Business problems need business solutions

Posted by Pablo Chavez, Director of Public Policy

Today we submitted comments with the Federal Trade Commission in reaction to the Staff Discussion Draft about the future of journalism in the age of the Internet.

We agree that the Internet has posed challenges as well as opportunities for publishers. Google works closely with publishers to find business solutions so journalism can thrive online, and we’re optimistic about the news industry’s future. But we strongly disagree with a number of policy recommendations set forth in the Staff Discussion Draft, such as the suggestion that Congress enact a federal hot news doctrine -- something that would not only hurt free expression, but also the very profession of journalism that the proponents of hot news say they support.

We appreciate the FTC's involvement in this matter and its effort to shed light on how news publishers can move forward in the digital era, and we're hopeful that our comments will help encourage policy makers to promote innovation and creativity rather than protectionist barriers.

What people are telling the FTC about Google-AdMob

Posted by Paul Feng, Group Product Manager

We’ve been talking with the Federal Trade Commission for the past six months about our planned acquisition of mobile advertising start-up AdMob, which we believe will bring new innovation and competition to mobile advertising. We’ve told the FTC about how new and highly competitive the mobile advertising space is, and the FTC has been talking to others in the industry about their views as well.

Some of those folks are sharing what they told the FTC. The developers of a mobile app called Wertago said they told the FTC that:

The internet and mobile technology sectors right now are perhaps the most (or among the most) competitive and fast-moving industries EVER TO EXIST. The web and mobile spaces have remarkably low barriers to entry. [...] And we think Google’s AdMob acquisition will have little if any effect on the competitiveness of the mobile advertising market space.

Wertago also talked about both the low entry barriers and non-existing switching costs in mobile advertising:

The crucial point here is 1) the marginal advertiser and the marginal developer, not the average or typical advertiser and developer, are who drive the competition, and there will always be a fight for them, especially because of the “long-tail” where lots of niche opportunities exist, and 2) the cost of switching ad networks in a mobile app is close to zero, and the cost of developing an ad network is not terribly high and easily bankrolled.

Industry analyst Greg Sterling also met with the FTC, and said that he told them:

I didn’t believe competition would be affected adversely and that advertising prices were not likely to go up. Indeed, mobile CPM prices have been falling in mobile. In short I said, yes Google becomes more powerful and effective but the deal doesn’t stifle competition. The market is dynamic and highly competitive, I told the FTC.

And:

I’m no laissez-faire capitalist but I think the mobile ad market is both very young and highly dynamic. It’s evolving quickly and definitely very competitive. If the objective of anti-trust law is to protect competition in the market then it is simply unnecessary for the FTC to intervene at this stage by blocking the AdMob deal.

Other analysts and observers have been weighing in too:

• Ad Age: Google Wins Industry Support for AdMob Deal
• eConsultancy: In case the FTC hasn't noticed, the mobile ad market is still anyone's game
• Paid Content: Why the FTC Should Allow the Google-AdMob Merger
• Wired: FTC Blocking of Google Mobile Ad Acquisition Would be Misguided
• Motley Fool: Why the FTC Should Keep Its Hands Off Google
• Tom Lenard, Technology Policy Institute: Google-AdMob: A Bad Precedent
• Ryan Radia, Competitive Enterprise Institute: FTC Should Green Light Google-AdMob Deal
• Silicon Alley Insider: The Real Reason Why the FTC Must Approve the Google-AdMob Deal Immediately

With Google and AdMob facing strong competition every day from businesses like Apple, JumpTap, Millennial Media, Microsoft, inMobi, Greystripe, Mobclix and many more, we agree that there’s vibrant competition in this space.

Update (5/5): Dow Jones asked a few players in the mobile industry yesterday what they thought about the deal:

Two of these people said the FTC staff didn't appear to be taking into account other companies like Millennial Media Inc., Greystripe Inc. and Jumptap Inc., all of which operate in-application advertising networks. By a broader definition, the mobile advertising market also includes corporate behemoths such as Yahoo Inc. (YHOO) and Microsoft Corp. (MSFT), which serve ads displayed on mobile websites.[...]

