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Google's Stomach Pangs - Adjusting to DoubleClick
An anonymous reader writes "C|Net is reporting on some trouble Google is having integrating DoubleClick into their family of products. External problems, like antitrust allegations and privacy concerns, are bad enough. The worst problems might come from within, though, as a division within DoubleClick was essentially created to game the very systems the Google search engine is founded on. '"Google is treading in dangerous waters right now," writes Ross Dunn of WebProNews.com. Google's search results "are supposed to be unbiased and highly relevant," but with Performics, "Google is put into the conflicted position of trying to generate profits by providing result-oriented organic ranking services for its own unbiased organic search results." The worry, in other words, is that Google's search results could be compromised by operating a division with an interest in skewing those results in favor of clients.' The article goes on to say how this Performics division is likely to be sold off to make sure everything stays above board."
I agree, though, even better yet, keep them as a "red team" continuing to work on ways to subvert google's results, and keep on shifting tactics to stop them.
Well yes, there still is a conflict of interest, but only if they sell the services of the Performics team. They can still keep this team, using them in much the same way companies use white hat hackers-to purposely game the system, then hand the results over to Google. It's a conflict of interest if they continue to offer Doubleclick's Performics services, but it's an invaluable tool if they use it properly.
Some time in the last two years, Google started becoming much more "SEO friendly". There are meetings at Google for SEO types. Google sponsors "Search Engine Marketing" conferences. It's getting a bit embarassing.
Google has to keep growing to justify their P/E ratio of 47 and keep their stockholders happy. That's hard to do when they already have most of their primary market. It's common to see dumb merger and acquisition activity in that situation. Search with occasional ads was a terrific business - doesn't take many employees, moderate operating costs, almost no cost of goods, good margins. The things Google has gone into since search (mail, video, office apps, etc.) don't have those properties, and are less profitable than search, if not outright money drains.