Google Responds to AdWords Accusations

An anonymous reader writes "Google has issued a statement on the Inside AdWords Blog. Based on the thoroughness of the statement and the use of the word 'precedent' in the second sentence, it appears that the Google PR team huddled with the legal team to get their point across." From the post: "Being rather proud of AdWords as a means to effectively advertise one's products or services, it seems natural to use it ourselves. Since it's a common practice across the industry for companies to promote their own products and services through their own web presence, there is much precedent to do this. It's important to note, however, that our ads are created and managed under the exact same guidelines, principles, practices and algorithms as the ads of any other advertiser. Likewise, we use the very same tools and account interface."

Comments

Weasel words

[Captain Kirk]

From TFA "As does any advertiser, we aim to give our campaigns a budget"

Come on, what you are doing is bidding whatever it takes to get the sport you want.

That pushes up the price for everyone else. Good for you but bad for your customers.

There is never a case where you lie awake at night worrying if you have bid too much.

"Do no evil" is a great motto and Google is a great company. I feel that they have not considered this from the point of view of Adwords buyers. I'd be surprised if they are still doing it in 12 months. Google would no longer be the Google we love if they are.

Re:Weasel words

[MDMurphy]

It's not ads, but I've always been impressed by what you get if you search Google and and are offered maps as options.

Search Google for "map san francisco" at almost the top of the page you'll see links for :

          Map of San Francisco, CA
                    Google Maps - Yahoo! Maps - MapQuest

You could argue about them being first, but they give you links to two other popular mapping sites right up top.

Do the same search on Yahoo! Lower than the Yahoo map you'll find a link to MapQuest, but nowhere on the page is Google.

So is that Google advertising Yahoo for free?

Re:Weasel words

[synx]

I think it's important to realize that the adwords system is not just a straightforward action model. The overture model is straight auction, which is why adwords is superior to overture - the highest bidder does NOT always win.

A critical piece of any adwords auction is the click thru rate, aks CTR. Any experienced adwords advertiser knows that their CTR is the most valuable aspect of their ad. A higher CTR ensures you pay _LESS_ per click (even if your bid is higher), and the ranking algorithm uses relevancy, as measured by CTR as a major indicator of what should be first.

Simply put, even Google can't bid their ads to #1 position. If Google's own ads are doing well and are in the #1 position, then it is because they are more relevant than the other ads.

So to characterize it as google using unlimited "funny money" to permanently secure #1 advertiser spot is just simply wrong.

Really? Strange that 'spreadsheet' would give...

[Assmasher]

...'Google' as #1 then, don't you think?

Tax Liability?

[Christopher_Edwardz]

If google:

• gives itself free advertising for other products in its portfolio
• and derives monetary or other substantial benefit
• and values this service for money

Do they, then, have to mark as "income" the money they create in this manner? I mean, the point would be moot if they "paid themselves" and then marked that as income. (And also created a business expense I guess.)

Do they have to bid, like the others, or do they simply bid[0] = bid.highest() + 1 where bid[0] is google's "bid"? If so, does this violate their own bidding rules? It appears by the article that they do bid fairly.

However, if they do not use "real money" to do so, or record any "created money" as income (as it is value, as it is valuable, since they sell it as a service), isn't this a problem legally?