Is Microsoft Talking Smack About Google? Uh, Yeah!

By Clint Boulton  |  Posted 2008-09-18 Print this article Print

Google held one of its Zeitgeist meetings at the company's Mountain View headquarters, with Google CEO Eric Schmidt and co-founders Larry Page and Sergey Brin holding court with the media for a spell.

The interesting news from my perspective came out of this press briefing, where Schmidt apparently said Google was going ahead with the Yahoo deal in the face of scrutiny from the DOJ, the European Union and pretty much anyone with a stake in search advertising that isn't named Google or Yahoo.

Well, that's not really news, is it? Considering how much Google and Yahoo have at stake with what Schmidt deemed a "signed and binding contract," the real news would be that Google and/or Yahoo were walking away from the pact. I don't see that happening. They're both in deep.

I've read reports on the briefing from Reuters and the Wall Street Journal, but my favorite report is from LA Times' Jessica Guynn, who picked up several neat comments from the press briefing.

The juiciest bit was Schmidt's acknowledgment, according to Guynn, that "I am quite sure that Microsoft is helping everyone get upset about things."

That's funny because, that's exactly what my colleagues and I discussed yesterday, though we didn't use ambiguous terms like "upset about things."

Let me translate. That's lawyer speak for "Microsoft is helping everyone realize that this search advertising deal will helps us bolster our ridiculous market lead and crush Yahoo, too." 

Schmidt is intimating that Microsoft, which knows not only what interests the DOJ on the monopoly front but how to stick it to the competition, has planted seeds with groups such as the World Association of Newspapers to oppose the Google-Yahoo deal.

Microsoft actually has said in denouncing the deal that the agreement would consolidate 90 percent of the search ad market into the hands of two: Google and Yahoo. That's the public stance.

In back room conversations, Microsoft likely argues, as WAN certainly did in this "communiqué," that "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."

If Microsoft WAN can convince the DOJ of that, I'm not sure how the powers that be on Capitol Hill will be able to overlook it.

Other notes from Guynn's post:

Schmidt on the economy: "My guess is the drama is in New York, not here. It's business as usual at Google," he said.

What is this "drama?" Schmidt makes it sound like the next episode of the OC (pick your soap opera). As an East Coaster, that's such an insensitive comment that it's laughable. That's also the same sort of Silicon Valley hubris that led to the 2000-2001 Internet bubble burst.

Schmidt on YouTube:

YouTube monetization is a high priority but not the highest priority. It will take some innovation. We are where we should be. We are waiting for the innovations, and the innovations will come. We have our best technical people looking at the new models against this enormous opportunity. We have the luxury of time. That is one of the great things about Google.

That is so arrogant it's not even funny. I don't know that anyone who hasn't solved the video ad challenge can say they have time. How long has Google owned YouTube for? Long enough to solve the monetization challenge, in my opinion.

I suppose Google said "it has time" about social network advertising in 2004 before Facebook came out and constructed a social graph. Was Google even thinking about Orkut in that vein then and why didn't it take the network farther?

Now Google doesn't have a broad social network to stand on; Only Brazil has a love affair with Orkut and OpenSocial is purely connective tissue.

Google won't be so smug when the DOJ strikes down its Googlehoo plan. |

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