Feeds

Google - the world's first firewalled monopoly

Pricing power goes virtual

The next step in data security

A question of quality...

In early September, Google revamped its ad platform, rolling out several changes that expanded its advertising coverage, tossing more ads onto more pages.

During the third quarter, a time when so many other companies were feeling the heat of The Meltdown, Google's paid ad clicks jumped 18 per cent over the previous year. And revenue soared 31 per cent. Considering that advertising drives all but a thin slice of its revenue, Google didn't just expand coverage. It sparked a significant price increase - whether Jonathan Rosenberg admits it or not.

Google will tell you those AdWords changes were "quality improvements," meant to fill search pages with ads that netizens are more likely to enjoy clicking on. On some level, that's probably true. But this is ad quality as Google sees it. Not as the advertiser sees it. And Google has improved it in a way that makes the company more money.

The trick here is that Google can so easily raise prices while claiming it doesn't. Because the system is set up as an auction, Schmidt and crew can honestly say that advertisers bid for placements. But at the same time, the company can boost the platform-wide cost per click with a spin of that algorithmic dial.

And since the system is a black box, it can spin without scrutiny. It's not just that the algorithms are top secret. All the bids are top secret too. The monopoly is hidden behind the firewall. Individual advertisers may complain they can't get traffic without exorbitant bids. But Google can always cry quality. And we have no way of knowing what that means.

Yes, Google gives advertisers a certain amount of insight into when their ads are posted, supplying long lists of keyword searches and third-party sites serving up impressions. But the system is so complex, its reach so vast, separating the Google signal from the advertiser noise is an impossibility - whether you're a newbie or the most clever of seasoned users.

It's not that an antitrust suit would suddenly clarify things for advertisers. The nature of the system is that it's far too complex for Joe The Advertiser to grasp - even with algorithms in hand. But if Google were forced to open its virtual books, we would know whether it's limiting impressions for advertisers low on the totem pole, creating a kind of artificial scarcity where the prices are cheap. And we would know just how much the Mountain Viewers can juice revenues with a few algorithmic tweaks.

If the DoJ had launched an antitrust suit over Google's ad pact with Yahoo!, it may have undermined more than just the ad pact with Yahoo! So Eric Schmidt was right: the potential costs were enormous. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.