Google's Silent Monopoly 425
An anonymous reader writes "Isaac Garcia from Central Desktop Blog writes, 'How much does Google pay *itself* to claim the top ad position for searches relevant to its own products? Google holds the top advertisement (Adword) slot for the following key words: intranet, spreadsheet, documents, calendar, word processor, email, video, instant messenger, blog, photo sharing, online groups, maps, start page, restaurants, dining, and books...
...if you are trying to advertise a product that is competitive to Google, then you'll never be able to receive the Top Ad Position, no matter how much money you bid and spend. How different is it than MSFT placing its products (Internet Explorer) in a premium marketing position (embedded in the OS)?'"
It's fine for Google to do that (Score:2, Insightful)
I got that insight from Vellmont [slashdot.org] et [slashdot.org] al [slashdot.org].
"Do No Harm" (Score:5, Insightful)
Did I miss something? (Score:4, Insightful)
Last I checked, Google was *one* place where you could buy ads. If you don't like it, advertise elsewhere.
Google *does* pay itself. (Score:5, Insightful)
Google isn't a monopoly (Score:2, Insightful)
End of story, really. MSN Search, Yahoo Search, Ask.com, etc etc, make up a significant part of the search market.
You mean like TV channels? (Score:5, Insightful)
Re:It's fine for Google to do that (Score:3, Insightful)
Microsoft leverages their monopoly to trap you into using MSFT tools, most of which are in some way or shape flawed compared to alternatives. Microsoft also holds a fairly large portion of the market share.
Google doesn't force you to advertise with them, nor do they limit your ability to advertise with others. And they're not the only website on the internet. I don't see that Google has a monopoly on "the Internet."
Tom
Umm... (Score:5, Insightful)
The cost to google is loss in revenue from not being able to sell those top positions, presumably...
How hard was that?
Fine by me.. (Score:4, Insightful)
Its the difference between seeing Mobile ads at a Shell gas station. Of course your going to see ads from Shell rather than Mobile, but if you don't want to see that, just go to a different service station.
I think that is called "Smart" (Score:4, Insightful)
Why don't you go to a cab company and ask to advertise another cab service on their cars. Good luck!
Re:It's fine for Google to do that (Score:4, Insightful)
Simple. Microsoft is a convicted monopoly, google is not. Next there will be complaining that Linux distro's bundle media player software. You play by a different set of rules when you are a convicted monopoly.
That is really important... (Score:1, Insightful)
If you don't want to see commercials get a tivo or don't watch tv;
if you don't like microsoft products, DON'T USE THEM;
if you don't want to see googld ads, DON'T USE GOOGLE.
BTW Google does not have a monopoly on the search market, just ask yahoo, or microsoft (don't ask balmer, he may heave... a chair).
Re:It's fine for Google to do that (Score:5, Insightful)
So if Microsoft's tools were technologically superior to the alternatives, the behavior would be okay? I don't think so.
I don't see that Google has a monopoly on "the Internet."
No, but "the Internet" isn't a product. Google has a near-monopoly on web searches, and it is (allegedly) leveraging that monopoly to gain a competitive advantage in other industries that also happen to be web-based. Just because a product is offered on the Internet doesn't mean the product is "the Internet," and it doesn't mean that product isn't distinct from other offerings on the Internet.
Leveraging your position in the market for one product to increase your competitive advantage in the market for another product is nothing new. The problem comes when you are so dominant in Market A that leveraging that dominance in Market B would cause others to be unable to effectively compete in Market B.
The question here is whether Google is sufficiently dominant in Market A, the web search market, to be classified as a monopoly. If they are, then what they are doing could be classified as illegal abuse of that monopoly.
Re:How about Google isn't an Illegal Monopoly? (Score:3, Insightful)
Re:Google *does* pay itself. (Score:3, Insightful)
My point was just that you have to be careful when tabulating an "opportunity cost".
Re:If you are going to use stock symbols to refer (Score:4, Insightful)
People do this verbally as well, as some who visit Target stores refer to them as [pronounced] Tarjhay, a pseudo-French pronounciation used to imply their view of that retailer as a purveyer of goods that are in high-style compared to other discounters. When K-mart stores took a dive, some referred to them as K-fart. Wal-Mart is often called "Wally-world" in veneration of the company's founder.
