Thursday, September 27, 2007

Our Senate testimony on online advertising and Google-DoubleClick



Later today David Drummond, our Senior VP for Corporate Development and Chief Legal Officer, will take to Capitol Hill to testify before the Senate Judiciary Committee about the latest developments in the online advertising industry, including our acquisition of DoubleClick. You can read David's complete testimony here.

David will tell the committee about some of the benefits of online advertising generally:

"The online advertising business is complex, but my message to you today is simple: Online advertising benefits consumers, promotes free speech, and helps small businesses succeed. Google’s acquisition of DoubleClick will help advance these goals while protecting consumer privacy and enabling greater innovation, competition, and growth."

"In our experience, our users value the advertisements that we deliver along with search results and other web content because the ads help connect them to the information, products, and services they seek. Simply put, advertising is information, and relevant advertising is information that is useful to consumers. The advertising we deliver to our users complements the natural search results that we provide, because our users are often searching for products and services that our advertisers offer. Making this connection is critical. In fact, we strive to deliver the ads that are the most relevant to our users, not just the ones that generate the most revenue for us."

He'll also talk a bit about the competitiveness of the online ad space:

"Some have asked whether this acquisition raises competition concerns. We are confident – and numerous independent analysts have agreed – that our purchase of DoubleClick does not raise antitrust issues because of one simple fact: Google and DoubleClick are complementary businesses, and do not compete with each other. DoubleClick does not buy ads, sell ads, or buy or sell advertising space. All it does is provide the technology to enable advertisers and publishers to deliver ads once they have come to terms, and provide advertisers and publishers statistics relating to the ads."

"The simplest way to look at this is by way of analogy. DoubleClick is to Google what FedEx or UPS is to Amazon.com. Our current business involves primarily the selling of text-based ads – books in our analogy. By contrast, DoubleClick's business at its core is to deliver and report on display ads."

"Our acquisition of DoubleClick does not foreclose other companies from competing in the online advertising space. Rather, the transaction is just one of several that underscore the strong competition in the online advertising space...Each of the acquisitions following our purchase of DoubleClick demonstrates that there are many sophisticated, well-financed, and competitive companies that believe that the online advertising space merits more investment and remains open to strong competition."


And since some have raised questions about privacy in connection with this acquisition, he'll address those issues as well:

"Google's bottom line is this: We believe deeply in protecting online users’ privacy, and we have a strong track record of doing so. We are constantly working to innovate in our privacy practices and policies. Some have asked questions about privacy protections in connection with the DoubleClick acquisition, but for us privacy does not begin or end with our purchase of DoubleClick. Privacy is a user interest that we've been protecting since our inception."

"We make privacy a priority because our business depends on it. If our users are uncomfortable with how we manage the information they provide to us, they are only one click away from switching to a competitor’s services. If you don't believe me, recall that before Google, users clicked on an earlier generation of search engines like Excite, Altavista, Lycos, and Infoseek – each extremely popular in its time. User interests effectively regulate our behavior, and user trust is a critical component of our business model."


You can read more about why we decided to buy DoubleClick, some of the recent steps we've taken to strengthen privacy, and the recent flurry of online ad acquisitions. Here's also some background on the acquisition, and comments that newspapers, independent analysts, and advertising industry leaders have made about this acquisition. Watch this space later for video from the hearing.

UPDATE (6:17 p.m. ET): Check out video below of David Drummond's testimony:

9 comments:

gattox said...

If DoubleClick is to Google what FedEX *or* UPS are to Amazon considere this. If, as a paradox, Amazon ships 90% of all goods in the world, acquiring for example FedEX instead of UPS should completely overkill UPS, because all Amazon goods would be delivered by FedEX and surely not UPS. Not the best example to mention, at least for me.

Sharon said...

Why does not the Microsoft purchase of aQuantive (a competitor of Doubleclick), come under the same scrutiny as the proposed Google/Doubleclick aquisition?

Prplpiper
S.Epstein

Alec said...

Re: gattox
That may be true, but antitrust laws don't prevent those types of monopolies.

Ghosty said...

Re: gattox

Not the best example. Other click agents are not denied business by DoubleClick being owned by Google. Google may serve 90% of all online advertising (just using your number for the argument), but that doesn't mean there's only 10% to be had by anyone else. Adverts are not books.

Sridhar Turaga said...

What if Amazon buys FedEx and decides to delay deliveries from BarnesandNobles just a little bit?

What if Amazon tracks what books are being delivered to whom by Borders ... and use that information?

Google can use the information by their competitors in internet marketing (so what if it is non-text) ... as they now control the last mile for all them.

Bad analogy ...

Also references to Google only being text ads is a mistake ... leaving the door open for future litigation, even if they get through now, if Google allows non-text ads ...

Very sloppy work ... Al-mighty Google ... you need a better lawyer ...

Gamer Joe said...

