Content Mission: Search Neutrality, The New York Times and Google

I realize this Sunday section I have here on Marketing Pilgrim is supposed to be concentrating on the business of content but I needed to say something about an editorial from this past Wednesday’s New York Times . Since editorials, no matter how ill conceived, are content I will stretch the boundaries of the definition today. The gist of it as follows. Since Google is so big and most people use it for their Internet searches, how do we REALLY know if they are being fair? If we can’t be completely sure should there be some form of government oversight for the engine to ensure its fairness? In political speak, this editorial is about search neutrality. Here is a slice of the editorial When Google was a pure search engine, it was easy to appear agnostic about search results, with no reason to play favorites with one Web site or another. But as Google has branched out into online services from maps and videos to comparison shopping, it has acquired pecuniary incentives to favor its own over rivals. ….the potential impact of Google’s algorithm on the Internet economy is such that it is worth exploring ways to ensure that the editorial policy guiding Google’s tweaks is solely intended to improve the quality of the results and not to help Google’s other businesses. So what this editorial is suggesting is to first follow the path of the European Union’s (EU) European Commission (EC) which has been hounding Google for just about everything as of late. The EC’s intent is clearly to limit Google’s ability to do business in the EU by looking to regulate everything Google does in the name of ‘fairness’. This comes from a group that is looking into Google because of the complaints of spam site producers and inferior search engines . Acting on these types of complaints is the equivalent of validating a street level drug dealer’s claim that the big pharmaceuticals are restricting his ‘trade’. Puh-leeeze. There is even a scenario played in out in this mindless drivel from the Times that half wonders out loud if the government should require Google to make its algorithm public! Some early suggestions for how to accomplish this include having Google explain with some specified level of detail the editorial policy that guides its tweaks. Another would be to give some government commission the power to look at those tweaks. Google provides an incredibly valuable service, and the government must be careful not to stifle its ability to innovate. Forcing it to publish the algorithm or the method it uses to evaluate it would allow every Web site to game the rules in order to climb up the rankings — destroying its value as a search engine. Requiring each algorithm tweak to be approved by regulators could drastically slow down its improvements. Forbidding Google to favor its own services — such as when it offers a Google Map to queries about addresses — might reduce the value of its searches. Notice the wording of ‘might reduce’ or ‘could slow down’ when describing the potential impact of regulating a company like Google. This is the language of an entity that thinks that this may be a viable alternative. Even thinking this way and simply bringing this idea into the realm of this discussion is too much. For now at least, we are a free country and our economy operates on free market principles. While far from perfect I challenge anyone to show me another system that works better. If you have had enough of my rant and would like to hear Google’s opinion of this whole thing then read the piece written by Google’s vice president of search product and user experience, Marissa Mayer, in the Financial Times . It’s worth the look and be sure to read the comments as well because not everyone outside of the New York Times thinks this is a bad idea. So how do you feel about the idea of the government essentially regulating Google? Is it a good thing, a bad thing or nothing? What’s your opinion of the New York Times going down this road? Pilgrim’s Partners: SponsoredReviews.com – Bloggers earn cash, Advertisers build buzz!

European Search Engines Can’t Compete with Google; Whine to EU

Google appears to be in hot water over allegations that it’s deliberately penalizing rival search engines in its search results. The European Commission, Europe’s highest antitrust authority [led by Joaquin Almunia], is currently looking into “some allegations of anticompetitive conduct in relation to search,” Almunia said in his speech in London. Although the work is at an early stage, “I am looking at the allegations very carefully,” given the importance of online search to the marketplace, Almunia added. The commission began investigating Google in late February, spurred on by complaints from three competitors. Two of the competitors are British search engine Foundem and French legal search engine ejustice.fr. Which will likely give Google a strong foundation in any official action. After all, I don’t recall Google complaining that Yahoo and Alta Vista were too dominant and didn’t rank “Google.com” high enough in their search results. You’re either popular or you’re not. What world do we live in where your biggest rival has to help you try and beat it?

