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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.
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.
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
I'd be surprised if they are still doing it in 12 months.
And in a year we'll see Fox advertising NBC shows? The New York Times with a full page ad for the Washington Post? Maybe I'll buy a new car from Honda and the license plate frame will read "Have you driven a Ford lately?" Let's go all out: preachers extolling the virtues of Zen Buddhism!
A brave new world indeed.
If I have been able to see further than others, it is because I bought a pair of binoculars.
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.
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?
"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.