Industry insiders and analysts said an FTC antitrust challenge would be problematic for a number of reasons. One industry source argued that it was a "flawed theory" to distinguish between ads that appear within mobile-phone applications and those displayed on mobile websites. This person said the mobile-advertising market is at such an early stage that it is impossible to predict which companies will emerge on top.

Michael Chang, chief executive at Greystripe, acknowledged that the combination of Google and AdMob would create a stronger rival, but he agreed that the market is too new and too dynamic to predict how it will evolve.

"It definitely creates a stronger competitor, but we're in the second inning and it's going to be a long game," said Chang.

The National Broadband Plan and Small Business

Posted by Harry Wingo, Policy Counsel

Yesterday, I spoke at a panel with other tech companies about how small businesses can leverage the Internet to grow their business. The event was put on by the SBA and FCC through a program called SCORE, which, among other things, is seeking to accelerate small business growth through access to broadband. SCORE will create a comprehensive package of applications, training, and support to small businesses in the country's neediest areas.

One of the small business owners I met at the event, Emily McHugh of Casauri, spoke about how the Internet helped start and grow her business. Emily and her sister started their business in 1999 because they thought there weren’t enough good bags out there for tech gear. And they were right! With Emily’s business degree and her sister Helen’s design degree, Casauri took off. They’ve helped scale their business by leveraging the Internet. All of Casauri’s accounting, sales, and data storage is done online. This cloud computing approach makes their business more efficient and saves them money. But Emily cautioned, "the Internet doesn't mean anything to small business without access...dial-up doesn't count... it's all about speed!"

Emily and her sister are not alone. Lots of small businesses are tapping the Internet to grow their businesses and we believe SCORE will help boost digital literacy, online commerce capabilities, and usage of low-cost, cloud-based tools for small businesses across the country.

If you’re interested in learning about how to start a business or make it more efficient using low-cost or free online tools, you may want to take a look at our series of blog posts on entrepreneurship, which started yesterday on the Official Google Blog.

And, now, I’m going back to browsing all of Casuri’s great laptop bags.

Wired's look at how Google sells and prices ads

Posted by Adam Kovacevich, Senior Manager, Global Communications and Public Affairs

Most policymakers are pretty familiar with how TV stations, magazines and newspapers sell advertising. Typically those organizations have a "rate card" with standard ad prices for a 30 second ad or a full-page print ad, and the advertiser pays the standard rate or negotiates a lower rate if they commit to buy ad space in bulk.

That's not how ad space on Google is sold. Instead, all advertisers -- big and small -- bid for their ads to appear when users search on Google for certain terms.

Admittedly Google's ad auction can be a bit difficult to understand because it differs so much from traditional ad models. That's why we have posted videos and tutorials on the AdWords Learning Center explaining how it works.

Now Wired Magazine's Steven Levy has a new article out in the June issue taking an even closer look ad the Google ad auction, and it's a must-read for policymakers who want to understand online advertising. Levy looks at how Google's auction model evolved, the role of algorithmic "quality scores" that ensure users see relevant ads, and how the "second price" auction means that advertisers don't overbid.

Check it out when you get a chance.

Graphic: Wired.com

Google Book Search settlement will expand access

Posted by Adam Smith, Director of Product Management, Book Search

Over the last few weeks we've heard a number of questions about the Google Book Search settlement and what it means for readers. Over the coming days, we'll attempt to answer some of those questions on this blog, but first, we think it's important to explain how exactly the settlement will help expand access to books in the United States. We'd also like to remind authors and publishers who have questions that they should visit the settlement Notice website.

Have you ever gone to your local bookstore looking for a book only to be told that it’s not there? You look for it on Amazon; they don’t offer it. You go to your local library and it’s not there. But you know that it exists because you read it your freshman year in college.

Or let's say you’re a second generation American interested in reading books in your parents’ native language, Greek. Try finding more than a few books in foreign languages in most town libraries or bookstores in the United States.

