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Google Negotiating With Justice Department 83

Posted by CmdrTaco
from the they-should-hire-shatner dept.
mikesd81 writes "Cnet reports that to avoid being sued by the US Justice Department, Google is negotiating with them. The Justice Department and a multistate task force are still reviewing the proposal to decide whether to oppose the partnership. Under the non-exclusive partnership Google would supply Yahoo with some search ads, a move that could increase Yahoo search revenue, but that also gives Google even more power in the market. Yahoo expects the 10-year deal to raise revenue by $800 million in its first year and to provide an extra $250 million to $450 million in incremental operating cash flow. Google's share of the US search market reached 71 percent in August, compared with Yahoo's 18.26, according to Hitwise's most recent numbers."
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Google Negotiating With Justice Department

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  • by pla (258480) on Wednesday October 15, 2008 @08:58AM (#25381349) Journal
    to avoid being sued by the U.S. Justice Department, Google is negotiating with them

    Okay, Google has 71% of the search engine market... Which itself makes up what, less than 5% of the total world of advertising?

    Oh, boo-hoo, Google can actually tell you how much you have to pay to share their sandbox. Sorry advertisers, but we don't want your "product" in the first place. Go bitch to someone who carres.

    And, advertisers-of-the-world (and other search engines), do you know why Google has 71% of the search engine market? Because Google doesn't piss us off with banners and flash ads and hiding sponsored links as results. Get the hint?
    • by Spazztastic (814296) <spazztastic@NOSPaM.gmail.com> on Wednesday October 15, 2008 @09:04AM (#25381399)

      And, advertisers-of-the-world (and other search engines), do you know why Google has 71% of the search engine market? Because Google doesn't piss us off with banners and flash ads and hiding sponsored links as results. Get the hint?

      They also provide us with ads that are relevant to the content of the page, rather then something arbitrary.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      This isn't about advertisers being unhappy, it's about the government being unhappy about monopoly power: Wikipedia article [wikipedia.org]

      • Please inform us as to what part of competition law Google is breaching?

        People who post ads on Google are free to post ads with other engines. People who host Google ads are totally free to host ads form other engines as well. Google does not and never has enforced any kind of non-compete clauses to participate in Adwords in any way.

        • Re: (Score:3, Informative)

          by AlecC (512609)

          Nonetheless, anti-trust law says that someone who already has a large fraction of a market is not allowed to takeover another significant competitor. The principle is that a monopolist can crush competitors by sheer power: while you *can* go to other ad suppliers, if Google has a huge slice of the market, all the advertisers will go to Google and alternatives won't have the ads to place if web-site owners want them.

      • Re: (Score:1, Insightful)

        by Anonymous Coward

        This isn't about advertisers being unhappy, it's about the government being unhappy about monopoly power: Wikipedia article

        But they ignore Vista being bundled. Something in this stinks of politics that has nothing to do with consumer benefit..

    • by Shivetya (243324)

      I am sure that people thought along similar lines when Windows was up and coming too...

      Allowing any one company to dominate is not necessarily a good idea. Especially one who goes out of its way to tell us how nice they are, provided you live in a country they don't fear.

      Besides, banner ads and the like are just noise to many and totally ignored - if not blocked by the likes of us

      • Re: (Score:3, Insightful)

        by sackeri (704269)
        Who is the government protecting in this case exactly? If you believe the Justice Department is involved due to benevolence instead of at the request of another corporation with a larger lobbying group, you are seriously being naive.

        The government is intervening on behalf of microsoft for "the good of the people", no doubt about it.
        • by Jeff Hornby (211519) <{ac.ocitapmys} {ta} {ybnrohtj}> on Wednesday October 15, 2008 @10:09AM (#25382011) Homepage

          Just like they sued Microsoft on behalf of Sun "for the good of the people".

          The justice department doesn't go out and look for these cases. They only get involved after intense lobbying. And given the Google has a monopoly on search (71% sounds low unless they're including sites that index themselves instead of using an outside service) I would say that the Justice department should be keeping an eye on them.

          Not to mention that Google is looking more and more evil despite their cute slogan. They bought DoubleClick. Does anybody think that they did that because they couldn't reporduce DoubleClick's technology? They wanted the DoubleClick databases going back to the early days of the internet. Combine that historical data with all of the data they have about you (almost every search you've ever made, the contents of your mail if you use GMail, the contents of your documents if you use Google Docs, information about your videos if you post them to YouTube, what news you read if you get it from Google News, where you like to go if you use Google Maps, etc.) The information that Google knows about an individual is staggering. It makes the CIA look like a bunch of amateurs.

