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Google Responds to AdWords Accusations 149

Posted by Zonk
from the sorry-should-have-thought-of-that dept.
An anonymous reader writes "Google has issued a statement on the Inside AdWords Blog. Based on the thoroughness of the statement and the use of the word 'precedent' in the second sentence, it appears that the Google PR team huddled with the legal team to get their point across." From the post: "Being rather proud of AdWords as a means to effectively advertise one's products or services, it seems natural to use it ourselves. Since it's a common practice across the industry for companies to promote their own products and services through their own web presence, there is much precedent to do this. It's important to note, however, that our ads are created and managed under the exact same guidelines, principles, practices and algorithms as the ads of any other advertiser. Likewise, we use the very same tools and account interface."
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Google Responds to AdWords Accusations

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  • by DrEldarion (114072) on Friday December 08, 2006 @03:46PM (#17165902)
    Based on the thoroughness of the statement and the use of the word 'precedent' in the second sentence, it appears that the Google PR team huddled with the legal team to get their point across.

    I use the word "precedent" all the time. Apparently I can go around telling people I'm a lawyer now. Sweet.
    • Re: (Score:3, Funny)

      by Anonymous Coward
      I always use the term "antecedent" myself, so I must be a historian.

      Coincidence? Apparently that would be politics, or some other criminal activity.
    • by aberson (461047) on Friday December 08, 2006 @03:53PM (#17165990) Homepage
      Guess we won't need good ole "IANAL" anymore...
    • by kajoob (62237)
      A real lawyer would have thrown in "reasonable person" and "It depends" for good measure.
    • by AK Marc (707885) on Friday December 08, 2006 @04:24PM (#17166356)
      I use the word "precedent" all the time. Apparently I can go around telling people I'm a lawyer now. Sweet.

      Well, Google did set the precedent.
    • by houghi (78078)
      I do not think it means, what you think it means.
    • Re: (Score:3, Informative)

      by darkmeridian (119044)
      They didn't use "precedent" to refer to case law, so I don't see what's so legal about that. Precedent is a real English word, you know, not some special legal term.
    • by Paradise Pete (33184) on Friday December 08, 2006 @06:10PM (#17167834) Journal
      I use the word "precedent" all the time. Apparently I can go around telling people I'm a lawyer now.

      Of course you can. In fact, there's even a...what's that word? You know, when something has already happened and it's considered a reasonable example? Darn it all. Well anyway, it's already been done.

  • Based on the thoroughness of the statement and the use of the word 'precedent' in the second sentence, it appears that the Google PR team huddled with the legal team to get their point across.
    To bad you can't mod the summary as "Funny".
  • Nice (Score:4, Insightful)

    by Anonymous Crowhead (577505) on Friday December 08, 2006 @03:49PM (#17165952)
    They probably set the max per click they'll pay to $10000. It's not like they have to pay for it.
    • Re:Nice (Score:5, Informative)

      by Joe Decker (3806) on Friday December 08, 2006 @04:23PM (#17166346) Homepage
      Check your dictionary under "opportunity cost." I make photographs, I frame the photographs I sell. If I take one out of inventory and put it up on my wall instead of putting it into a gallery or cafe, I'm very much paying for it, even if I don't "have to pay for it."
      • Re: (Score:2, Insightful)

        by maxume (22995)
        Assuming you aren't heavily back-ordered, the opportunity cost is going to be relatively small. The same holds true for Google; unless I am horribly misunderstanding it, they are still charging the second and third place bidders quite a bit for spots 2 and 3, so they are missing out on whatever the bid is for spot 4(actually, it looks like they show ~8 ads for 'spreadsheet, so spot 8) and whatever amount the losing bidders would have paid to move up a spot.

        I bet they manage the opportunity cost very aggress
      • by TubeSteak (669689)
        I imagine Google makes more from whatever they fictionally pay themselves than the opportunity cost.

        Even if they didn't, it could still make sense, if for no other reason than to build Google Brand awareness.

        Those are the kinds of things that marketing/advertising pros sit around and think about.
      • by Skater (41976)
        Why did Google even bother responding to this accusation? They would've been much better off to ignore it. It's their company, they can do what they want for advertising, and if the external customers have a problem with how they operate, they'll go elsewhere. The anti-google crowd won't be happy with any explanation Google would give, anyway.

