yahoo is out to get two main things from a deal with Google: a proven alternative to its failing search-monetization effort and access to more data that enable better behavioral targeting, complementing its technological and differentiating assets… A Yahoo-Google joint venture would produce the only entity on the Internet with access to a critical mass to enable true behavioral targeting. That’s a lot of private information in one place and a significant limitation for others to compete in behavioral targeting and personalization of the Web.”

source: “What a Google-Yahoo advertising deal means. Christopher Hosford. B to B. October 22, 2008

Attention Google & Tim Armstrong: `Town Hall’ on Proposed Yahoo Deal Must Include Consumer, Privacy and Civil Society

Ad Age reports that Google sales exec Tim Armstrong “is calling for a town hall meeting with the Association of National Advertisers.” [sub. may be required]. The ad association has come out against the proposed Google/Yahoo search ad combine. But such a meeting shouldn’t be a closed door `only the ad biz’ event. By now, Google’s key execs should recognize that the search and online ad market is connected to such issues as privacy, the state of competition, and the future of funding diverse content online. This isn’t an issue that should be constructed by Google as an insider deal. The full range of public policy issues must be debated–including the participation of independent advocates and academic experts to discuss privacy and related concerns. Let Google, the advertisers, critics, supporters, and those in-between have their say–and make it available prominently on YouTube.

A Op-ed Supporting a Google/Yahoo Deal by a Lawyer Who Recently Represented Google?

Glenn B. Manishin, an antitrust attorney, wrote an op-ed yesterday [reg. required] in the San Jose Mercury News which supported the proposed Google/Yahoo alliance. We take no issue with Mr. Manishin expressing his opinion (although we do profoundly disagree with his analysis and conclusions). But we do find it disconcerting to read his resume and see that Google is listed as his recent client [he’s now at a different firm]. Such a disclosure to readers should have been a prominent part of his article. Here’s the excerpt from Mr. Manishin’s CV [with one client in our bold]:

Partner, Kelley Drye & Warren LLP (2001-08) court
Chaired DC/VA Litigation Practice for this New York-based firm and architeched its expansion from legacy telecom regulatory compliance to the policy and legal disputes affecting the new economy. Representative clients included Oracle, Computer & Communications Industry Association (CCIA), Google, Recording Industry Association of America (RIAA), ProComp, Vonage, Return Path, Global NAPs, BroadVoice, IDT, Telos, Winstar Communications, Association of Local Telecommunications Services (ALTS), Consumer Federation of America and Consumers Union. Lead litigation counsel in several trend-setting antitrust cases arising out of the impact of deregulation in the telecommunications industry.

Two years after CDD & USPIRG warn about online advertising & media consolidation, a call to “monitor the state of competition”

Yesterday, Sen. Herb Kohl, the chair of the Senate Antitrust Committee, sent a letter to the Department of Justice about the proposed Google/Yahoo alliance. Two years ago next month, in its initial complaint filed at the Federal Trade Commission calling for an investigation into behavioral online ad targeting, CDD and USPIRG also petitioned the agency to open up an antitrust investigation. It was clear two years ago–as one surveyed the dizzying global shopping spree by Google, Yahoo, Microsoft, Time Warner/AOL–that a tiny handful would soon dominate the online ad market. Given that online ad revenues are the key to the funding of almost all interactive and online content, we were disturbed by the trend then towards consolidation. Of course, fewer companies controlling all that consumer data also raised fundamental privacy concerns.

Two years later, of course, we have even fewer independent companies left standing. Google swallowed DoubleClick (and is poised to partially operate Yahoo); Yahoo acquired Blue Lithium and Right Media; Microsoft acquired giant aQuantive; Time Warner bought Tacoda and Third Screen Media. Etc.

Regulators on both sides of the Atlantic have been asleep at the digital switch. They have failed to both protect competition and privacy. However, there is a growing awareness that there are serious problems looming. As we know, the same deregulatory philosophy which helped wreck our economy is also the foundation for communications and media policy. It is accompanied, of course, by a `golden’ revolving door between government and private industry that has left consumers and citizens vulnerable to a wholesale set of unfair practices. Addressing these issues will be the focus of much work over the next several years.

