The news that AOL may be looking to buy beleaguered search engine Yahoo this week is no great surprise as Google’s supremacy continues to grow in the online space.
In order to regain power within a landscape dominated by Google at every turn, brands need to join forces to take on its expanding control over online revenue streams.
Last week in its quarterly results Google’s.article revenues were up 23% on 2009, to $7.29bn (£4.54bn), with its UK operation creating 12% of that total.
Google now presides over the likes of YouTube, online advertising firm Doubleclick, mobile advertising giant AdMob, and this year alone has acquired 24 businesses, including online display company Invite Media and 3D software company BumpTop.
The success of Google’s Android mobile operating platform has certainly taken a bite out of Apple’s iPhone, with Android phone sales now outstripping the iPhone. Further Android phones and tablets will be coming to market in the coming months, along with Google’s own handsets.
The launch of Google TV will not only see it compete with Apple TV for viewers of online video content through a TV set, but also with the likes of YouView, which is backed by the BSkyB and the BBC, ITV and Channel 4.
NewsCorp, owners of News International, is also believed to be interested in acquiring Yahoo. NewsCorp owner Rupert Murdoch is another who has expressed his deep concern about Google’s dominance in online space, particularly in relation to its free-aggregation of his titles’ news content ahead of NewsCorp paywalls for the Wall Street Journal and now The Times and News of the World in the UK.
The UK TV and newspaper industry’s move to block NewsCorp’s full acquisition of BSkyB, of which it currently owns 39.1%, is an interesting one. With Google now making its moves into TV platforms, are the players involved fighting the wrong enemy? Should they be more concerned with the anti-competitive nature of Google’s control over the online advertising market, and how that might impact UK media, and their new toy YouView?
Such a concern was muted at the Westminster Digital Marketing eForum last week in discussions around Google’s 95% share of the search market. Stephen Kinsella of law firm Sidley Austin reminded the forum that anti trust issues around Google’s control of search and accusations of search rigging had already been levelled against the company, adding that the European Commission is currently looking into Google’s supremacy in the region.
Charlie McGee, head of digital at media agency Carat expressed further concerns over Google’s acquisition of online ad service Double Click, which includes agencies, marketers and publishers among its clients. McGee posed the question over the control of the data collected by Double Click’s products, and how it might be used to Google’s advantages. McGee commented that Google’s dominance meant that there was not enough of a mix in the online ad space.”The buying power of Google can make it harder to forge our innovation in this space,” he added. “Everyone is marching to Google’s tune at the moment.”
It doesn’t seem that long ago that similar anti-competitive accusations were thrown at Microsoft for its leverage of the personal computing and software market. Back then, Apple was its main rival, and the battle lines were clear. Now as Google’s rivals and detractors range from search engines to advertisers to hardware producers to operating systems to news corporations to broadcasters, the digital war has become a very confusing one in need.
Microsoft announced this week it was going to work more closely with Facebook, with the inclusion of recommendations from Facebook friends in its Bing search results.
A savvy move, as all indicators point to the digital space becoming ever more social. If advertisers and marketeers want to engage with customers, following Microsoft’s lead into a more social search “over the garden fence” experience looks like a good bet.
Microsoft also launched a suite of its own smart phones operating on its Windows 7 platform, and relaunched its Zune music player earlier in the year. Moves which see it try to reclaim some ground in the digital space from Google and Apple, but perhaps too little, too late.
Google isn’t going away. CEO Schmidt said this week that the company remained committed to “aggressive investment” in both its people and its products. In order to compete, further partnerships like Microsoft and Facebook’s, and potentially Yahoo and AOL (or A N Other) need to be forged to create a truly competitive market, one in which digital marketing opportunities, innovations and creativity can still happen, and the online ad space is not totally Googlelised from the word go.