So... what would be a better analogy for this?

Sridhar Turaga said...

The fundamental issue for Google is that using an argument that DoubleClick is complimentary to it's business is flawed ... because both are online advertising and both control majority of their focus segments.

Arguments can probably be best centered around how Google has lowered the cost of customer acquisition for Small and Medium businesses ... and given consumer easy access to the best deals ... and with it's PageRank algorithm does not allow the biggest spender to dominate either PPC or SEO ... and they can bring similar benefits into the DoubleClick network. Currently DoubleClick's services are dominated by the large advertisers as they out bid all the small ones ... Google can now democratize them for rest of the segments.

I personally think that is the true contribution of Google to the advertising world ... and they should use that to anchor all their arguments.

Then may be better analogies would fall out of that argument.

MAYBEDAZE said...

LETS LAY THE GROUNDWORK FOR A BIG WHAT IF THAT ACTUALLY HAPPENED TO ME OVER THE COARSE OF THE LAST 2 WEEKS RELATING TO HOW GOOGLE ADVERTIZERS ARE OVERSTEPPING THE BOUNDS OF ETHICS....I CONTACTED THE HOME PAGE OF HOMESANDLAND.COM TO REQUEST A PUBLICATIONS THAT WAS NOT LISTED ON THEIR WEBSITE BUT THAT I BELEIVED THEY PUBLISHED BECAUSE I HAD ACCESS TO AN OUT OF DATE COPY. I LEFT ME WORK TEL# ONLY ON THEIR SITE. THE FOLLOWING MONDAY I GET A CALL AT WORK. THE REP AT HOMEAND LAND TOLD ME THAT SHE WOWLD SEND ME SOME INFORMATION THROUGH THE MAIL (I GAVE HER MY PO BOX ADDRESS) AND EXPECTED TO RECEIVE SOME PAMPHLETS. I NEVER EXPECTED TO RECIEVE FIVE OTHER PHONE CALLS THAT DAY FOLLOWED BY APPROX 1 A DAY SINCE. THE MOST TROUBLESOME CALLS ARE THE CALLS I RECIEVED FROM COMPANIES THAT PITCH A QUICK FIX TO REPAIR MY BROKEN CREDIT WHILE THERE IS STILL TIME! I DIDN'T KNOW MY CREDIT WAS BROKEN..HOW DO THEY KNOW IF IT WAS OR WASN'T. THE AUTO DIALERS MESSAGES AT THESE COMPANIES TELL YOU TO ENTER OPTION#1 TO SPEAK TO AN EMPLOYEE THAT WILL ASSIT ME TO GET MY CREDIT BACK ON TRACK BUT THEN LINE GOES DEAD WHEN YOU PRESS THAT OPTION...EVERY TIME. IHAVE HAD A TOTLA OF 6 CALLS FROM TWO DIFFERENT CREDIT COMPANIES SO FAR. TRACK...HOWEVER...THIS IS GETTING TO BIG BROTHER FOR ME!...WAIT WHAT HAPPENS NEXT...I GET AN E-MAIL FROM MY MANAGER WHO INFORMS ME THAT I MUST NOT USE MY BUSINESS PHONE FOR PERSONAL CALLS, IT IS TAKING AWAY FROM MY PRODUCTION TIME; I AM WAISITNG COMPANY TIME ON PERSONAL CALLS AND IF IT CONTINUES I WILL BE WRITTEN UP. THIS IS NOT GOOD...I GUESS SHE DIN'T LISTEN IN ON CALLS FROM THE CREDIT REPAIR SERVICE...OR SHE WILL ASSUME I HAVE POOR CREDIT; MY EMPLOYER DOESN'T NOT ALLOW PEOPLE TO WORK FOR THEM WHO HAVE POOR CREDIT. YOU WOULD BE CLASSIFIED A SECURITY RISK AND BE SUBJECT TO TERMINATION!
IF YOU ACCESS THE HOMEANDLAND.COME..YOU WILL SEE ALL THE ADVERTISERS FOR CREDIT REPAIR POSTED ON THE RIGHT OF THE SCREEN. IF I NEEDED OR WANTED TO REPAIR MY CREDIT I WOULD LOG INTO ONE OF THESE SITES...I DONT' AND I DIDN'T! HOWEVER, EITHER LANDAND HOMES.COM OR GOOGLE THINKS IT IS PERFECTLY OK THAT ONCE I INITIATE THE CONTACT WITH ONE OF THEIR CLIENTS/ADVERTISERS THAT NOW I AM FAIR GAME.....I AM UPSET OVER THIS VIOLATION OF MY PRIVACY/MY WORK PLACE ENVRINMENT AND EVEN POSSIBLY MY LIVELYHOOD.
GOOGLE...DO YOU READ! CONCIDER THE CONSEQUENCES OF YOUR ACTIONS AND POLICIES.....

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