        But, now here it is, refreshed in our memories, giving the accusation more publicity.
      • by Matthaeus (156071)
        Thank you for posting about opportunity cost. It needs to be brought up by someone in this discussion.

        I would like to elaborate on your example, though.

        The limiting factor in how many photos you sell is the demand, not the supply. If you take a photo out of inventory and hang it on your own wall, you're out your own cost to print that photograph (and, if it's the last photograph of that type and someone wants to buy it before you've had time to print another, you may be out that sale. Let's assume this d
        • by Joe Decker (3806)
          Google's ad space, however, is supply-limited.

          I beg to differ. In most of the products markets I advertise in, and in most of the product markets that get advertise on my sites, Google is able to fill the entire set of ad slots. If Google's ad space were supply-limited, I would expect this not to be the case.

          Heck, I put up a site (using blogger), and this is way TMI, discussing the circumstances around a recent colonoscopy, and the ad units on even that site are always filled.

          • by Matthaeus (156071)
            The supply in this case is the number of slots. Google only has so many of those slots in which to put ads. The demand is the number of ads that want to be placed in these slots. In economic terms, the slots and the exposure to the market that they represent are the scarce resource.

            I don't think you're wrong; I think you misunderstood me.
    • Re:Nice (Score:5, Insightful)

      by E++99 (880734) on Friday December 08, 2006 @05:07PM (#17166940) Homepage
      They probably set the max per click they'll pay to $10000. It's not like they have to pay for it.

      Actually they would. The ads that show up on Google search are the same ads that show up through their Ad Sense program on other people's website. So if they bid $10000 per click, they'd end up paying that (half of it, IIRC, and keeping half) for clicks on other web sites.

      And they still pay when it's on their own web site, though not as much. They force another ad out of the #1 spot, and they force the bottom ad out altogether. That's less click-through revenue for them.
      • by hankwang (413283) *
        So if they bid $10000 per click, they'd end up paying that

        Only if there's another bidder who offers $9999 per click. At least, that's what I understand of the adwords bidding system. If there are no other bidders, you just pay $0.05 per click. And if you bid $100, one competitor $99, and a third one $0.05, then you will pay $99.05, the second one $0.06, and the third one $0.05, or something like that.

  • It's important to note, however, that our ads are created and managed under the exact same guidelines, principles, practices and algorithms as the ads of any other advertiser.


    I think they forgot, "...only we have unlimited play money we can allocate toward each search phrase, so we can ensure Google ads always beat out the paid ads from the unwashed masses."
    • Re: (Score:3, Informative)

      by damiangerous (218679)
      No, they covered that aspect and denied it.
    • Think about it... (Score:5, Insightful)

      by TheSHAD0W (258774) on Friday December 08, 2006 @03:55PM (#17166018) Homepage
      When Google uses this "play money" they lose the opportunity to make money from outside. It *is* an advertising budget; without it, Google would beat out EVERYTHING, but its revenue would trickle to a crawl. The best way to play the game would be to allocate a budget just like it was using someone else's service; that keeps everything under control.
      • MOD PARENT UP (Score:5, Insightful)

        by brunes69 (86786) <slashdot AT keirstead DOT org> on Friday December 08, 2006 @04:02PM (#17166108) Homepage
        It's the exact same dillemma TV networks have. If they spend too much advertising time advertising their own shows, then they don't make enough money from REAL advertisers. But if they don't spend enough, no one knows about their new shows.

        I don't see who Google's situation is any different AT ALL. They very likely do the same thing TV networks do, the station has its own "budget" of time they can allocate to promos, and they don't exceed it.
        • by MDMurphy (208495)
          That's the precedent I first thought of when I read their post.

        • "It's the exact same dillemma TV networks have. If they spend too much advertising time advertising their own shows, then they don't make enough money from REAL advertisers. But if they don't spend enough, no one knows about their new shows. I don't see who Google's situation is any different AT ALL."

          The television analogy is wrong because the TV networks don't sell anything other than ad time. Google, on the other hand, sells lots of other products and services besides Internet search.