Certainly there are times when such personal meanings should be set aside (e.g., business memos), but in a public forum such personal expression is entirely appropriate.
Re:It's fine for Google to do that (Score:5, Insightful)
Monopolies only become a problem when they stop doing what's in the best interests of the customers. If Microsoft produced quality software and listened to the customers, then I suspect most people wouldn't have a problem with them. Oddly enough, a fairly common criticism of MSFT is that they're all closed source. So if they listened to their customers and opened up more of the kernel, file formats, and what not, we wouldn't have this vendor lockin problem and hence no abuse of monopoly.
BTW there are quite a few natural monopolies like gas, water, telco, cable, etc. Which usually don't get broken up until they start really abusing their customers. (I'm waiting for Rogers to get a bitch slap...)
As for Google, I guess I can't comment since I'm not in the market to advertise and I mentally block out Adsense advertisements. But that said, I see [or acknowledge] more ads from slashdot and fark than I do from google.
Tom
Re:It's fine for Google to do that (Score:5, Insightful)
1) Cost to the average user. When you decide you want to or need to use Microsoft software, it'll cost you. Non-OEM copies of Windows are quite expensive (~$300?). When you decide to use Google to look for a website, it's free, other than having a few ads on the right side of the screen. I've never sent Google a dime, even though I've used many of their services (search, maps, etc.) for years.
2) Availability of alternatives. If you have a copy of TurboTax or AutoCAD and want to use it, you need a copy of Windows installed on your computer. You might be able to get it to work with WINE on Linux, but don't count on it; most likely it won't work fully. If you work at a company with an internal website that uses ActiveX crap, you're basically forced to use Windows/IE. However, if you want to search for a website, you can choose from Google, Yahoo, and MSN searches. Nothing's stopping you from using one of Google's competitors. The only reason they command the overwhelming majority of search uses is because they have a reputation for returning the best results. But most searches will probably work fine with any of them. Similarly, you can use Google Maps to find directions someplace, or you can use Mapquest or one of several others. People happen to like Google Maps, but the others all work fine, and will probably find your destination for you as well (and the results may actually be more accurate, though the user interface will suck more in my experience).
Google only has a huge market share because people like them and choose to use their services. This could change at the drop of a hat since several competing services are available which do all the same stuff (just not as well), and there's absolutely no lock-in forcing anyone to stick with Google.
Re:It's fine for Google to do that (Score:4, Insightful)
Google has nothing like a monopoly on web searches. There are countless close substitutes. Even if Google has a large portion of the market share, as long as those substitutes exist (or can exist), Google cannot function as a monopoly. (If Google could function as a monopoly, they could charge for their search services and anyone wanting to search would have no choice but to pay.)
We're talking about their advertising business, though. In that context, whether they have a monopoly on searches is irrelevant because they're competing against the entire internet for eyeballs. In this context we would be even less justified in calling Google a monopoly.
Re:It's fine for Google to do that (Score:5, Insightful)
Make no mistake about it, people who use Google's free services are not Google's customers; they are Google's product.
Advertisers are Google's customers. They are the ones who pay. Granted they treat their users well with their offerings, but in no way are you a customer of Google's.
Re:Keyword "OS"... (Score:3, Insightful)
As for regular searching, when I tried the list of keywords in TFA, only "spreadsheet," "word processor," "video," "photo sharing," "maps," "start page," and "books" came up with Google in the first four results. It comes up for "instant messenger" in 6th place.
In conclusion, I doubted this was really some sort of conspiracy before reading the blog post, and now I doubt it even more unless Google simply doesn't give a shit about its international competition.
Speaking of competition, is it just a coincidence the author of the blog runs a company that makes and sells products which would have to compete with Google's free offerings? How much of this anger is just sour grapes? I would be pretty pissed too if I spent a lot of time making DHTML and Wiki-based company office software and Google offers basically the same stuff online at no cost.
