Google Trada Investment Smells of Interest Conflict
Google's venture capital arm invested $4.5 million of the $5.75 million in funding
Trada banked July 21 as part of its plan to expand its business overseas.
Trada offers a crowdsourced paid search marketplace for those who want to spend $5,000 to $50,000 per month in advertising online.
Paid search experts help the advertiser come up with a good AdWords campaign and these "optimizers" interface with the ad platforms of Google, Yahoo and Bing to build the campaigns.
The search experts get paid if their client is happy with their results on Google, Bing or Yahoo. And apparently these search experts are good at what they do. An average campaign running in Trada contains more than 6,500 keywords and 110 ads. Wow.
Check out the demo here:
Do you see where Google Ventures is walking a fine line? No? Let me spell it out.
Google, whose search engine is leveraged by millions of businesses to make money and which takes a nice cut of that money, has just invested in a company designed to help people better advertise on Google.
Google is helping advertisers make more money on Google, which will help Google make more money for itself. As Peter Griffin famously said: "Everybody Happy!"
I mentioned this to search expert Greg Sterling, who penned this detailed piece about the company on Search Engine Land after interviewing Trada founder and CEO Niel Robertson.
Sterling was comfortable with the move... so long as Google doesn't buy Trada outright:
Google can't buy these guys for that reason but investing in them doesn't create a conflict unless there's some special treatment that Trada obtains from Google. So far no evidence of that.
Indeed, Google owning a paid search company is something SEL founding editor Danny Sullivan and other SEO experts are often on guard and against.
Sullivan two years ago demanded Google divest itself of DoubleClick's Performix SEO business for the obvious conflict of interest.
Google did sell Performix, but I smell a similar situation here in that Google is pumping money into a firm geared to help businesses help themselves and Google.
It's a fair investment by the rules of business, but one that is unabashedly close to Google's money machine. Moreover, Google Ventures partner Rich Miner gets a seat on Trada's board.
That's what Google's VC firm is for anyway.
Google Ventures allows Google to do due diligence on companies it gives money to, so it is in prime position to buy startups to help boost its business where it sees fit.
My guess is Google won't buy Trada, but it could get some nice insight into the way people are advertising on its platform.
It bears watching. By the way, Foundry Group is kicking in the remaining $1.25 million.