          Suppose that

          • Re: (Score:3, Insightful)

            by Tim C (15259)
            The television analogy is wrong because the TV networks don't sell anything other than ad time.

            They don't see DVDs of their shows, and licence merchandising rights? The ones in the UK certainly do.
          • by tgibbs (83782)
            TV shows compete with movies and other entertainments that advertise on TV.

            But that is not the point. Every ad slot has a value, defined by what somebody else will pay to put an ad it it. If a network puts its own ads in that slot, they lose the money that slot would have delivered if sold to a 3rd party advertiser. The simplest way to manage this is simply for the network to assign itself a budget at the same rate that 3rd parties pay. Even though this is actually only moving money from one pocket to anoth
          • by Montag2k (459573)

            Suppose that NBC wasn't just a TV network. Suppose that they also manufactured automobiles, in direct competition with Ford, General Motors and all the other car companies. If the other car companies couldn't buy any prime commercial time because NBC was using it all to promote their own cars, they would be pissed.

            NBC isn't just a TV network - they are owned by GE. I'm sure that it would be easy to come up with a similar comparison between GE and its competitors. Other people don't seem to have a prob

      • And yes, I am sure since they can show that ads devoted to promoting Google are in fact 'a loss' thus a benefit for their taxes at the end of the year ;-)
    • said the crook. (Nixon, for you youngsters)
    • Re: (Score:2, Funny)

      by 7macaw (933316)
      And just whom do they pay for that click? ;)
    • by shark72 (702619) on Friday December 08, 2006 @04:22PM (#17166326)

      "I think they forgot, "...only we have unlimited play money we can allocate toward each search phrase, so we can ensure Google ads always beat out the paid ads from the unwashed masses.""

      This is referred to as "opportunity cost." In this case, if they take an ad spot, they lose the opportunity to sell that ad spot to somebody else. If they, for example, get a discounted price of $20 for internal accounting purposes, and it would have sold at $100 on the open market, that's an $80 opportunity cost.

      All companies, big and small, in all industries, deal with opportunity costs like these. I help run a company that makes computer peripherals, and we sell our products to our employees and channel partners at 50% off. We can only build so many of them (assembly lines are a resource that must be allocated), and each product that we sell to our employees is a product for which we could have made more money selling at retail.

      If anybody reading this thinks for a bit, I'm sure it will be trivial how the concept of the "opportunity cost" affects you, either at your job, or in your personal life.

      • Didn't we already have this discussion here? [slashdot.org]
      • by Java Pimp (98454)
        In this case, if they take an ad spot, they lose the opportunity to sell that ad spot to somebody else.


        I think the original argument from yesterday's article was that they actually DID sell that ad spot to somebody else... Then, that somebody else got bumped to the number two spot and Google took the top spot for themselves.

      • by vadim_t (324782)
        This is a bit different if you sell an actual product though. For google, the cost of delivering their own ad, and delivering somebody else's ad is effectively the same, and there are no intermediaries.

        Now, you make periperhals. Let's say you make a keyboard that costs $5 to produce, which you sell to a store for $10 and which the user gets for $20. Also, if the $10 price is: $5 production + $3 profit + $2 transport costs, you could sell it to your own employees for $8 and earn exactly the same amount of mo
  • It's internal book keeping money. Funny money. No real cash changes hands like it does with between other advertisers and Google.

    -S
    • Re: (Score:3, Informative)

      by mspohr (589790)
      Basic economics... consider the term "opportunity cost".

      This does cost Google money. If they sell the words to themselves, then they are not receiving money from someone else for the words. Hence, it costs them money and they do not have an unlimited budget.

      • by Myopic (18616) on Friday December 08, 2006 @04:19PM (#17166304)
        Yes. And furthermore the opportunity cost is equal to the price paid by the otherwise highest bidder for that search term. So, if google wants to own a term, they lose out not only on some amount of money, but the maximum amount of money the market would bear.
        • And furthermore the opportunity cost is equal to the price paid by the otherwise highest bidder for that search term. So, if google wants to own a term, they lose out not only on some amount of money, but the maximum amount of money the market would bear.