          But then, Slashdot likes Google.

          • Re: (Score:2, Informative)

            by sackeri (704269)
            The Justice Dept went after Microsoft while under a different administration. When Bush came to power, the whole Microsoft anti-trust case pretty much ran out of gas.

            Google's goal as a company is to index the world's information. I don't see how buying a competitor for their data is evil. They used no government coercion to do so. They played by market rules and bought them in a mutually cooperative deal. How is it any worse if Doubleclick has the data, or Google does?

            If you don't like google, no
            • Google's stated goal is to index the world's data. But there's no profit in that. The real profit is from advertising. The best advertising is targetted. The best targetted advertising comes from knowing as much about the customer as possible. If you look at all of Google's offerings, all of them are about gathering information about you. Notice that Google hasn't entered the gaming market, they haven't entered the development tools environment, they don't have a database offering or an e-mail server

        • by AlecC (512609)

          Who is the government protecting in this case exactly? government is intervening on behalf of microsoft for "the good of the people", no doubt about it.

          Advertisers. If Google is the only source of ads for all the websites in the world, advertisers have to go through Google and pay any price they ask. You need competition in the channels for advertising so that I have more than one place to go to advertise my Viagra.

    • by aredubya74 (266988) on Wednesday October 15, 2008 @09:13AM (#25381471)

      I'm generally wary of monopoly behaviors, but so far, I see nothing monopolistic here. Now, if Google/Yahoo require advertisers who want to run ads on their sites and ad networks to only run on them and nobody else, that's a monopoly practice. It would be equally monpolistic if Google/Yahoo said to a site that wanted to join their ad network "Sure, but you have to sign this agreement that says only Google/Yahoo-networked ads can run on my site". I don't see any such direct allegations though. What am I missing?

      • by gnud (934243)
        I'm not sure you're missing anything -- but that's beside the point. What the russian regulators are saying, is "you already own x% of online russian advertising. Y% is too much - that would make you a monopoly. You can't buy company Z."
    • Re: (Score:2, Interesting)

      Yes, not doing sleazy stuff to the search results certainly helps them dominate search, but I wonder it it is really Page Rank and their patent on it that is to blame for their dominance.

      Maybe indexing the web as well as google without infringing on the page rank patent is impossible.

      Maybe it is possible to be almost as good as google, but the fact that google doesn't actively try to drive it's users away means that there is as yet no compelling reason for users to switch from google.

      It will be very inte

    • Re: (Score:2, Insightful)

      by deadcellplus (952706)

      Sorry advertisers, but we don't want your "product" in the first place. Go bitch to someone who carres.

      Not to troll, but I know plenty of people who have found something they wanted because of advertisements. The issue isn't with advertising its with marketing.

    • While they have a large percentage of the market, this move is actually bolstering their competition by preventing the bottom from falling out of their business. Google knows that competition is what keeps markets strong.

  • by homer_s (799572) on Wednesday October 15, 2008 @08:58AM (#25381357)
    Why are Google's competitors opposing the deal?

    If conventional wisdom about such big mergers - that they will 'corner' the market and increase prices - is correct, then shouldn't the competitors be happy that their competitor will raise prices and hence drive customers to them?

    The obvious conclusion, supported by lots of data for those inclined to look, is that big mergers always increase efficiency and hence reduce prices for the consumer. It is precisely that outcome that terrifies competitors and forces them to rush to government and feign a concern for the well-being of the consumer.

    But why should the new megacorp reduce prices if they have no competitors, you ask? This is only possible if you think that the only competitor to, for example an airline, is another airline. That is false. The airlines compete with cars, trains, USPS, the telephone and lately, in my case, with web-conferencing.

    So it is with *all* other industries.
    • by speroni (1258316)

      You missed a step. The one where Google corners the market, lowers their price and drives all competitors out of business. Then when they have 100% market share they can name any price they want and drastically reduce efficiency.

      Once one company has a certain market share its not really competition anymore, its a monopoly. Is Microsoft's near monopoly causing them to be a terrifically efficient company?

      • by homer_s (799572)
        You missed a step. The one where Google corners the market, lowers their price and drives all competitors out of business. Then when they have 100% market share they can name any price they want and drastically reduce efficiency.