Google Looks to Government Help Regarding China

Google has to walk an interesting line at times. It needs to keep itself at arms length from government scrutiny and activity but at the same time needs to be close enough to call on governments (as in worldwide) for assistance. That is certainly the case as Google looks to the US government and European government for help in addressing Internet censorship in China. Google’s woes in China have been well documented and it is one of the rare moments where Google appeared to walked away from a fight. What might have really happened is that they just stepped back to regroup as The Canadian Press reports: Google Inc.’s top lawyer said Wednesday that the world’s leading search engine is asking the U.S. and European governments to press China to lift Internet censorship, describing it as an unfair barrier to free trade. David Drummond told reporters that western states should defend the free trade in information with the same kind of rules that they use to complain of China’s below-cost sale of products. He said government talks are “the only way that it’s going to change, that this tide of censorship or this rising censorship is going to be arrested.” Interesting talk coming from Google but it makes sense to take this approach. Even a company like Google is probably ill equipped to handle taking on the Chinese government on such an issue. Better to let the diplomats take care of this so now Google can stay at arm’s length and not do anything that would set off an international issue. Since being attacked by Chinese hackers that were seeking the Gmail accounts of human rights activists Google has been careful in its talk around China. Since late March, Google has been redirecting search requests from mainland China to Hong Kong, which doesn’t have the same restrictions. “The cyber attack was sort of the final straw because we felt that it was increasingly hard to do business there in accordance with our values,” Drummond said, describing the company as in danger of becoming “part of the same apparatus” of Chinese state censorship. “Censorship, in addition to being a human rights problem, is a trade barrier,” he said. “If you look at what China does — the censorship, of course, is for political purposes but it is also used as a way of keeping multinational companies disadvantaged in the market.” “It should be obvious that the Internet sector is very important to the west and so we should be working on seeing that that kind of trade is protected,” he said. Apparently some support is being offered by the French, German and US governments already, but this is likely to be an ongoing issue for some time to come. If Rome wasn’t built in a day then censorship in China certainly won’t disappear quickly (if ever).

Will Privacy Regulation Reduce Ads’ Effectiveness?

In the European Union, it’s illegal to track consumers online with cookies without their consent (though the opt in/out question is still in the air). A recent study looked at what effect this regulation has had on purchase intent and, therefore, online ad effectiveness—and the results aren’t so pretty. Looking at 3M+ Internet users and nearly 10,000 campaigns over 8 years, researchers asked users if they’d seen the ad and if they’d intended to purchase the product. They then compared the purchase intent based on the responses before and after the EU introduced its behavioral targeting regulations, as well as non-EU users’ purchase intent. MediaPost reports the results : The researchers measured effectiveness by looking at the difference in purchase intent among the two groups. The report authors compared the results for users in EU countries and non-EU countries and concluded that Europe’s laws reduced effectiveness, as measured by purchase intent, by over 65%. Unsurprisingly, sites with more targeted audiences (specialty content sites like travel or parenting sites, vs. general news sites) are less affected by the regulation. Of course, it’s debatable whether it’s the regulation itself or the environment that fostered the regulation that’s affecting customers. Perhaps EU users are just more sensitive about targeting issues, and that’s why the EU already has privacy legislation: Pace University’s Catherine Dwyer speculated that the shift could also have occurred as a result of greater consumer awareness in the EU about targeted ads, and not necessarily because marketers stopped using them. [The University of Toronto's Avi] Goldfarb responds that even if that’s the case, the greater awareness still seemed to come about as a result of regulations, which means that privacy laws contributed to a drop in ads’ effectiveness. The US could soon follow in its footsteps: a bill is slated to be presented to Congress on behavioral targeting privacy soon. But that’s no guarantee the bill will pass. What do you think? Is it privacy regulation or EU users that make the difference?

Google Gives Up on Nexus Webstore

Google is giving up on one of the most revolutionary aspects of its attempt to corner the smartphone market: it’s shuttering its web storefront for selling its Nexus One phone. They’re not abandoning the phone or the attempt altogether—but apparently the demand for a phone absolutely free of contract limitations (and carrier subsidies, and, well, a service provider) wasn’t what they’d anticipated. Initially, the plan was for several carriers to offer month-to-month subscription services, but only T-mobile followed through (Sprint and Verizon initially pledged to offer service, but never followed through). So now Google will work on getting their phone into more carriers’ stores. Once they’ve gotten a number of partners selling their phone, they’ll discontinue the storefront. Instead, Google will be shifting to the model it’s using in Europe. Two weeks ago, Google began offering its phone in Europe through Vodaphone—literally. The European carrier is selling the phone in its stores, on its website and over the phone. Google’s not saying how many Nexus phones it was selling through the storefront, according to CNET . However, initial reports indicated the phone was off to a slow start . Meanwhile, Google’s not abandoning its attack on Apple, either. At the annual shareholder meeting this week, CEO Eric Schmidt characterized Android phones as the antithesis of their competitors, especially Apple’s devices with the company’s iron fist controlling the apps and even developers’ tools available for their platform. Clearly Android will continue to be a major part of their strategy—as well offering a number of Android devices. Google premiered the Nexus One and its storefront in January . Later that month, the FCC sent Google a letter over the company’s high termination/return fee. It’s possible that part of the reason Google’s moving from directly selling the Nexus is to avoid any extra government scrutiny, since it has several other agencies and inquiries pending. What do you think? Is Google trying to avoid government scrutiny, suffering from slow sales, or just not seeing enough support from carriers to make the storefront viable?