          Don't adwords work by ordering the ad results by highest bidder?

          If so, then Google has no opportunity cost here. The highest, non google bidder just gets the 2nd slot instead of the 1st slot.

          The only opportunity cost would come from potential advertisers w
          • Re: (Score:3, Informative)

            Don't adwords work by ordering the ad results by highest bidder?

            No. [google.com]
            • From your link it sure sounds like it is primarily based on who pays the most when the relevance is equal:

              Your keyword-targeted ad is ranked on search results and content pages based on its maximum cost-per-click ... and Quality Score.
              ...
              We use a rank number to help determine an ad's position on a search results page. The higher the rank number, the higher the position of the ad.


          • by 2short (466733)
            "Don't adwords work by ordering the ad results by highest bidder?"

            No, or at least not entirely, since I can't claim to perfectly understand how the ranking does work. But even if they did work that way, and even if Google just magiaclly awarded themselves the top slot (whcih it appears they don't), taking the top slot would presumably mean the next non-google bidder would be willing to pay somewhat less for slot number two, and there's your cost to Google. If a bidder is willing to pay just as much when t
      • by xenocide2 (231786)
        Sure, it costs them money. There's evidence that they do decide how much money each spot they take is worth rather than simply take the first slot- gmail is the second sponsored link for "email" currently. And I see no reason why they shouldn't do it. But it is a bit unfair -- I imagine that unlike their competitors, they can know all the bids out there and their competitor's effectiveness.

        Although I do wonder, what's the marginal cost of an ad on a google search result? How much does it cost google to serv
      • It's described better here. [slashdot.org]

        "And when I **** my wife, I'm denying myself the revenue of a third-party john who might have rented her for that slot. Thus, in a very real sense, I pay the same rate as everyone else."
      • by owlnation (858981)
        Not quite. You need to model it more fully. Yes, there is opportunity cost in not receiving money form other advertisers. However, they can gain tax benefits from reassigning large quantities of revenue that would otherwise be taxable profit to Adwords campaigns.

        It's pretty much win win. I'm fine with it personally, it seems to me to be perfectly reasonable to me that a company would promote itself using it's own products. Especially when in many cases their products are the best in their class. For me t
        • by mspohr (589790)
          There is no "tax advantage" here.

          If Google spends "internal budget" money on adwords, it's the same as if they spent money on external advertising (i.e. buy advertising on Yahoo). They either have lower income (less tax) or greater advertising expenses (less tax). It's a wash.

  • Weasel words (Score:3, Interesting)

    by Captain Kirk (148843) on Friday December 08, 2006 @03:55PM (#17166020) Homepage Journal
    From TFA "As does any advertiser, we aim to give our campaigns a budget"

    Come on, what you are doing is bidding whatever it takes to get the sport you want.

    That pushes up the price for everyone else. Good for you but bad for your customers.

    There is never a case where you lie awake at night worrying if you have bid too much.

    "Do no evil" is a great motto and Google is a great company. I feel that they have not considered this from the point of view of Adwords buyers. I'd be surprised if they are still doing it in 12 months. Google would no longer be the Google we love if they are.
    • by Qzukk (229616) on Friday December 08, 2006 @04:01PM (#17166090) Journal
      I'd be surprised if they are still doing it in 12 months.

      And in a year we'll see Fox advertising NBC shows? The New York Times with a full page ad for the Washington Post? Maybe I'll buy a new car from Honda and the license plate frame will read "Have you driven a Ford lately?" Let's go all out: preachers extolling the virtues of Zen Buddhism!

      A brave new world indeed.
      • Re:Weasel words (Score:5, Interesting)

        by MDMurphy (208495) on Friday December 08, 2006 @04:13PM (#17166248)
        It's not ads, but I've always been impressed by what you get if you search Google and and are offered maps as options.

        Search Google for "map san francisco" at almost the top of the page you'll see links for :

                  Map of San Francisco, CA
                            Google Maps - Yahoo! Maps - MapQuest

        You could argue about them being first, but they give you links to two other popular mapping sites right up top.

        Do the same search on Yahoo! Lower than the Yahoo map you'll find a link to MapQuest, but nowhere on the page is Google.