Just a reminder of what Googles product is.. (Score:2, Insightful)
It is web searchers
And the people who buy advertizing space are the customer, not you.
Re:It's fine for Google to do that (Score:2, Insightful)
From Dictionary.com:
Last I checked, Google had nothing near a monopoly. More people choose to use Google because it offers a superior product. But it is just as easy to type www.yahoo.com or www.live.com or www.msn.com or www.dogpile.com or...you get the point.
The article is FUD. If Google wants to place its services in the top results, it's their choice to. As long as they are willing to accept that they won't make as much money off of PPC (their only real source of income, outside of partnerships) for those keywords, they can do whatever they want. The law has no place there, because they aren't doing anything illegal, or even questionable.
Re:Google isn't a monopoly (Score:2, Insightful)
Re:Did I miss something? (Score:2, Insightful)
Google has almost 73% world market share [hitslink.com] in search. That gives you 73% world market share in search advertising. That is a monopoly. No one is arguing that there isn't competition for online advertising companies, there are. Google's content advertising has many competitors - as do their free email services, map tools, ect.
Back to the 73% search advertising market share. If you have that much of the market captured, AND you leverage it to get placement for your OTHER services - you are manipulating a monopoly unfairly. Everyone complained when MS did it with IE and Office, now people are defending it it because Google did it.
Re:It's fine for Google to do that (Score:3, Insightful)
That's the monopoly. Not search itself.
Re:It's fine for Google to do that (Score:4, Insightful)
I'm not sure it is possible to have a monopoly on something on the internet. There is *no* penalty for using other products. They are not harder to find, they are not more expensive to use, and google can't do anything to prevent you from using them. The definition of a monopoly on a product is that it is the only (or "almost" only, se MS Windows) available one of its type.
There are plenty of other search engines, the reason people dont use them is that they suck compared to google. I'm not sure that makes a monopoly. If google went around buying up start-up search engines to close them doen or bullying isps to block acces to other engines besides google, then you might have a monopoly.
Fer Pete's sakes, people (Score:3, Insightful)
There's absolutely no comparison between that and Google giving itself top billing for specific product searches. In the rare event that your Google search puts a Google service into the #1 slot, all the remaining paid ads appear on the same page. Google isn't shutting off competition by hiding other vendors ads, it's getting right in the thick of competition by showing users exactly what other vendors offer services that compete with its own stuff.
All we have here is some little bitch whining because there's a theoretical limit to his ability to buy the #1 slot in any category he wants. Boo hoo. If someone can give me a nice, solid financial breakdown of the difference in value between the #1 slot and the #2 slot, I probably still won't give a damn.
Y'know what else Google moonopolizes? The logo on its search page. Everyone who does a search sees that logo, and our whiny little bitch can't buy that, either, no matter how much he wants to.
Re:Google *does* pay itself. (Score:3, Insightful)
This being slashdot, this is all theoretical anyhow, and fictional women rejected to sleep with an equally fictional wife cost you nothing.
The author does not show Google is a monopoly. (Score:3, Insightful)
Having failed in proving that Google is a monopoly, the basis for the rest of the article is vacuous.
Re:It's fine for Google to do that (Score:3, Insightful)
How is it Microsoft's fault that software developers are not interested in porting their software to other platforms? Blame the makers of TurboTax and AutoCAD, not Microsoft.
Re:Maybe not diffrent. (Score:4, Insightful)
Microsoft actually has a monopoly and has abused it, whereas Google has no monopoly and doesn't appear to be willing to abuse it, judging by their past behavior. Even if all they care about is shoving as many ads down our throats as possible, they at least present the ads in a tasteful manner, where I can choose to click or not. They don't display flashing ad banners that distract from the material on the page, which I do consider an abusive practice. When Google has 90% of the search market, and everyone is advertising with them, then they have to start allowing competitive ads to appear in whatever slot the advertiser pays for. They also have to be careful to not abuse their customers by losing mail in gmail inboxes, filtering mail from competing companies, etc.. As it stands, it's impossible for Google to exploit a monopoly Google doesn't have.
Re:It's fine for Google to do that (Score:3, Insightful)
While I agree that any "monopoly" argument is out of place and that there is nothing *illegal* happening here, I have to take issue with "or even questionable".
