Making Results Better For End Users Isn't Acting Like A Monopolist

from the and-again-and-again-and-again dept

With the Justice Department getting closer and closer to going after Google for supposed antitrust violation, we're going to see more and more articles like the one in the New York Times this weekend that tries to highlight the story of a company "harmed" by Google's market power. In this case, it's the story of a guy who runs a directory site that was based entirely on Google arbitrage. He bought ads on Google's search engine to drive people to his directory page, and then littered the page with AdSense to collect revenue from people clicking through. The NY Times presents this as being somewhat harmful, but I have to side with Jeff Jarvis who doesn't see what Google did wrong.

Google arbitrage sites are a problem for the end user. They're based on the simple concept of forcing people to go an extra click to siphon some money away. If I'm looking for a particular site on Google I don't first want to go to a directory -- I want to go directly to the site. That's true for many, many users -- and Google's efforts in punishing arbitrage sites isn't anticompetitive, it's about improving the user experience, which is something that should be praised, not sued. The only problem noticed in the scenario was that the guy chose a bad business model, where he was totally reliant on a single company for both all of his traffic and all of his revenue. He made the decision to base his entire business on a single supplier, and that supplier has every right to change the terms of its deals in an effort to make a better consumer experience. This isn't Google being anticompetitive -- it's Google serving its customers.
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Filed Under: antitrust, arbitrage, monopoly, search results
Companies: google


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  1. identicon
    DonD, 16 Sep 2008 @ 10:07am

    Google's revenue

    It's important to remember that users are not Google's clients. Advertisers are. Users are simply the commodity Google gathers up like seeds of grain and sells by the ton to advertisers -- its customers. They happen to be very good at this so the advertisers keep coming back. Google's action against an opportunist AdSense re-lister is aimed at protecting the value to their customers -- other advertisers who purchase search linkage -- and not necessarily end users who generate no direct income to the companion an individualized basis.

    Compare this to broadcasting, until-now the dominant ad-revenue model which Google will overtake over time and you can see how a single-source market platform will start to look like a monopoly. Broadcasting never became a monopoly because the justice department kept a close eye on RCA. ABC came into existance when the Feds forced RCA to spin out NBC's "Red" and "Blue" networks into separate entities.

    Could that happen with Google? Would it be necessary?

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