TechCrunch, reporting on this morning’s antitrust hearings regarding the Google/Yahoo search deal, ran the following headline: “Google’s Talking Points For Today’s Antitrust Hearings: The Only One Who Won’t Like Our Yahoo Deal Is Microsoft.” I figured I’d go ahead and give the correct headline while I’m at it.
I know that my employer has seen a sharp rise in its AdWords expenses in the past two years, partly because the online advertising laggards took until 2006 to discover paid search and have started bidding one keywords sense and partly because of a phenomenon called “Google Profit Optimization.”
What’s Google Profit Optimization, you ask? Simple. It’s a few automated actions that Google takes to ensure higher profits for Google at the expense of the customer: keyword obfuscation, optimizing placement for high CTR but low performance keywords (Google basically ignores its own Analytics Goals data,) and so forth.
GPO is a phenomenon that only started after Google went public and gained and insurmountable lead in the paid search advertising market, and I think this is a direct result of lack of competition in said market. So back to Google’s talking points for today’s antitrust hearings: Microsoft will be the only one who won’t like our deal? Well, here’s one customer who’s not happy with the deal; keeping Yahoo! out of GOOG hands is the best way to keep Google honest.
If someone, whether it’s Microsoft or not, can finally take the reins away from Jerry Yang and run Yahoo!’s search business with a hint of competence, we might see Google roll back some of its advertiser-gouging policies. The only way paid search advertisers, the people who pay for your free lunch whenever you do a Google search, are going to start getting treated with some more respect is if Yahoo! and Live Search stop losing market share, or if they offer better ROI.
Update: Search Ignite Says the Google Will Raise Yahoo! Search Advertising Rates by 22%. Don’t be evil, indeed.
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