Sure, it may be their playing field to run however they fit, but the value of Google ads to the customer is that it purports to be a free and open market for ad placement. If it becomes free and open *except for the company that owns the marketplace*, I'd hope their customers would start abandoning them in droves.
Also, Google search results placement are purported by Google to *not* be for sale. Again, if the perception become that Google won't sell search placement but will alter them for their own purposes, then people should rightly question whether or not Google is a level playing field.
If these allegations prove substantial, then I think Google's customers should absolutely consider these practices "questionable". However, the market, rather than the law, will be what sorts this out.
Re:Google *does* pay itself. (Score:3, Insightful)
I'm not buying this. Slots are not sold individually with a price tag on each. They are being auctioned in batch. Whoever pays most gets 1st, next guy gets 2nd, etc. When Google takes 1st slot for themselves they don't really lose much since they just shift everyone else 1 slot down and still take all their money.
Re:It's fine for Google to do that (Score:2, Insightful)
& a company that is a convicted prdatory monopolist is categorically different from a company that has a large market share and has NOT been convicted of anything.
Re:Monopoly Behavior (Score:4, Insightful)
An argument which is invalid, to start with.
Which is, as stated, false as well, as a monopoly is defined by price-setting power, not marketshare.
Re:Monopoly Behavior (Score:3, Insightful)
What he means is that Google cannot raise their prices arbitrarily, because they do have legitimate competitors that their customers can utilize.
Re:It's fine for Google to do that (Score:3, Insightful)
The services and what not are (bad analogy forthwith) just the roads on which to get people to travel to look at the billboard type advertisements.
Re:It's fine for Google to do that (Score:4, Insightful)
For example, if Google started telling it's advertisers that they can't advertise with anyone else if they want to be able to advertise with Google, that would be an attempt to illegally (or at least abusively) leverage their position in order to harm their competitors. Sort of like Microsoft telling computer manufacturers that if they want to be able to sell computers with Windows installed, they better not be selling computers with any other OS (or with no OS) - at that point, they are abusing their market position to build artificial barriers to entry in the desktop OS market.
There can only be a monopoly if there is a significant barrier to entry in a market. It is only an abusive monopoly if they either use their position to raise artificial barriers, or if significant "natural" barriers exist, when they start abusing their customers.
Re:Monopoly Behavior (Score:3, Insightful)
The argument is that since Google has close to 73% world market share in search traffic, that they also have that same 73% in search advertising.
Unfortunately the chart you link to cannot possibly be accurate. Search engines are not operating systems or phone companies. Studies indicate that people typically use more than one search engine. So while 70% of people may use Google, it's not that Google has 70% of a "search engine market"; it's that 70% of Internet users have visited Google. 40% may have also visited MSN. But you can't graph 110% on a pie chart.
Marx is a wanker (Score:4, Insightful)
Radical capitalism is based on an assumption of some kind of radical choice, which is basically a fantasy.
There are generally a lot more choices in capitalist societies than in socialist or communist ones. As it is, I can search with Yahoo, Dogpile, or any other number of search engines.
Part of my problem with MS is that they prevent other products from being compatible with theirs, in order to maintain their monopoly.
What is in fact happening is the continued alienation of human beings from each other and our social worlds
This 'alienation of human beings from so and so' line (usually from the product of their labor) is one of the worst Marxist criticism of capitalism I've heard. As if I can't call up my friends and spend time with them if I want to. Or get a job outside a corporation making handmade art... if I wanted to. Corporations pay much better,generally, than smaller businesses. If people thought "alienation" was a problem, they'd work in jobs that didn't "alienate" them. (And how does Google alienate people? By making it easier to find people or businesses, it would seem to do the opposite.)
Re:It's fine for Google to do that (Score:1, Insightful)
Money is just a proxy for something of value. It's more convenient to get pieces of paper than, say, a fattened calf, but there can be other ways to exchange something of value. Google sells us their service in exchange for our attention. Google sells the opportunity to get our attention to advertisers in exchange for money. Everyone's getting value.