Is this the way to contain Google? Really?
Add the World Association of Newspapers to the list of organizations asking the trustbusters to fight their battle against Google.
I'm going to pass on whether Google is a dangerous monopoly that deserves to get hauled into court. The Justice Department will issue a final yea or nay on that question du jour by early October. In the meantime, the list offor succor gets longer by the day.
The latest is the World Association of Newspapers (aptly named WAN), which represents 77 newspaper associations and 18,000 papers around the globe. WAN wants competition authorities in the U.S. and in Europe to block the Google-Yahoo deal. The position taken by the Paris-based organization offers up a familiar argument. Still, it reveals much the mindset of the people who believe Google is on the verge of becoming dangerously ubiquitous. (The Newspaper Association of America, a group that represents more than 2,000 newspapers in the U.S. and Canada and is a member of WAN, said Monday that its board has not taken a position on the Google-Yahoo ad deal.)
In this case, WAN's particular interest is in making sure its members receive competitive returns for advertising placed on their sites, while getting competitive prices when they buy paid search advertising.
"The proposed deal will fatally weaken Yahoo as a competitor for these deals. Advertisers will increasingly migrate to Google since they will see diminishing price advantages to advertising through Yahoo. Yahoo will then have fewer of its own ads to serve and therefore less ability to offer a better deal than Google. This problem will grow over time because Google - in a clear display of its true intent - has refused to allow Yahoo to show Google ads on the websites of new publishing partners it acquires after the deal is finalized. In other words, Google has imposed a condition that impedes one of Yahoo's last remaining opportunities to compete with Google. What this means for newspapers is that Yahoo's bids for their ad business will almost certainly be lower than they are today."
"What this means for newspapers is that Yahoo's bids for their ad business will almost certainly be lower than they are today. And because Google will almost certainly acquire valuable insider knowledge about Yahoo's ad business, it will be in a much stronger position to predict Yahoo's "best" bid to newspapers for these deals, which will allow Google to bid just slightly over that amount."
But is that really so? Could be, but we're still in the he-said, she-said stage of investigation. The deal hasn't even closed and opinions are flying all over the blogosphere. I don't dismiss WAN's trepidation, but newspapers and advertising concerns--as well as any other business segment that feels threatened by Google's encroachment--surely know this is only a sideshow. Government intervention won't do much, if anything, to slow down the accelerating fragmentation of media.
Yet earlier this summer, WAN President Gavin O'Reilly did not seem overly concerned about the challenge to his industry's old business model when he told a panel at the World Newspaper Congress in Gothenburg, Sweden, the following:
"The fact is that newspapers are winning well in a world of heightened digital fragmentation. In properly assessing the performance of newspapers, one needs to calmly analyse the underlying audience trends for our industry, the quantum of our readership and the quality demographic that we deliver, coupled with the incremental and growing audience that we garner from online. The conclusion is that our industry is extremely well positioned at weathering the storm that is media fragmentation, guaranteeing as we do sizeable, reliable and relatively stable audiences."
As Loren Feldman's sock puppet send-up of Shel Israel is wont to say: Fascinating!