        So is that Google advertising Yahoo for free?
        • by modeless (978411)
          They only do that because they used to before Google Maps was around. I'd be willing to bet that if they added this feature today, Google Maps would be the only option.
          • They only do that because they used to before Google Maps was around. I'd be willing to bet that if they added this feature today, Google Maps would be the only option.
            And here's the proof: after Google Maps was created, they added a feature to GMail to map addresses that appear in your emails. Google Maps is the only option there.
    • Google would no longer be the Google we love if they are.

      I almost see this as the start of Google's path to Microsoft villainy.

      For those who don't like the MS comparative how about Sony?

    • Re: (Score:3, Interesting)

      by synx (29979)
      I think it's important to realize that the adwords system is not just a straightforward action model. The overture model is straight auction, which is why adwords is superior to overture - the highest bidder does NOT always win.

      A critical piece of any adwords auction is the click thru rate, aks CTR. Any experienced adwords advertiser knows that their CTR is the most valuable aspect of their ad. A higher CTR ensures you pay _LESS_ per click (even if your bid is higher), and the ranking algorithm uses rele
  • At the end of the day they pay themselves the highest rate for those adwords? I think the accountants/SEC would have something to say about that.

    Sure, some admin uses the same interface but the statement ends there for obvious reasons.

    It will be interesting to see if there is bottom-line quarter-reporting implications to this practice.
    • Re: (Score:3, Insightful)

      by leoc (4746)
      Out of curiosity, I wonder if the accountants at the SEC ever investigate the ads TV stations play for their own shows during prime time?
    • Re: (Score:3, Insightful)

      by Myopic (18616)
      In fact yes they pay themselves *exactly* the highest rate for those adwords, because "paying themselves" is the same as saying "not getting paid by someone else". I mean, when google takes an adword, they are no longer paid for that adword by the person who otherwise would have paid the most for it. It is possible that google literally pays itself, but even if it doesn't, it still costs them in lost revenue, and this point is surely not lost on their accountants.
  • Common Sense (Score:5, Insightful)

    by X43B (577258) on Friday December 08, 2006 @04:00PM (#17166082) Journal
    I don't get what all the furor was about it in the first place. Has anyone watched any television channel out there?

    NBC does a crap-ton of promos for their other shows as does every other station.

    I don't get why a company can't use their own products to promote themselves.

    Also I don't get the monopoly argument. Google--Yahoo--MSN Search is no where near the dominance that Windows--EveryoneElse is.

    Also part of a monopoly is barriers to entrance. It is so incredibly brain-dead easy to stop typing google.com and start typing yahoo.com or newsearch.com if one day I don't like to use Google. There is no OS creator that can make it that easy to switch OS's.

    1) Google doesn't have a monopoly, there are real viable competitors with real market share and it is incredibly easy for new compeitors to enter the market

    2) Every company in the world uses their own products to promote themselves
    • NBC does a crap-ton of promos for their other shows as does every other station.

      NBC has competition. While you could argue that so does Google...well you really can't.

      • NBC has competition. While you could argue that so does Google...well you really can't.
        Um, the OP did argue that point, and very accurately at that.
        Also I don't get the monopoly argument. Google--Yahoo--MSN Search is no where near the dominance that Windows--EveryoneElse is.
        I'm not really sure where the confusion is here. GOOGLE IS NOT A FUCKING MONOPOLY!
        • OP argued without links, but so did I.

          Google may not technically be a monopoly however it's market share is rising [webpronews.com] and Google is plenty on it's way to becoming a monopoly. [searchenginewatch.com]

          Lastly, as the person who decides where my companies online advertising budget gets spent I have to tell you that Google overwhelmingly provides much of my traffic. Far more than those charts are showing. Many of my constituents have confessed similar circumstances.

          P.S. This is a discussion, not a shouting match.

      • Re: (Score:3, Informative)

        by missing000 (602285)
        NBC has competition. While you could argue that so does Google...well you really can't.
        Sure They Do [google.com]
        • And, amusingly, they aren't even the first result in that search.
        • by julesh (229690)
          Anyone else notice that the descriptions on the top 6 results there seem to have been written as an editorial introduction to the pages, and not collected from the site metadata like descriptions in search results normally are?

