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B&T > Opinion > If Google Does Get Broken Up, Do it Like This
OpinionTechnology

If Google Does Get Broken Up, Do it Like This

Staff Writers
Published on: 25th May 2021 at 6:18 PM
Staff Writers
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Mountain View, California, USA - March 29, 2018: Google sign on the building at Google's headquarters in Silicon Valley . Google is an American technology company in Internet-related services and products.
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Mike Shaughnessy is the COO at Kargo. here, he looks at how Google has evolved since its inception and discusses what breaking up the tech giant could potentially look like.

When Google first appeared on the scene in 1998, the company and its founders—Larry Page and Sergey Brin—at first seemed a little too idealistic for their roles. The two argued in a paper that year for Stanford University that advertising created “mixed incentives” for a search engine and the two promoted a “competitive search engine that is transparent and in the academic realm.”

Within a short time, of course, Google embraced advertising and won accounts from corporate America. By 2021, with the founders long gone, it came to light that Google had cut back-room deals with big partners like Facebook to ensure they have preferential pricing and winning bids. It also became clear that Google has controls in place to adjust revenue share to guarantee bids clear price floors for key partners. Additionally, Google has a feature called “Reserve Price Optimization” that dynamically adjusts floors based on historical bids.

Those revelations, revealed in a program called Project Bernanke, show that Google has now come full circle from its idealistic inception. A veteran ad industry observer might say that it would be surprising if Google did not have secret deals with other big companies or if it didn’t over-engineer its technology to have complete and total control over which ad is placed where and at what price. In short, it’s clear that Google has too much power across too many parts of digital advertising.

But at this point, such revelations, combined with lawsuits pending against Google, could actually lead to a corporate breakup. If so, our industry needs to have an active hand in dictating what a breakup looks like so the real value of Google’s technologies remain, but Google’s unfair advantage and exclusive black-box insights are diminished.

The Best Break-Up

There are multiple ways to break Google up, but to do so successfully, those overseeing such a breakup would need to understand how everything fits together, or the breakup could end up being meaningless.

One scenario separates Google’s content properties, like YouTube. from its technology business. For the ad tech industry, this idea has a limited impact. YouTube, for instance, operates in a bubble that doesn’t directly affect most programmatic bidding.

Breaking Google’s search business away from its display business is another scenario. Such a move would disrupt a lot of Google’s earning channels since it would make it harder to offer the same AdWords search-plus-display advertising package to the millions of small businesses that are its bread and butter.

Since AdWords is arguably a monopoly, this type of breakup would hit Google hard. But again, it’s not the crux of the issue for the ad tech industry. The issue is that Google serves both marketers (via its Demand-Side Platform) and publishers (via its supply-side platform.) It’s highly probable that Google takes the position that its ad server is the underlying technology that drives buyers and sellers (Doubleclick for Advertisers vs. Doubleclick for Publishers) and if they give that up, they no longer have a direct line into those two businesses.

Make Search Fair for Publishers

In addition to creating a clear argument for how Google’s digital advertising business should be de-monopolized, we can also bring up the many other technologies and processes Google has in place that are hampering fair competition across both advertising.

A lawsuit that the Daily Mail filed against Google notes, “Google makes it difficult for publishers to compare prices among exchanges; reduces the number of exchanges that can submit bids; and uses bids offered by rival exchanges to set its own bids — a de facto bid rigging scheme.”

What’s more, Google’s Chrome browser isn’t just the ruler of all things third-party cookie, but is also able to dictate which ads are shown based on Google’s Heavy Ad Criteria. This includes the ability to block ads from showing, such as a prominently placed ad slot on The Verge that I saw was impacted just a few days ago on my desktop high-speed connection. That’s taking money directly out of publishers’ hands and removing their input.

Now that government entities are taking Google’s monopoly more seriously, we all have a responsibility to create a clear point of view to ensure the outcome is correct. Technically, there are likely to be holes in the case, but the larger issue is Google’s outsized influence on the advertising market overall.

Because of that, Google does need to be split up, and how that happens is the difference between a healthy advertising market and one that continues to be dominated by a monopoly. It’s time to change course.

 

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Staff Writers
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Staff Writers represent B&T's team of award-winning reporters. Here, you'll find articles crafted with industry experience spanning over 50 years. Our team of specialists brings together a wealth of knowledge and a commitment to delivering insightful, topical, and breaking news. With a deep understanding of advertising and media, our Staff Writers are dedicated to providing industry-leading analysis and reporting, both shaping the conversation and setting the benchmark for excellence.

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