Scott+Cleland

Anti-Americanism - Barack Obama - Business - Censorship - Democrats/Leftists - Economy/Finances - Free Speech - Free Trade - Google - Inernet - Journalism - Liberals - Media Bias - President - Scott Cleland - Security/Safety - Socialism - Society/Culture - Technology

Why New WH Cybersecurity Focus is a Game-Changer — for the Internet and Net Neutrality

June 6, 2009 by

-By Scott Cleland

President Obama’s new approach to cybersecurity likely is more of an Internet game-changer than many appreciate. Initial reporting and commentary has been superficial and has not connected dots or analyzed the broader logical implications of this new policy emphasis and trajectory.

Why is it a game-changer for the Internet?

  • First, it formalizes a new leading priority for the Internet.
  • Second, it formalizes the lack of cybersecurity as the Internet’s leading problem.
  • Third, it practically redefines what “open Internet” means.
  • Fourth, it practically takes any extreme form of net neutrality off the table.

Moreover, the new cybersecurity focus will likely have a practical effect on the trajectory of Internet 3.0, which embodies cloud computing (where security has not been a primary priority by many); the Mobile web (where security has always been a very high priority); and the Internet of Things (where security will be imperative to prevent theft, intrusion, and sabotage).

Continue reading “

Why New WH Cybersecurity Focus is a Game-Changer — for the Internet and Net Neutrality”

Congress - Democrats/Leftists - Economy/Finances - Google - Inernet - Scott Cleland - Society/Culture - Taxes - Technology

EC declares “no need for State intervention” in broadband duopoly

June 3, 2009 by

…because there’s no market failure

-By Scott Cleland

In a significant blow to U.S. advocates of Government-mandated open access networks — over facilities-based broadband network competition — the European Commission (EC) just declared “no need for State intervention” in geographic zones where there are at least two facilities-based broadband network competitors, because that means “there is no market failure.”

The EC made the declaration in its just-released report: “Community Guidelines for the application of State aid rules in relation to rapid deployment of broadband networks.” This is the EC guidance for spending economic stimulus funds for promoting broadband.

Continue reading “

EC declares “no need for State intervention” in broadband duopoly”

Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Liberals - Scott Cleland - Society/Culture - Technology

Latest Data: US No Longer Falling Behind on Broadband

May 26, 2009 by

-By Scott Cleland

The latest data from the OECD and other sources indicate that the U.S. is no longer falling behind the rest of the world in broadband.

These latest data are relevant to assumptions underlying the FCC’s National Broadband Strategy due to Congress next February and also to broadband policymakers’ interest in more data-driven policymaking.

In particular, the OECD broadband rankings have been prominently cited by some as important evidence to justify a reversal of current facilities-based broadband competition policy, in favor of a more government-centered broadband policy.
Continue reading “

Latest Data: US No Longer Falling Behind on Broadband”

Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Jobs - Liberals - Scott Cleland - Society/Culture - Technology

Why the Australian “Fiber Mae” Broadband Model Doesn’t Work for the U.S.

May 18, 2009 by

-By Scott Cleland

As the FCC lays the groundwork for its submission of a National Broadband Strategy to Congress next February, some suggest the U.S. follow the lead of Australia’s new broadband policy model. While it may have superficial and nostalgic appeal to some, upon close scrutiny and analysis it is not an applicable, practical nor sound broadband policy option for the United States for a variety of reasons. The Australian “Fiber Mae” broadband policy model is:

  • Not applicable to the U.S. because the ownership and competitive baselines in Australia and the U.S. are not analogous;
  • Not practical for the U.S. because it is a hugely expensive proposal in an exceedingly tight budget/financial environment that would generate very little incremental additional benefit over the current competitive trajectory; and
  • Not sound policy for the U.S. because it pursues the wrong policy emphasis and structure, which could have the perverse result of the U.S. falling behind in broadband leadership — the exact opposite of the intended result.

By way of background, the Australian government announced last month that it would establish “a new company to build and operate a new super-fast National Broadband Network.” The proposal would deploy fiber to the home to 90% of users with 100 Mbs, and deploy 12 Mbs wireless technology to the remaining 10% of the country, at an estimated total cost of ~$31b or ~$4,100 per home passed. This government-sponsored enterprise would be majority-owned by the Australian government. It would create “Australia’s first national wholesale only, open access broadband network.”
Continue reading “

Why the Australian “Fiber Mae” Broadband Model Doesn’t Work for the U.S.”