          Any ideas where those descriptions came from?
        • by rthille (8526)
          Wow, I never realized how much of an inferiority complex google has. I mean, they think that search.msn.com is a better result for the query "search engine".

          Wow, just freaking wow!
    • Re: (Score:2, Insightful)

      by FunkeyMonk (1034108)
      To take this comment a bit further -- not only does NBC do a "crap-ton" of promos for their own shows, but they do it alongside ads that they're selling to other companies.

      If I buy a Nike shirt, it has a Nike logo on it.

      What surprises me most about this whole thing is that Google even feels a need to respond at all!

  • So far I call shenanigans. I've seen a lot of these articles here and on other sites. Anyone has real proof of google products appearing always in first place in its searches and/or ads?
  • "In fact, we generally aim for a more 'conservative' position."
  • ...'Google' as #1 then, don't you think?
    • by db32 (862117)
      So...if I run a search engine company, and I make spreadsheet software and you make spreadsheet software and pay me to advertise I shouldn't be allowed to advertise above you for my own product? I should give you an unfair advantage just because? Lets face it, YOU didn't make a giant search engine that basically became the top dog in internet searches, so me giving you preferental treatment over my own products is just stupid. If you are really that upset about me advertising my product on my search engin
      • by Assmasher (456699)
        Perhaps you're confused by the fact that Google is claiming to use the exact same criteria for their pages as for pages outside of Google. Now, considering that, tell me how Google should come up #1 for the word 'spreadsheet'? ;)

        I haven't seen anybody say Google should discriminate against itself, people are saying Google should give Google priority over others just because they're 'Google' products.
        • by db32 (862117)
          Given that they are pretty tight lipped about their criteria who knows. I mean if one of their criteria is response time and the servers are near each other that could do it. There are still a multitude of ways it could come up first without them changing the rules to favor themselves over others.
          • Re: (Score:3, Insightful)

            by Assmasher (456699)
            Their not tight lipped about their criteria, they're tight lipped about the exact algorithm involved (understandably so), but it still doesn't explain how they rank #1 for spreadsheet. Seriously.

            Remember when Google released 'Scholar'? The very next day (this is something other people critical of Google adwords like to mention) somehow, with very few links to this new product, the word 'scholar' had Google showing up as #1.

            Yeah, sure they play fair ;)... It's a fair coincidence that ALL of these words sh
            • by db32 (862117)
              Shrug could be. Certainly doesn't bother me any, its their search engine to use as they see fit really. I hardly think its unfair for them to do that. They could be lying, or maybe they could just not be giving everyone the full story. I am more inclined to believe they just aren't giving everyone the full story. Hell given that its their secret wizbang search engine...well...they kinda know all the ins and outs of it, it stands to reason the could also design their pages to work their way to the top r
              • by Assmasher (456699)
                I think it's only unfair if they charge people and claim to do one thing and yet do another... Doesn't affect me personally, but imagine if it was Microsoft we were talking about? ;)
                • by db32 (862117)
                  Well unfortunately you are living on the wrong planet. Once upon a time claiming one thing and doing another was fraud...these days its marketing. Again I doubt they are really lying, there is a stupidity in that action that I just don't think they would do. However, making claims that are sketchy and skirt around the issue a bit...oh absolutely, and I bet someone got a nice bonus for coming up with a very unthreatening way to say it.
  • Selling a service to customers who compete with you in other areas is always a dicey strategy. It's also known as vertical integration - controlling multiple levels in the supply chain. The risk with that strategy is that lower levels in the supply chain which you control may have difficulty selling their product to your competitors. If I was a spreadsheet or mapping software company (Microsoft), would I use Google to advertise? If I had currency handling (Paypal) software would I use Google to advertise?
    • by iamacat (583406)
      If I was a word processing company, would I port my product to Windows?
      If I wanted to process online payments, would I accept Visa?
      If my co-worker is a competitor for the same promotion, would I come to him/her for work issues?