        I think you did not read the latter half of my comment. The one where I explain that a product has more competition that you think.
        Even without that, when the monopoly increases prices, it will attract new investment to take advantage of the high profits. And not even a company
    • Re: (Score:3, Insightful)

      by iamhigh (1252742)
      But in addition to your point - this is the internet!!! It costs $10 to get a domain name, $400 a month for dedicated hosting (or less), and a couple of smart guys can create the website/search engine.

      There is nothing stopping anyone on this site, or anywhere else in the world from directly challenging Google tomorrow. You just can't suck at it *cough*Cuil*cough* - because Google doesn't. This is one case where there seems to be a conclusively better product and, surprise, most people use it!
      • Re: (Score:2, Funny)

        by Anonymous Coward

        But in addition to your point - this is the internet!!! It costs $10 to get a domain name, $400 a month for dedicated hosting (or less), and a couple of smart guys can create the website/search engine.

        This is so true. I really don't get why all serious Search competitors, including Google, invest millions and millions and millions of dollars in distributed server farms, r&d etc. when you can easily beat them from your dorm with a godaddy domain and some brains.

        • I know you said it as a joke, but didn't Google itself start from a garage?

          • That's a good point, but the times and scales were somewhat different. I'm not sure that argument still applies.

            • i am not sure, Google was founded by two very smart founders, who hired the right CEO for the job (Eric Schmitt, a good techie, who also grokked business).

              Google didnt cast smoke and mirrors (cuil bring an example) which fell over.

              I switched to google from altavista all those years ago, because it was fast, clean, and WORKED.

              today, tis still the same story, its fast, clean and works.

      • by Rogerborg (306625)
        That's a ridiculous argument. Are you seriously suggesting that a completely new search engine could burst into an established market, challenge the entrenched incumbents, and grab massive marketshare simply by giving users what they want? That's inconceivable [google.com].
      • I check in on Cuil now and then, and the relevance of their search results has improved dramatically.
        I still hate their layout, though.
      • by bfremon (1128877)
        400$/month is expensive: I got a 2Ghz server with 160 Gb, 1Gb RAM with unlimited bandwidth, and total control for less than 40 euros in France: http://www.dedibox.fr/ [dedibox.fr] I'm sure there are alternatives elsewhere...
    • Re: (Score:1, Insightful)

      by Anonymous Coward

      The obvious conclusion, supported by lots of data for those inclined to look, is that big mergers always increase efficiency and hence reduce prices for the consumer.

      As someone who has worked in server provision for telcos and spent a lot of time around the baby Bells and DECHPaq, all I can say is hahahahahahahahahahahah (because otherwise I would cry).

      Hint: the pissant business class you did at uni gives you performance metrics that have no real bearing on consumer satisfaction.

      • The obvious conclusion, supported by lots of data for those inclined to look, is that big mergers always increase efficiency and hence reduce prices for the consumer.

        As someone who has worked in server provision for telcos and spent a lot of time around the baby Bells and DECHPaq, all I can say is hahahahahahahahahahahah...

        In this case though, the relation to that example is a non-sequitur.

        There is a huge difference between monopolies in the gas/utility market and others, because the the ability of average citizen to regulate the demand is much less. The average person drivers to work and has a phone (land or cell) and would require drastic changes to not have to have either.
        In contrast, the ability to cut google out of my life tomorrow would be like a new years resolution to not eat red meat: I could just stop, I'ld find an

    • by Mr.Ned (79679)

      "The obvious conclusion, supported by lots of data for those inclined to look, is that big mergers always increase efficiency and hence reduce prices for the consumer."

      Counterpoint: cell phone carriers and text messages.

  • by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Wednesday October 15, 2008 @08:58AM (#25381359)

    Is that really something that needs to be regulated?

    • DJI [google.com]

      Is now really a good time to quibble about regulating giant, economy-controlling companies? Yes, regulate those bitches. Small businesses need to advertise, if one company controls the only means to do so on the Internet, they can set the price and make life miserable for lots of people.

  • by thetoadwarrior (1268702) on Wednesday October 15, 2008 @09:11AM (#25381443) Homepage
    But they'll investigate Google after MS cries about fairness?
    • Re: (Score:2, Insightful)

      Ahh yes, +5 insightful for a logical fallacy. The article is about investigating Google for its business practices. Microsoft has nothing to do with this story, and dragging it in is just muddying the waters. Either Google's partnership will cause a suit, or it won't. But what happened with Microsoft has nothing to do with this.

