Google: Mathematical Logic or Opportunism
October 5, 2008
Beta News posted a prescient article by Scott M. Fulton, III “Was the Yahoo/Google Deal a Ploy to Weaken Yahoo?” You can read this article here. The hook on which the article hangs is Google’s deal with Yahoo to sell ads for the Stanford-spawned America Online clone. Mr. Fulton does a good job of summarizing the original plan, the recent Department of Justice skepticism about competitors cooperating with money at stake, and the effort Yahoo has made to explain its side of the story. For me, the most significant passage in the write up was:
Google made the deal in bad faith, as an anti-competitive measure to maintain Yahoo’s subordinate position in the marketplace.
I have no enthusiasm for online advertising. The way the for-fee messages are presented reminds me of early Sunday morning cable TV in Kentucky or the wacky ads on Sirius Radio’s NFL channel for colon cleansers. Distasteful regardless of format and presentation.
My mind seized on Mr. Fulton’s comment and allocated a few senior moment time slices to these ideas:
- Was Google gambling with little or no forethought, acting out of a spirit of goodness and a touch of Google Yahoo against Redmond? After disrupting to some degree the Microsoft bid for Yahoo, were Googlers trying to help Yahoo or put the company in a position from which escape would neutralize the firm’s strength? After all, if Yahoo’s ad system worked, Yahooligans wouldn’t need Google?
- Was Google implementing an opportunistic series of unrelated tactical moves, roughly similar to going through the standard moves in a chess game until the more interesting end game begins to take shape? Would Google view its deal with Yahoo as a game, ultimately indifferent to the outcome even though the path leading to the outcome was a useful learning experience?
- Did Google apply mathematical logic to the Yahoo deal? Was Google able to assign values to certain variables and then run the numbers in order to determine that [a] if the deal went through, Microsoft would be even farther behind than it now is, [b] Yahoo was sufficiently desperate to overlook the fact that Yahoo’s own ad inventory would be subject to Google indirect influence and thus out of the control of Yahoo’s own semi-tarnished wizards, and / or [c] once the deal was inked Google could turn the dial on ad algorithms and starve Yahoo a basis point at a time?
I am on the fence. What’s your take? Google the Good, Google the Greedy, or Google the Godzilla? Bring facts, not just opinions, to your post on the Comments section for this Web log.
Stephen Arnold, October 5, 2008