Re:Google rejects EU's search abuse complaint
by ChuckMcM on Thursday August 27, 2015 @02:01PM
(#10130984)
One of the interesting counter arguments (one in favor of monopoly) is that Google went from spending $337M a quarter on "paid distribution" (paying people to send their search traffic to Google) in Q1 2011, to $968M/qtr for paid distribution in Q4 2014. So Google is spending nearly $4 billion dollars a year to send traffic to their web site.
They can do that because their ad business is very profitable, but how much of that 'value' is because its worthwhile? And how much because its got the most volume?
One argument would be that Google's dominant position in the search advertising market allows them to fund this giant traffic buy, which prevents competitors from entering the search market. That is the classic Sherman Antitrust violation kind of thing in the US (and I believe much of the basis for the US Microsoft case where things were forced to be bundled by OEMs providing windows on their platforms, using Microsoft's dominant OS position to force their browser (internet explorer) on to the masses.
The trick is search an adjacent market to search advertising or the same market? I don't know, I can imagine arguing either side of that question.
Personally, I see Google's eroding CPC numbers as a sign they are losing their dominant position organically. It may not be happening as quickly as some competitors would like but it seems to be consistent. I also see that squeezing margins and driving changes like Alphabet, but that is simply speculation.
As a shareholder I think their decision to 'fight' here is probably not in their best interest long term (so many companies come out the other side of an anti-trust fight damaged for years and years).
They can do that because their ad business is very profitable, but how much of that 'value' is because its worthwhile? And how much because its got the most volume?
One argument would be that Google's dominant position in the search advertising market allows them to fund this giant traffic buy, which prevents competitors from entering the search market. That is the classic Sherman Antitrust violation kind of thing in the US (and I believe much of the basis for the US Microsoft case where things were forced to be bundled by OEMs providing windows on their platforms, using Microsoft's dominant OS position to force their browser (internet explorer) on to the masses.
The trick is search an adjacent market to search advertising or the same market? I don't know, I can imagine arguing either side of that question.
Personally, I see Google's eroding CPC numbers as a sign they are losing their dominant position organically. It may not be happening as quickly as some competitors would like but it seems to be consistent. I also see that squeezing margins and driving changes like Alphabet, but that is simply speculation.
As a shareholder I think their decision to 'fight' here is probably not in their best interest long term (so many companies come out the other side of an anti-trust fight damaged for years and years).