“...the notion of limiting or regulating what Google can show on its [search results pages] is a bad idea. Antitrust law is not supposed to protect companies from competitors but protect the marketplace in general and consumers in particular. Right now there’s no evidence that Google has harmed consumers. And the booming startup market suggests that innovation hasn’t been adversely affected by Google’s rise.”
“Our position then, as it is now, is that there is no antitrust case in paid search due to the way pricing is set in the market for paid search keywords. Google acts as market facilitator, not market enforcer. [...] [Google is] quite transparent when it comes to how they determine Quality Score, and advertisers who do not benefit from this understanding either have not put in the work, or are simply unhappy with the result (they are bidding on irrelevant keywords, which hurts quality score, which raises price – those are the publicized rules of the auction – play or don’t play).”
“The proponents of an antitrust investigation of Googles suggest Google is inhibiting competition by setting up barriers harming consumers. But a close examination of Google's entry into multiple consumer markets illustrates the opposite – that where Google competes, consumers benefit.”
“While the FTC may know things we don't, there is thus far no evidence in the public domain that Google is guilty of violations similar to those of which Microsoft was convicted a dozen years ago. [...] Google's market position was earned precisely because it found a way of ranking search results that is more useful for consumers, and it will quickly lose that position if someone can find an even better ranking algorithm.”
The internet and mobile technology sectors right now are perhaps the most (or among the most) competitive and fast-moving industries EVER TO EXIST. The web and mobile spaces have remarkably low barriers to entry. [...] And we think Google’s AdMob acquisition will have little if any effect on the competitiveness of the mobile advertising market space.
The crucial point here is 1) the marginal advertiser and the marginal developer, not the average or typical advertiser and developer, are who drive the competition, and there will always be a fight for them, especially because of the “long-tail” where lots of niche opportunities exist, and 2) the cost of switching ad networks in a mobile app is close to zero, and the cost of developing an ad network is not terribly high and easily bankrolled.
I didn’t believe competition would be affected adversely and that advertising prices were not likely to go up. Indeed, mobile CPM prices have been falling in mobile. In short I said, yes Google becomes more powerful and effective but the deal doesn’t stifle competition. The market is dynamic and highly competitive, I told the FTC.
I’m no laissez-faire capitalist but I think the mobile ad market is both very young and highly dynamic. It’s evolving quickly and definitely very competitive. If the objective of anti-trust law is to protect competition in the market then it is simply unnecessary for the FTC to intervene at this stage by blocking the AdMob deal.
Two of these people said the FTC staff didn't appear to be taking into account other companies like Millennial Media Inc., Greystripe Inc. and Jumptap Inc., all of which operate in-application advertising networks. By a broader definition, the mobile advertising market also includes corporate behemoths such as Yahoo Inc. (YHOO) and Microsoft Corp. (MSFT), which serve ads displayed on mobile websites.[...]Industry insiders and analysts said an FTC antitrust challenge would be problematic for a number of reasons. One industry source argued that it was a "flawed theory" to distinguish between ads that appear within mobile-phone applications and those displayed on mobile websites. This person said the mobile-advertising market is at such an early stage that it is impossible to predict which companies will emerge on top.Michael Chang, chief executive at Greystripe, acknowledged that the combination of Google and AdMob would create a stronger rival, but he agreed that the market is too new and too dynamic to predict how it will evolve."It definitely creates a stronger competitor, but we're in the second inning and it's going to be a long game," said Chang.
But companies still have to make money, so there are limits to how much they can provide free. Not a problem for Google. Its core advertising business is so powerful, dominant and profitable that it can subsidize almost everything else the company does, using Free to get customers in new markets. Is that fair, when so many of its competitors don't have a similar golden goose at the core of their operations?
The analogy is something like the semiconductor battles of the 1980s, when Japanese companies were accused of "dumping" (selling for under cost) memory chips in the U.S. market to drive out U.S. competitors.
Could Free be OK for little companies, but not really big ones? How much market share would you have to have in one market to disallow you from using Free in another?
As entrepreneur Alex Iskold has pointed out, Google is using the profits from its search advertising dominance to fund its competition with Microsoft in word processors and spreadsheets (Google Docs).Microsoft, meanwhile, is doing just the opposite: using the profits from its dominance of word processors and spreadsheets (Microsoft Office) to subsidize its competition with Google in search (Microsoft Bing). In each case, the companies are using a highly profitable paid product to make another product free, on the hopes of gaining market share by taking price off the table.
