Is it any wonder that Wisconsin Sen. Herb Kohl and the Senate are looking into the disturbing Google-Yahoo deal that basically puts all online search advertising in the hands of Google?
That level of consolidation should be a concern to every businessperson in Wisconsin. We should all stand as one in opposing this effort designed to wipe out competition.
Google already dominates 70 percent or more of online search advertising and has now swooped in to create a questionable alliance with Yahoo.
This deal takes the No. 1 and No. 2 internet search providers and puts all the control into one company. And apparently, the two have $800 million worth of profitable reasons to want this deal to stick.
Basic economics tell us wiping out competition is not good for consumers. Prices will likely rise for the product. Online advertisers in this case are then forced to pass along increases to consumers.
There are reasons for concern here, especially regarding antitrust issues. Just because a company has a recognizable name, doesn’t mean it should get a free pass on any business dealing - real world or virtual.
Ruben Hopkins is president and chief executive officer of The Wisconsin Black Chamber of Commerce Inc. Additional information is available at www.twbcc.com.
1 Comment
I think it is sick that someone with no apparent understanding of online marketing would make such bold comments. First, online marekting is the real world. The companies involved pull billions in revenue - it is not fantasy land. Next, the business model is one with self-adjusted pricing, in the sense that when traffic is of a lesser quality, advertisers pay less, and vice-versa. Higher prices indicate better conversions and quality - a *good* thing. Lastly, the business is a pseudo natural monopoly whereby customers benefit from one large and efficient network versus multiple less efficient ones (the ONLY reason this deal makes sense for Yahoo is because Google is so much more efficient. Even if you wrongly want to assume that it was unattractive to customers, it is an industry with little barrier to entry where almost limitless competitors, including individual websites, could take the traffic from Google. Why doesn't this happen? *Because Google makes more money for everyone involved because their system is so inherently superior and mroe efficient!* Wake up, Mr. Hopkins, and drop your anti-business rant without merit. Simple economics show you that you are misguided.