Business - Congress - Democrats/Leftists - Economy/Finances - Google - Inernet - Liberals - Scott Cleland - Society/Culture - Technology

The Broader Implications of DOJ’s Book Settlement Investigation

May 5, 2009 by

-By Scott Cleland

The DOJ investigation of the Google Book Settlement suggests that a broader antitrust spotlight may be returning to Google.

Apparently the DOJ is investigating whether the Book Settlement sets a competitive or anti-competitive trajectory for the search of digitized books, and of “orphan” works in particular.

Google argues the settlement is pro-competitive and increases access to books.

The DOJ’s antitrust investigative scrutiny suggests otherwise.
Continue reading “

The Broader Implications of DOJ’s Book Settlement Investigation”

Business - Congress - Democrats/Leftists - Economy/Finances - Google - Inernet - Scott Cleland - Society/Culture - Technology

Implications of Skype’s IPO for eBay-Skype & Wireless Net Neutrality

April 22, 2009 by

-By Scott Cleland

Given that eBay’s announced spin-off/IPO of Skype in 2010 is a material market event, this high-profile IPO represents a potentially tectonic development in eBay-Skype’s (and FreePress‘) push for wireless net neutrality/Carterfone regulations and applying the FCC’s broadband principles to wireless providers for the first time. There are much broader implications of this market development than many appreciate.

Some brief background information is helpful to understand the broader implications:

Reports suggest that eBay’s plans for a public IPO in 2010 are a result of eBay not being able to get a high enough private market price ($1.7b) for Skype and the fact that current market conditions are not ripe for initial public offerings. (eBay originally paid $2.6b for Skype and added an additional $500m later, then subsequently wrote down $1.4b of Skype’s value.)
Continue reading “

Implications of Skype’s IPO for eBay-Skype & Wireless Net Neutrality”

Business - Congress - Democrats/Leftists - Economy/Finances - Google - Inernet - Liberals - Media Bias - Scott Cleland - Socialism - Society/Culture - Technology

Skype’s Anti-competitive Uneconomics

April 11, 2009 by

-By Scott Cleland

There are two primary problems with eBay-Skype’s attempt to get the Government to force competitive wireless providers to carry Skype’s free communications app under the guise of wireless net neutrality and Internet openness: first, it is wildly uneconomic, and second, it is anti-competitive.

The issue has surfaced in the news (USAToday, WSJ) as Apple enabled a Skype app on the iPhone for use on free public WiFi networks, but not on the iphone’s commercial network provided by AT&T; and again when Google’s Android banned a tethering app because it violated T-Mobile’s terms of service as reported by CNET.
Continue reading “

Skype’s Anti-competitive Uneconomics”

Business - Censorship - Congress - Crime - Economy/Finances - Google - Inernet - Jobs - Liberals - Media Bias - Scott Cleland - Socialism - Taxes - Technology

Building upon a Strong Broadband Foundation — Part I in America’s Broadband Strengths Series

April 4, 2009 by

-By Scott Cleland

The combination of the severe recession and Congress’ requirement for the FCC to devise a National Broadband Strategy provides an excellent opportunity to inventory not only weaknesses, but also the many strengths, of the broadband sector and economy. Comprehensive analysis shows much that is going well that mustn’t be taken for granted in any new broadband plans. Unlike many other sectors of the economy, the American broadband sector is:

  • An exceptionally strong foundation to build upon;
  • On the right track with much positive momentum; and
  • Partnering to solve many of society’s most pressing problems.

I. Strong Foundation to Build Upon

America’s competitive broadband market has an exceptionally strong foundation of positives on which to build upon, enhance, expand and supplement.
Continue reading “

Building upon a Strong Broadband Foundation — Part I in America’s Broadband Strengths Series”

Barack Obama - Business - Censorship - Democrats/Leftists - Economy/Finances - Google - Inernet - Liberals - Media Bias - Scott Cleland - Society/Culture - Technology

The Flawed Economics of Broadband Open Access in the U.S.

