Kara Visits the Senate Hearings on the Yahoo-Google Ad Search Deal
by Kara Swisher
Posted on July 15, 2008 at 9:21 AM PT
Please see this disclosure related to me and Google.
Sitting at the Senate hearings about the Yahoo-Google ad search deal this morning in Washington, D.C., let it be said that BoomTown is deeply dubious about whether it is a good thing for consumers and advertisers, as both Internet companies have asserted.
But this was my most certain conclusion:
The worst-case scenario is actually for politicians to meddle in the Internet space with their largely Web-ignorant mitts.
But that’s just me!
Titled “The Google-Yahoo Agreement and the Future of Internet Advertising,” the hearings were called by the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights, chaired by Sen. Herb Kohl (D., Wis.).
In any case and as usual, the hearings on the Yahoo agreement with Google (transcripts of testimonies here) to outsource some of its ad search business were a lot of show and not so much content.
There was an interesting little testy back-and-forth between Sen. Arlen Specter (R., Pa.) over remarks that Yahoo (YHOO) CEO Jerry Yang might have made in a previous meeting with Microsoft (MSFT) that was recounted by Microsoft General Counsel Brad Smith.
The gist of it was that Yang sketched out a world of two “poles”–Google (GOOG) on one side and Microsoft and Yahoo on the other. And if Yahoo moved over to the Google side, the World Wide Web would be terribly askew!
Yahoo General Counsel Michael Callahan said that was not his recollection of the meeting, in which he also participated.
Specter wondered who was telling the truth, which only made me want to yell out: Welcome to the MicroHoo Hall of Crazy Mirrors, Senator!
Mostly, Google and Yahoo argued that by doing an ad-search partnership they would stay aggressively competitive with each other.
Microsoft, of course, argued that the end was nigh.
“Never before in the history of advertising has one company been in the position to control prices on up to 90 percent of advertising in a single medium,” said Microsoft’s Smith. “Not in television, not in radio, not in publishing. It should not happen on the Internet.”
Countered Yahoo’s Callahan: “The purpose of this commercial arrangement, the intent of Yahoo moving forward, is to make our company an even stronger competitor to Google, to Microsoft and to others in the dynamic and rapidly growing online advertising world.”
Of course, Google chimed in, via Google Chief Legal Officer David Drummond: “Google and Yahoo will remain vigorous competitors, and that competition will help fuel innovation that is good for users and the economy.”
Yes, concentration of power is always good for the world! I mean, Microsoft’s Windows monopoly turned out so well for the industry for so long!
Wait, that’s not a very political thing to say. (Then again, I completely forgot just how stuffy D.C. was and wore Silicon Valley garb–jeans and a T-shirt–to the hearing.)
In any case, the sideshow to the MicroHoo drama moves to the House side of Capitol Hill this afternoon.
There the Task Force on Competition Policy and Antitrust Laws held the less dramatically named hearing “Competition on the Internet.”
It was the same trio of Yahoo, Microsoft and Google lawyers, of course, and more of the same.
Which is to say–a lot of hot air, little movement, but much more evidence of the next phase of the Internet and the two true poles: The Web World War of Microsoft versus Google.
In any case and speaking of hot air, here’s my video interview with the lawyers from Google, Yahoo and Microsoft, which is also posted here:
Comments
Don’t worry about the outfit. I still can’t believe I got Scoble to wear a suit for 2 days!
Always glad to see Valley people come to visit our swampy little town. Come back soon!
Andrew
P.S. That Flip Mino had me thinking about video cameras all day. See what you did?!
Posted by Andrew Feinberg at July 15th, 2008 at 4:27 pm“Yes, concentration of power is always good for the world! I mean, Microsoft’s Windows monopoly turned out so well for the industry for so long!”
Right on!
I really don’t see how some of these people keep a straight face. Microsoft, a convicted, but unpunished, monopolist has the only operating system and office automation products most of the people in that room have ever heard of and they are using, and will use (you ain’t seen nothing yet) their existing monopoly to leverage themselves into yet another. Why are they even allowed into the room?
Maybe this meeting was so lackluster because the real decision making is being carried on behind the scenes with certain “commitments” being made to the lawmakers on an individual basis.
The cornerstone for the Microsoft monopoly was laid by these same people when they mandated that Microsoft software be used exclusively in communications with the US government. We as a country have been “locked-in” ever since. Can you imagine these same people mandating that all communication with the public take place via Google technologies? The fact that a sweeping government mandated monopoly already exists in one case, and seems so ludicrously impossible on the other is all you need to know about the nature of lawmaker deliberations. Don’t let the show-trial be confused with the actual decision making process, which for all we know, has already taken place.
Posted by Mac Beach at July 16th, 2008 at 10:28 am