      • Yeah because it's not like MS hasn't been complaining about Google's rise at all. In fact they don't care because they're an OS company and only want to make OSes along with maybe the occasional office suite.

        They certainly have no reason to be threatened by Google or want to dominate search themselves.

        http://www.guardian.co.uk/media/pda/2008/jul/16/microsoftcomplainsaboutgoog [guardian.co.uk]

        From that article:
        Microsoft's general counsel told a congressional committee yesterday that "never before in the history of
    • Re: (Score:3, Insightful)

      by ciroknight (601098)
      Google hasn't paid for half of the Judiciary's law schooling yet, unlike Microsoft who's been churning out lawyers like it's going out of style.

      Microsoft hasn't been a software company for years, they're a law firm.
  • by pjt33 (739471) on Wednesday October 15, 2008 @09:14AM (#25381479)

    Cnet reports that to avoid being sued by the U.S. Justice Department, Google is negotiating with them. The Justice Department and a multistate task force are still reviewing the proposal to decide whether to oppose the partnership.

    "The" proposal? "The" partnership? Don't make me RTFA to work out what you're talking about!

  • by thrillseeker (518224) on Wednesday October 15, 2008 @09:14AM (#25381481)
    The Government has no business in trying to prevent a more efficient business, or even a less efficient business, from forming - that is the job of a free market - which of course our government has strangled already in other areas by forcing risky endeavors. While Google and Yahoo are prevented from doing business, Yahoo is diving deeper and deeper into the dumpster - way to go, "just here to help" government - you're killing the golden geese of the economy.

    Instead, how about trying "lead, follow, or", (best of all), "get out of the way".
    • by dword (735428)
      I'm sorry, but I couldn't help myself from asking: what did you smoke?

      golden geese of the economy

      Wow!

    • by elrous0 (869638) *

      I just love the argument that Wall Street is only in trouble because it was somehow *forced* to be greedy. Yeah, that's the only reason.

      Keep 'em coming, I need more laughs.

  • Cuil (Score:4, Funny)

    by Wiarumas (919682) on Wednesday October 15, 2008 @09:17AM (#25381507)
    Don't worry guys, Cuil will soon dominate the market once everyone realizes how vastly superior it is.
    • TBH, I find Cuil to be a bit rubbish. In theory it's nice but in practice, when searching for anything that isn't quite popular it seems to return some really worthless results.
    • I really liked Clusty, in terms of interface, but it doesn't have a big enough index yet to be competitive. I wonder if archive.org should launch a search engine - they have a huge amount of local data from which to construct an index.
  • over 8 years of extremist neocon rule, somehow starts to act as microsoft attack dog. JUST at the time when microsoft attempt to take over yahoo flops.

    im not surprised.
  • The US Justice department is negotiating a deal with the company that owns the worlds largest information databases. What form do you think their "agreement" is going to take?

    To paraphrase Churchill; This is not the end of Google as we know it. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

  • the DOJ doesn't investigate Microsoft after the flood of incidents involving MS hijacking two standards bodies, funding proxy attacks against other corporations, bribing bloggers and journalists with expensive laptops to write puff pieces about VISTA ... their misdeeds seem to never end. They've proven that ethics is foreign to them.

    But, what can you expect? With all the Congressmen they've bribed on both sides of the isle, and a,fter Bush emasculated the DOJ and made it Microsoft's lapdog, Microsoft has

    • by yukk (638002)
      Ahh, but Microsoft has all the money. That's why the DOJ's punishment of them for monopoly was to make them give away stuff they can't sell to schools and to spread their O/S and office products even further. Now when it's M/S bringing the cash-backed complaints, let's see what happens.
  • Anyone else wonder, if not for a split second, why CNET needed to avoid being sued by the U.S. Justice Department?
  • Don't forget that this comes after last year's $3.1 billion purchase of doubleclick which was under scrutiny because of the power in the online advertising market it gave them and had to be approved by the anti-trust regulators in the US and in Europe.
    I also see they bought a Russian online advertising company a few months ago: http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google [wikipedia.org]
  • The summary refers to stats collected by Hitwise. Where do they get those stats on web usage? From their how-we-do-it [hitwise.com]:

    Hitwise has developed proprietary software that Internet Service Providers (ISPs) use to analyze website usage logs created on their network. The anonymous data sent to Hitwise from the ISPs include a range of industry standard metrics relating to the viewing of websites including page requests, visits and average visit length.

    IOW, your ISP may be sending your clickstream to Hitwise witho

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