March 22, 2009 by

-By Scott Cleland

A post by a Google policy analyst yesterday attempted to make the economic case for open access in the U.S. and suggested reasons why American infrastructure providers should embrace a mandated open network model. This proposed theory warrants a strong practical rebuttal. The proposed case for the economics of open access does not hold up to close scrutiny because it has fatal flaws in both logic and economics.

I. The fatal flaw in logic in the case for the economics of open access:

Since the post assumes broadband markets everywhere are basically the same, it concludes that the open access experience in some European countries is relevant and applicable to the U.S. situation. The fatal flaw in logic here is the core assumption that European and U.S. markets are factually analogous. They are not. They are substantially different factually and structurally as I will explain in detail.
Continue reading “

The Flawed Economics of Broadband Open Access in the U.S.”

Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Liberals - Media Bias - Scott Cleland - Society/Culture - Technology

U.S. Leads World in Broadband Affordability per New ITU Data — Competition Works!

March 11, 2009 by

-By Scott Cleland

America’s longstanding bipartisan policy commitment to promote broadband competition has succeeded in making broadband more affordable in the U.S. than in any other country in the world according to the ITU.

Data in a broad new study by the International Telecommunications Union (ITU) of 150 countries, show the U.S. leads the world by a substantial margin with the lowest broadband prices as a percentage of per capita GNI. (See the tables on pages 56 and 66.)

Continue reading “

U.S. Leads World in Broadband Affordability per New ITU Data — Competition Works!”

00Publius Contributor - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

An Internet Economy or “Ecommony?” Growing pushback against ‘Information wants to be free’

March 3, 2009 by 1 Comment

-By Scott Cleland

The recession has created new urgency for multiple content industries to find a better way to protect and monetize their property/content in the digital world. The dot-com bubble ethos that “information wants to be free” is like a gross mold destroying the incentives to create valuable content and distribute it digitally. (Be sure not to miss the shocking analysis at the end of this e-mail comparing revenue generation per user in the digital “ecommony” versus the real economy.)

The first point of this e-mail is to connect-the-dots about why several content industries are currently in the news, actively pushing back against the “ecommony” anti-business model, where content owners are expected to essentially give away their valuable content to the open Internet/digital commons without the requirement of permission or payment.
Continue reading “

An Internet Economy or “Ecommony?” Growing pushback against ‘Information wants to be free’”

00Publius Contributor - Business - Censorship - Congress - Democrats/Leftists - Economy/Finances - Google - Inernet - Liberals - Media Bias - News - Scott Cleland - Society/Culture - Technology

The Growing Privacy-Publicacy Fault-line — The Tension Underneath World Data Privacy Day

February 4, 2009 by

-By Scott Cleland

Given that January 28 was World Data Privacy Day, its instructive to examine why there is such increasing tension underneath the surface of the Internet over the issue of privacy. I believe there is a growing “fault line” between two opposing tectonic forces — one that believes in online privacy and the other which believes in the opposite — online publicacy.

I coined the term “publicacy” in my July 2008 House testimony on online privacy because Internet technology has created the need for an antonym to describe the opposite of privacy. Many in the Web 2.0 community believe in the “publicacy ethos” where if technology innovation can make information public, it should be public and that there should be no permission or payment required to access, use or remix this new “public”‘ information.
Continue reading “The Growing Privacy-Publicacy Fault-line — The Tension Underneath World Data Privacy Day”

00Publius Contributor - Business - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Taxes - Technology

Why net neutrality regulation would undercut Universal Broadband progress

January 23, 2009 by

-By Scott Cleland

The start of robust broadband deployment in the U.S. was delayed for several years in the late 1990’s because of regulatory uncertainty over whether broadband investment could earn a competitive return.

Today’s release of the proposed economic stimulus package is extremely relevant to the question of investment in Universal Broadband; it says: “For every dollar invested in broadband, the economy sees a ten-fold return on that investment.”

Recent guidance from the Obama transition team spearheading the Universal Broadband effort is also encouraging. At the State of the Net Conference, Blair Levin said: “You don’t want to do anything that makes a competitive market more difficult.”
Continue reading “Why net neutrality regulation would undercut Universal Broadband progress”

00Publius Contributor - Business - Democrats/Leftists - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

Net Neutrality’s Chill on a Free Market Internet — Google’s OpenEdge Caching in Context

December 22, 2008 by

-By Scott Cleland

Calls for preemptive sweeping regulation can have a way of backfiring, impeding common sense, and discouraging sound market outcomes. Take Net neutrality.

