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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."
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.
I use the word "precedent" all the time. Apparently I can go around telling people I'm a lawyer now. Sweet.
They probably set the max per click they'll pay to $10000. It's not like they have to pay for it.
No, they covered that aspect and denied it.
When Google uses this "play money" they lose the opportunity to make money from outside. It *is* an advertising budget; without it, Google would beat out EVERYTHING, but its revenue would trickle to a crawl. The best way to play the game would be to allocate a budget just like it was using someone else's service; that keeps everything under control.
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.
1000s Warcraft Gold while you sleep
I don't get what all the furor was about it in the first place. Has anyone watched any television channel out there?
NBC does a crap-ton of promos for their other shows as does every other station.
I don't get why a company can't use their own products to promote themselves.
Also I don't get the monopoly argument. Google--Yahoo--MSN Search is no where near the dominance that Windows--EveryoneElse is.
Also part of a monopoly is barriers to entrance. It is so incredibly brain-dead easy to stop typing google.com and start typing yahoo.com or newsearch.com if one day I don't like to use Google. There is no OS creator that can make it that easy to switch OS's.
1) Google doesn't have a monopoly, there are real viable competitors with real market share and it is incredibly easy for new compeitors to enter the market
2) Every company in the world uses their own products to promote themselves
This does cost Google money. If they sell the words to themselves, then they are not receiving money from someone else for the words. Hence, it costs them money and they do not have an unlimited budget.
I don't read your sig. Why are you reading mine?
It's the exact same dillemma TV networks have. If they spend too much advertising time advertising their own shows, then they don't make enough money from REAL advertisers. But if they don't spend enough, no one knows about their new shows.
I don't see who Google's situation is any different AT ALL. They very likely do the same thing TV networks do, the station has its own "budget" of time they can allocate to promos, and they don't exceed it.
And just whom do they pay for that click? ;)
Grundes!
Yes. And furthermore the opportunity cost is equal to the price paid by the otherwise highest bidder for that search term. So, if google wants to own a term, they lose out not only on some amount of money, but the maximum amount of money the market would bear.
Out of curiosity, I wonder if the accountants at the SEC ever investigate the ads TV stations play for their own shows during prime time?
STFU about slashdot bias.
"I think they forgot, "...only we have unlimited play money we can allocate toward each search phrase, so we can ensure Google ads always beat out the paid ads from the unwashed masses.""
This is referred to as "opportunity cost." In this case, if they take an ad spot, they lose the opportunity to sell that ad spot to somebody else. If they, for example, get a discounted price of $20 for internal accounting purposes, and it would have sold at $100 on the open market, that's an $80 opportunity cost.
All companies, big and small, in all industries, deal with opportunity costs like these. I help run a company that makes computer peripherals, and we sell our products to our employees and channel partners at 50% off. We can only build so many of them (assembly lines are a resource that must be allocated), and each product that we sell to our employees is a product for which we could have made more money selling at retail.
If anybody reading this thinks for a bit, I'm sure it will be trivial how the concept of the "opportunity cost" affects you, either at your job, or in your personal life.
Sitting in my day care, the art is decopainted.
In fact yes they pay themselves *exactly* the highest rate for those adwords, because "paying themselves" is the same as saying "not getting paid by someone else". I mean, when google takes an adword, they are no longer paid for that adword by the person who otherwise would have paid the most for it. It is possible that google literally pays itself, but even if it doesn't, it still costs them in lost revenue, and this point is surely not lost on their accountants.
It struck me pretty funny that that the top google add for this post was .... (drum roll please)
Google AdWords
go figure ...
Perhaps, but they will also list the same amount as an expense--thus the amounts would cancel out. That is why when you due your due diligence you look beyond the press releases.
"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."
But Google knows their own search algorithms. I'll bet if I were privvy to the same knowledge, I could make AdWords ads that rival Google's. They play by the same rules but only they know the rules.
Google hires away MS's top talent, and people are shocked when they start to act like MS?
There is an important difference between what Google is doing and what television stations do when they run ads for their own shows: the TV stations don't sell their ads in an auction market (at least not usually).
If Google bids for AdWords (either with funny money or somehow with real money) then it is bidding against its own customers in an auction for its own products. Bidding in your own auction ("shill bidding") has long been considered a fraudulent practice.
Their not tight lipped about their criteria, they're tight lipped about the exact algorithm involved (understandably so), but it still doesn't explain how they rank #1 for spreadsheet. Seriously.
;)... It's a fair coincidence that ALL of these words show Google as #1?
Remember when Google released 'Scholar'? The very next day (this is something other people critical of Google adwords like to mention) somehow, with very few links to this new product, the word 'scholar' had Google showing up as #1.
Yeah, sure they play fair
intranet, spreadsheet, documents, calendar, word processor, email, video, instant messenger, blog, photo sharing, online groups, maps, start page, restaurants, dining, and books
Some? Yes, all? No way. Not spreadsheet, not documents, certainly shouldn't be for e-mail or instant messenger.
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Don't adwords work by ordering the ad results by highest bidder?
No.
If google:
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?