This is a full on rant and I’m not going to cite any sources and I’m not going to back anything up with fact. So hold on for the ride.
My grandfather lay in his hospital bed wanting to tell me one last thing before he passed away from Cancer nearly a decade ago. His final words have resonated in my mind ever since.
He opened his mouth slowly and whispered the words: “History repeats itself”.
At the time I wasn’t totally sure what those words meant. It’s taken nearly a decade to truly appreciate the words. He didn’t mean history literally repeats itself. He meant that the patterns in the world continue to repeat themselves. As a die hard Toronto Maple Leafs fan, history literally repeats itself. We missed the playoffs and we’ll continue miss the cup finals for quite a few more years.
But as a fan of the current internet, and as someone who uses it for work and personal reasons – and envisions it as a sort of public utility – not an advertising utility - the rumored acquisition of Double Click on Friday by none other than Google sets off a tone, and a shriek. History is again repeating itself. And all we can do is sit back for the ride.
But this time it is repeating itself in a far more abraisive way. Will the quality of the internet be consolidated against advertising network revenues in the same manner as Television? Will the specialty channels come at a cost out of our pocket, or will the broadcaster be syndicating the content into one of their big networks?
I’m not about to even speculate about the proportion of the internet that is Ad supported. Most news sites are ad powered, most social networks are ad powered, most help sites are ad powered and etc. etc. etc and even if they are not they have an advertising component. We’re seeing advertising in video games, we’re seeing video games built as advertisements.
Most internet evangelists are not stupid. They realize this. The promote this. They want you to promote this – they make you think it’s better this way – and hence you probably did it that way. Shame, shame, shame – You Just bought into “the Google as an Internet Monopoly theory”.
The implication of Google purchasing Double Click Inc. is that it will create a 85% monopoly on internet advertising. Hence, it may do certain things (AT&T or Microsoft Anti-Trust cases) that do not work in the best interest of consumers. Simply put, Adam Smith’s invisible hand doesn’t work in these markets.
I cannot be more opposed to this idea for quite a few reasons:
Firstly, Google would be able to use their dominant advertising position to channel click throughs (advertising clicks), in a strategic fashion (place ads on appropriate web sites), to point / promote Google properties in which they have high growth targets for that year (EX// Google Reader in 2007). In this manner Google can basically enter any web based market, ensure they have the highest visibility in that market, push real traffic back to their site, and grow inconsequentially huge leaving nothing for the little or even medium sized guys to eat.
Secondly, If I am a web site owner who sells a product (or site) but uses Google’s advertising platform for visibility (as with the 85% rate I have no other reasonable option for advertising). Google may see: me, my target audience, the advertising click through rates, and through that - understand with precision, the nature (vertical) of my site and hence that of my customers (or their interests). They will be able to archive this information then cross reference and aggregate it to understand industry trends in an unparalleled fashion. I see this as being entirely unfair. If one company can house, analyze, and take action on this information then this information must be public for everyone. The competitive advantage is simply too unjust. Sure advertising powers most popular media – but the internet was invented as a place for publishers and authors to share information for free – we cannot forget that.
Thirdly, and I understand what I’m saying isn’t so simple, Google should not be allowed to participate in any other internet spaces other than advertising. Simply put, with their industry metrics – automatically aggregated by vertical - they may see certain trends that we can’t before they even become trends – they will be able to take action in a proactive competitive manner against these trends, and stimy any type of innovation from the little guy.
Finally, (but believe me I’m not even close to finished with this one I’m just tired of ranting), Google has cash. They have a lot of cash. They have so much cash that spending $3.1 billion on DoubleClick isn’t a big deal (but is a super “strong fit” … he he .. sorry had to get that one in). They made this cash off their own advertising platform (I really have to wonder about the skills of the owners of DoubleClick for selling such a valuable property to Google). They will continue to make more and more in revenue as the years go on – especially as the 5% of current advertising dollars being spent on the internet increases. And there is only so long a company can invest in their core before they look for something else to drop their pants for. Believe me, those things are going to be the things that we currently consume at the expense of advertisers: Television, Magazines, Newspapers, and etc.
I can’t wait for the first installment of Hockey Night in Canada, to be delivered over HDNet, where every advertisement on every channel is brought to my by the Google Advertising Kingdom.
So long internet, t’was nice knowing you. Welcome to the Googlenet!
Over and Out