Today’s Wall Street Journal front page story “Google wants its own fast track on the web” reports on:

Google’s secret “OpenEdge” request to ISPs to colocate Google servers on ISP premises in order to speed up Google’s network and reduce Google’s traffic burden on the Internet; and also How the special request appears to signal waning support by Google of net neutrality legislation/regulation.
Continue reading “Net Neutrality’s Chill on a Free Market Internet — Google’s OpenEdge Caching in Context”

00Publius Contributor - Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

Google uses 21 times more bandwidth than it pays for — per first-ever research study

December 9, 2008 by

-By Scott Cleland

Below is the press release for the first-ever research study of U.S. Consumer Internet Usage and Cost which I authored.

The 27 page research study can be accessed at this link:

http://www.netcompetition.org/study_of_google_internet_usage_costs2.pdf

For Immediate Release December 4, 2008

Contact: Scott Cleland 703-217-2407

First-Ever Study of U.S. Consumer Internet Usage and Cost Finds Google Uses 21 Times More Bandwidth than it Pays For

Google uses 16.5% of U.S. consumer Internet capacity today, rising to an estimated 37% in 2010
Continue reading “Google uses 21 times more bandwidth than it pays for — per first-ever research study”

00Publius Contributor - Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Privacy - Scott Cleland - Society/Culture - Technology - The Law

Why Google lost the formal debate over its ethics — And a compendium of Google’s ethical lapses

November 28, 2008 by 1 Comment

-By Scott Cleland

Google effectively lost its first formal debate over whether “Google violates its own ‘Don’t Be Evil’ motto” at the Rosenkranz Foundation’s Oxford-style debate in New York City, November 18. (Transcript here)

Before the debate the audience was polled and voted 21% against Google and 48% for Google; after gathering additional insight from the debate, 47% voted against Google and 47% voted for Google. Apparently, most all of the undecideds voted against Google — that Google violated their own ‘don’t be evil’ motto.

What does this mean?
Continue reading “Why Google lost the formal debate over its ethics — And a compendium of Google’s ethical lapses”

00Publius Contributor - Business - Congress - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - President - Scott Cleland - Society/Culture - Technology

An Unrepentant Google Basically Taunts DOJ/State AGs to File an Antitrust Suit in the Future

November 13, 2008 by

-By Scott Cleland

Google remains its own worst enemy

After dodging a certain DOJ antitrust suit from the most lenient antitrust enforcer in the modern era by withdrawing from the Yahoo ad agreement, Google’s CEO essentially spit at DOJ/State AG prosecutors by publicly and gratuitously saying: Google would have beaten the DOJ in court, nothing has changed, and that they were happy they reached out to Yahoo.
Continue reading “An Unrepentant Google Basically Taunts DOJ/State AGs to File an Antitrust Suit in the Future”

00Publius Contributor - Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Technology

Google Proves Crime Does Pay – If You Have Enough Market Power

November 2, 2008 by

-By Scott Cleland

Google, in settling with authors/publishers for $125m in their copyright infringement lawsuits, has cleverly leveraged its market power to tip, and lock in, another Internet segment to de facto Google monopoly control — access to most of the world’s books online. The untold story here is how this settlement:

  • Enthrones Google as the de facto gatekeeper to access most of the world’s books online;
  • Establishes a “new model” for online content distribution;
  • Attempts to set precedent that leveraging market power to extract monopoly rents in an adjacent market is OK; and
  • Positions Google to become the world’s omni-platform for media distribution that will wipe out traditional media competition, unless antitrust enforcement ensures media distribution competition survives.

Why does crime pay for Google?
Continue reading “Google Proves Crime Does Pay – If You Have Enough Market Power”

00Publius Contributor - Business - Economy/Finances - Google - Inernet - News - Scott Cleland - Technology

What Google earnings say about Google-Yahoo; pricing power & a ‘derivative problem’

October 21, 2008 by

-By Scott Cleland

Google’s earnings provide an excellent window into why the DOJ has serious antitrust concerns with the proposed ad partnership between Google and Yahoo.