      When you make a decision to get involved with a 3rd party, 99% percent of the time you should just try to get a better deal in that particular transaction rather than considering potential competition through several layers of indirection. Otherwise, you will end up not getting a good
  • Ok.. so google pays itself for clicks.. say 10000 clicks a day at some arbitrarily high number like $10000/click. So, will Google then report that as SALES? .. ooh today we earned $100,000,000! See Wall street, push our stock value up - we just made a boatload of cash! ... makes me wonder if the emperor is feeling the draft yet.
  • Since there's no precedent for any other group using large words included in the english language.

    I don't particularly like lawyers in general, but that really was a cheap shot. I expect better out of the lawyer-bashing slashdot crowd.
  • It struck me pretty funny that that the top google add for this post was .... (drum roll please) Google AdWords go figure ...
  • by hal2814 (725639) on Friday December 08, 2006 @04:52PM (#17166694)
    "It's important to note, however, that our ads are created and managed under the exact same guidelines, principles, practices and algorithms as the ads of any other advertiser. Likewise, we use the very same tools and account interface."

    But Google knows their own search algorithms. I'll bet if I were privvy to the same knowledge, I could make AdWords ads that rival Google's. They play by the same rules but only they know the rules.
  • Google hires away MS's top talent, and people are shocked when they start to act like MS?
  • That way any potential customer knows beforehand these words are not available for a first place ad, otherwise the word fraud comes to mind.
  • There is an important difference between what Google is doing and what television stations do when they run ads for their own shows: the TV stations don't sell their ads in an auction market (at least not usually).

    If Google bids for AdWords (either with funny money or somehow with real money) then it is bidding against its own customers in an auction for its own products. Bidding in your own auction ("shill bidding") has long been considered a fraudulent practice.
  • Tax Liability? (Score:3, Interesting)

    by Christopher_Edwardz (1036954) on Friday December 08, 2006 @05:37PM (#17167340)

    If google:

    • gives itself free advertising for other products in its portfolio
    • and derives monetary or other substantial benefit
    • and values this service for money

    Do they, then, have to mark as "income" the money they create in this manner? I mean, the point would be moot if they "paid themselves" and then marked that as income. (And also created a business expense I guess.)

    Do they have to bid, like the others, or do they simply bid[0] = bid.highest() + 1 where bid[0] is google's "bid"? If so, does this violate their own bidding rules? It appears by the article that they do bid fairly.

    However, if they do not use "real money" to do so, or record any "created money" as income (as it is value, as it is valuable, since they sell it as a service), isn't this a problem legally?

  • It's important to note, however, that our ads are created and managed under the exact same guidelines, principles, practices and algorithms as the ads of any other advertiser. Likewise, we use the very same tools and account interface...

    We just pay ourselves more then our competators.

  • by noz (253073)

    "Based on the thoroughness of the statement and the use of the word 'precedent' in the second sentence, it appears that the Google PR team huddled with the legal team to get their point across."

    Was the author smoking a cigarette at the time? In his underpants? Was he pissed off with his wife? Had he run out of beer? Who gives a shit.

    What is it with this hack analysis of "how" something was produced. Academics got distracted with this idea of process a long time ago; did a good job of it; and some of them

  • Don't look now, but this story on AdWords has Google AdWords on it! And the top ad is for Google's ad competitor, but THE SECOND ONE is an advertisement for GOOGLE ADWORDS! And if you click on it, it'll TAKE YOU TO GOOGLE'S ADWORDS PORTAL!

    Won't someone please think of the children?! I can't bear to look, but I can't tear my eyes away! Ah Bartleby! Ah humanity! For the love of God, Montresor! Noooooooo!
  • Boy, they really still don't get it. I couldn't believe they were trying to protray that their employees using the Google system are competing on an equal playing field with customers using the Google system. Reminds me of when Microsoft publicly claimed that there were no undocumented API functions, and their app programmers were competing on a level field with all other Windows app programmers. Claimed that right up until Andrew Schulman raised his hand and said "Umm, here's some undocumented system funct
  • It's important to note, however, that our ads are created and managed under the exact same guidelines, principles, practices and algorithms as the ads of any other advertiser.
    So, if a Google employee makes the mistake of clicking on a Google ad from the same shared IP that was used to put the ad on the air, will Google ban itself from the AdSense service?

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