Network Advertising Initiative Continues to Protect Online Marketers Interests Instead of Consumer Privacy

The Network Advertising Initiative’s (NAI) real role is to protect the ability of its members (Google, Yahoo!, AOL, etc.) to collect huge amounts of profiling and targeting data from each of us. NAI claims it’s promoting self-regulation on data privacy through its principles and guidelines. But NAI has long been a toothless group, and is basically a public relations vehicle helping to cover the data crime and more-than-misdemeanors of the industry.

So it’s not surprising that last week, the NAI announced that while it supported an “opt-in” for the kind of behavioral targeting planned by the phone and cable companies, it didn’t believe such a safeguard was required for its data-collected membership. In a statement, NAI Executive Director Trevor Hughes said that his group “believes that opt-out continues to be an appropriate choice mechanism for traditional web-based behavioral advertising and this is part of our sliding scale framework.” That’s the political position taken, of course, by his members. They are the biggest behavioral targeters on the planet.

The NAI is a weak group which reflects the cynical view of the online ad industry.  NAI members hope that they can fool policymakers into believing consumer privacy can be safeguarded by the data wolves running the privacy hen house. The battle lines for the next Congress, the FTC and FCC are being drawn. Opt-out is a feckless approach to digital ad privacy. Responsible companies should be in the lead calling for meaningful opt-in. Note to NAI members:  Deregulation and industry self-governance–how shall I put it–doesn’t seem to have worked that well so far!

Interactive Ad Bureau to Congress and Public: If Your Privacy is Protected, The Internet Will Fail Like Wall Street!

It’s too disquieting a time in the U.S. to dismiss what a lobbyist for the Interactive Advertising Bureau said as merely silly. The IAB lobbyist is quoted in today’s Washington Post saying: “If Congress required ‘opt in’ today, Congress would be back in tomorrow writing an Internet bailout bill. Every advertising platform and business model would be put at risk.” [reg. required]

Why is the IAB afraid of honest consumer disclosure and consumer control? If online ad leaders can’t imagine a world where the industry still makes lots of money–while simultaneously respecting consumer privacy–perhaps they should choose another profession (say investment banking!).

Seriously, online ad leaders need to acknowledge that reasonable federal rules are required that safeguard consumers (with meaningful policies especially protecting children and adolescents, as well as adult financial, health, and political data). The industry doesn’t need a bail-out. But its leaders should `opt-in’ to a responsible position for online consumer privacy protection.

Google Policy Blog Fails to Address Yahoo! Deal & Threat to Competition & Privacy

Google’s post today by Tim Armstrong on why its proposed deal with Yahoo! isn’t a competition problem attempts to weave and spin this critical issue. It’s very revealing as well about Google’s own failure to develop into a company which honestly engages in self-examination and reflection. As one can see from the current melt-down of the financial markets, making money shouldn’t be the sole motivation for behavior. Google should have been able to acknowledge that a major deal with its leading search competitor raises serious questions worthy of broad debate and critical analysis.

The failure of Google to respond to the concerns raised by the World Association of Newspapers this week is reflective of this. Newspapers and content publishers are rightly worried about ensuring a diversity of funding sources for the production of news and other information necessary for a democratic society. It’s not as simple as Google’s Tim Armstrong (who wrote today’s post) suggests, that this deal with give consumers “relevant ads” and help keep Yahoo afloat as a robust competitor. In fact, Armstrong and Google, we believe, aren’t being candid here. When an online ad company dismantles (or turns over) a core part of its search function to its leading competitor, it becomes fatally wounded. As Google knows all well, search and display (and online content) are all intertwined. Yahoo’s future, in my opinion, as a full service online ad company is endangered, as more businesses realize that its search ad business relies increasingly on Google.

There are many troubling privacy issues with this deal, something Mr. Armstrong tries to dismiss by saying that [our emphasis]: “[W]e have taken steps in the Yahoo! agreement to make sure that neither company has access to personally identifiable user information from the other company.” But that leaves open an array of personal data collection points, such as cookies, IP addresses, and other statistical analysis online related data. (The failure, by the way, for the privacy issues of the proposed deal to be investigated by the FTC and Congress, is also disturbing).

Mr. Armstrong is Google’s “President, Advertising and Commerce, North America.” He directs their online ad sales. In responding to concerns about competition in the online advertising market–given its links to broader societal concerns–more than just assurances from the sales department is required.