Google’s discussion of its 4Q08 earnings provides DOJ with substantial fresh evidence that Google is:

  • Exercising substantial pricing power;
  • Not running fair and competitive ‘auctions’; and
  • Anti-competitively self-dealing.

I. Pricing Power Evidence:

Any economist will explain revenue is simply volume times price. In 4Q08, virtually all of Google’s revenues continued to come from search monetization. Google reported that its ‘volume’ i.e. “aggregate paid clicks,” “increased approximately 18%” over 3Q07. Google reported that ‘revenues’ increased by 31% over 3Q07.
Continue reading “What Google earnings say about Google-Yahoo; pricing power & a ‘derivative problem’”

00Publius Contributor - Business - Democrats/Leftists - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

Why eBay’s deals stoke Google-Yahoo investigation fire — less competition among friends?

October 12, 2008 by

-By Scott Cleland

Just when the DOJ is investigating if the Google-Yahoo ad partnership is anti-competitive, eBay bursts onto the antitrust stage with “investigate us too!” acquisitions of Bill Me Later and more classified ad businesses. (See NYT article and post, and WSJ article for excellent background.)

Why are the eBay acquisitions relevant to the Google-Yahoo investigation?

First, they spotlight how dominant and incestuously interdependent the primary Internet players are.

Continue reading “Why eBay’s deals stoke Google-Yahoo investigation fire — less competition among friends?”

00Publius Contributor - Congress - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Socialism - Society/Culture - Technology

Googleopoly III – Dependency – Crux of the Google-Yahoo Problem

October 9, 2008 by

-By Scott Cleland

I wrote a new white paper, Googleopoly III, to answer the core question in the Google-Yahoo deal: Would Yahoo compete as vigorously with Google post agreement?

My detailed analysis concludes Yahoo would not compete as vigorously, because the deal would make Google Yahoo’s single most important business relationship — effectively making Yahoo financially, operationally and strategically dependent on Google.

I also describe the agreement as a “Hotel California deal” where Yahoo could check out but never leave…

Continue reading “Googleopoly III – Dependency – Crux of the Google-Yahoo Problem”

00Publius Contributor - Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

The Privacy Problem is Unauthorized Tracking

September 29, 2008 by

-By Scott Cleland

The Privacy Solution is a Meaningful Consent Standard

There was a major tectonic shift in the Internet privacy debate today at the Senate Commerce Committee hearing on Internet privacy.

Surprisingly strong consensus emerged surrounding Internet privacy that:

  • Behavioral Advertising did have value;
  • Technology is not the privacy problem with behavioral advertising;
  • The privacy problem is lack of advance meaningful consent by consumers to track their Internet movements and to use their private information; and
  • Any privacy effort must comprehensively include all Internet players using any Internet technology because consumers don’t care about the technology being used—they just care about their privacy being abused.

AT&T, Verizon and Time Warner, three of the four largest American ISPs, all agreed in their collective testimony that any behavioral advertising should involve “meaningful consent” by consumers, meaning the customer:
Continue reading “The Privacy Problem is Unauthorized Tracking”

00Publius Contributor - Business - Democrats/Leftists - Economy/Finances - Google - Inernet - News - Scott Cleland - Technology

Googleopoly II: Google’s Predatory Playbook to Thwart Competition — a new White Paper

September 28, 2008 by

-By Scott Cleland

My new Googleoply II White Paper (see www.googleopoly.net) identifies and documents the twenty-six sources of Google’s market power and the five different anti-competitive strategies Google employs to foreclose competition.

This original and trenchant analysis brings into sharp focus the moorings of a potential antitrust case against the Google-Yahoo ad pact. The White Paper also should give pause to even the biggest apologists and cheerleaders for Google — if they are ‘open’ to reading it. Simply, it is a must-read piece for anyone trying to understand why the DOJ’s investigation of the proposed Google-DoubleClick is so serious and important.

