Can Anyone Meet Google's Dominance in Advertising?

The Justice Department has hired a litigator to look at going after Google (GOOG) and its growing dominance in advertising.

This isn’t surprising, of course. It’s the yin-yang of American business: We love success stories but we hate too much success.

The problem with going after Google is that unlike Microsoft (MSFT) or earlier monopolies, the industries Google affects handed it its dominance on a silver platter. Google didn’t steal it away. Yahoo (YHOO) went to Google to be rescued from erstwhile monopolist Microsoft and to improve its bottom line by hundreds of millions of dollars.

Newspapers – non-French-speaking ones at least – hire specialists to make their content more attractive to Google and happily take its ads, including this week’s announcement about Google digitizing and monetizing newspaper archives.  This week’s announcement by NBC that it is handing over some ad inventory to Google is also noteworthy. That’s not just about the money. It’s about bringing in a new population of advertisers that big media couldn’t serve (being too big – irony noted).

The agency side of the business, too, is eager to do business with Google. When I interviewed Rishad Tobaccowalla of Publicis’ Denuo for my book, he explained that the giant agency consolidated all its digital divisions so it would have better negotiating leverage with Google, Yahoo, Microsoft, et al — and also so it would gather more data (as Google does) to learn more about users and target ads better.

Yet, Google gobbles up advertising companies, you say. Well, its acquisition of Doubleclick was approved by the government only recently. Has Google gotten too big since then?

I’ve long argued that we do indeed need competition in the ad market, but it’s not going to come from regulation. It’s going to come from getting off our asses and creating those competitors. I said that we need an open-source ad marketplace. Nobody’s heeded that advice. Meanwhile, Glam has built a non-Google network that has grown to gigantic proportions. CEO Samir Arora told me at a Burda party the other night that it now serves more than 80 million uniques worldwide, more than 40 million in the U.S. with brand advertisers. That is a competitor to Google.

Disclosure:  The author is writing a book about Google, What Would Google Do? and owns Google stock.

Comments

[atauber:]

i think that YAHOO will lose if its not approved not GOOG

2008 Sep 10 07:18 AM

[Tom B:]

The DoJ CONVICTED MSFT for REAL, HOSTILE, PREDATORY antitrust behavior and recieved NO penalty. Google is a widley used, USEFUL, well liked entity. I can't imagine antitrust will go anywhere, regardless of the US presidential elections. Bush let MSFT-- McSame would do the same with GOOG. Obama actually knows how to USE the internet; he would see the usefulness of GOOG.

2008 Sep 10 10:30 AM