Continue reading “Googleopoly II: Google’s Predatory Playbook to Thwart Competition — a new White Paper”

00Publius Contributor - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

Exposing the Biases in the Broadband Policy Debate — My new white paper

September 17, 2008 by

-By Scott Cleland

Invited to speak at the ITIF forum on ITIF’s white paper, “It’s Time to End the Broadband Policy Wars”, I so strongly disagreed with the framing bias of that white paper and the broadband policy debate in general that I decided I needed to counter it by writing my own white paper:

Don’t be Fooled by the National Broadband Policy “Straw Man”
Exposing Three Hidden Policy Biases of Broadband Policy Proponents

The abstract of my six page paper is below:

Abstract: Don’t be fooled by the straw man argument and hidden biases in the assumptions undergirding the call for a more government-centric national broadband policy. Their argument cannot withstand common sense, penetrating analysis, or ‘open’ public scrutiny. There are at least three major hidden biases in their pillar assumptions, that when exposed, make it clear that proponents of a more government-centric national broadband policy need to go back to the drawing board to find a legitimate rationale for their policy approach.
Continue reading “Exposing the Biases in the Broadband Policy Debate — My new white paper”

00Publius Contributor - Business - Democrats/Leftists - Economy/Finances - Google - Inernet - Media Bias - News - Scott Cleland - Socialism - Society/Culture - Technology

Google’s dominance grows, But Don’t forget DOJ investigation

September 9, 2008 by

-By Scott Cleland

Google’s online advertising dominance grows — Don’t forget the pending DOJ investigation…

Google’s dominance of the Internet’s business model for monetizing content only grows.

“Gap widens in online advertising: Rivals struggle to catch up to Google as buyers favor search over display” reports Jessica Vascellaro in the Wall Street Journal.

The article’s conclusion is dead on and ominous — the gap between Google and its competitors in online advertising is widening and will continue to do so because the business that Google dominates, search advertising, is growing significantly faster than display advertising is.

While the article focused on the different growth rates of online advertising, the article missed the opportunity to highlight what else the numbers tell us:

Continue reading “Google’s dominance grows, But Don’t forget DOJ investigation”

00Publius Contributor - Business - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

How the FCC Comcast Decision Limits Net Neutrality

August 29, 2008 by

-By Scott Cleland

Contrary to conventional wisdom, the FCC’s order on Comcast’s network management practices, reined in the net neutrality movement much more than it advanced their agenda. The old adage is true here, be careful what you ask for — FreePress/Public Knowledge.

At its rawest level, the chest-beating petitioners got the FCC to reiterate what the FCC has long said it would do, and also order Comcast to do what Comcast already publicly committed to do. When the dust settles and the rhetoric cools, the petitioners will better understand the old adage: be careful what you ask for.

In this instance, they hoped to advance their agenda for sweeping net neutrality legislation and regulation, and what they ended up with was the expert agency taking much of the wind out of their sails.

How does the FCC Comcast decision limit Net Neutrality?
Continue reading “How the FCC Comcast Decision Limits Net Neutrality”

00Publius Contributor - Business - Democrats/Leftists - Google - Inernet - Media Bias - News - Scott Cleland - Society/Culture - Technology

What 3Q earnings tell us about Google-Yahoo Antitrust Review

July 30, 2008 by

-By Scott Cleland

GOOG-YHOO earn ~100% of profits

With the 3Q08 earnings releases by Google, Yahoo and Microsoft in the last few days, DOJ antitrust investigators of the Google-Yahoo partnership now get their first fresh look at the most recent revenue and profit market shares for this market.

While many, including myself, have focused on the proxy market share measures of searches from ComScore, Nielsen and Hitwise to track Google’s relentless taking of share on a monthly basis, antitrust investigators will likely look past proxy search shares and focus on the truer and more accurate measures of market share–actual, reported revenues and profits.

There are strong reasons why antitrust investigators will shift from the market’s obsession with the monthly search share proxy figures to real financial numbers.

First, users do not pay for search, advertisers and website publishers do; this makes search share an indirect and less relevant measure of true market power.

Second, all searches are not equal, some lead to clicks and some clicks are dramatically more valuable than other clicks.

Third, the search shares are third-party proxy estimates based on samples; they are not auditable and accountable as publicly-reported financial data are; moreover, SARBOX requires CFOs/CEOs to personally sign that the finances are accurate, subject to severe penalties if they are proven to be fraudulent.

Continue reading “What 3Q earnings tell us about Google-Yahoo Antitrust Review”