Or you're a graduate student who has been doing research on your thesis for years. You think you've read every book there is to read on your topic, but then you type your query into Google Book Search, and you suddenly discover a new original book or monograph that you weren't even aware of before.

Until now, we've only been able to show these users a few snippets of text for most of the in-copyright books we've scanned through our Library Project. Since the vast majority of these books are out of print, to actually read them you have to hunt them down at a library or a used bookstore. And if you can't find them -- because the only known copy is at a library on the other side of the country--you're unfortunately out of luck.

Under the settlement that will change for users in the U.S.:

• When you find the book you're searching for, you’ll be able to preview 20% of the book over the Internet from anywhere in the U.S. If you want to look at the whole thing, you'll be able to go down to your public library where there will be a computer station with access to the whole book for free. And if you don’t want to leave home or want a copy for yourself, you’ll be able to purchase access to an electronic copy of the book. As always, if the book is old enough to be in the public domain, you’ll be able to download the whole book for free.

• If you’re at a university, in addition to your libraries' free access points, your school can obtain an institutional subscription that gives you access to most books that we've scanned. And scholars and students who don’t keep the same study hours as the library will be able to look at any book, anywhere, any time.
  
  
• If you are vision impaired, the settlement will open a world of books to which you've never had access. Visually impaired people will be able to search for books through the Google Books interface and purchase, borrow, or read at a public library any of the books that are available to the general public in a format that is accessible to the vision impaired.
  
  
• If you want to read in foreign languages, you will have access to tens of thousands of more books than you have today. Books in Spanish add up to almost 10% of the books already scanned. If you account for the difference in numbers between books in Spanish and English, the usage per book in Spanish is more than three times what it is for books in English.

The settlement won't just expand access to out-of-print books, either. Because authors and publishers will have the ability to let users preview and purchase their in-print books through Google Book Search, readers will have even more options for accessing in-print books than they have today.

For users outside the U.S., the Google Book Search experience won't change unless rightsholders specifically authorize additional uses of their books outside the United States. And while the Google Book Search settlement will only allow for improved access in the U.S., we believe that this will constitute an unprecedented test bed for the development of similar services around the world.

As the discussion continues, it's important to understand what readers stand to gain.

Extending notice on the Google Book Search settlement

Posted by Alexander Macgillivray, Associate General Counsel for Products and Intellectual Property

Last October, we announced a settlement agreement regarding Google Book Search that resolves class action lawsuits first filed in 2005 by the Authors Guild and the American Association of Publishers. Last Friday, along with the authors and the publishers, we submitted a letter to the court asking for permission to extend what's called the "notice period" for an extra 60 days.

So what exactly does "notice" mean? Notice is an important part of due process. It helps inform class members of their rights under the proposed settlement and gives them a chance to opt out if they wish to. If you've ever received a letter in the mail from a credit card company or product manufacturer informing you that you're entitled to compensation under a class action, then you get the idea of what "notice" is about.

It's pretty easy for credit card companies to contact their cardholders -- they send bills to them all the time. The world's authors, publishers and their heirs are much more difficult to find. So, as the New York Times recently reported, the plaintiffs hired notice campaign specialists Kinsella Media Group to tell them about this exciting settlement, and Google has devoted millions of dollars to fund this notice campaign. Kinsella started by launching a website for authors and publishers and a direct-mail effort. Beginning in January, Kinsella published ads in newspapers and other publications all over the world from Fiji to the Cook Islands to Greenland. And of course, they also placed ads right here at home in the U.S., in publications as diverse as Writer's Digest and USA Today.

The settlement is highly detailed, and we want to make sure rightsholders everywhere have enough time to think about it and make sure it's right for them. That's why we've asked the court for permission to extend the opt-out deadline for an extra 60 days.

Update as of 04/28/09: The court has to decided to extend the opt-out deadline until September 4, 2009.

Giving consumers control over ads

Posted by Nicole Wong, Deputy General Counsel

In her post to the Official Google Blog this morning, Susan Wojcicki, VP of Product Management, announced that we are making interest-based advertising available in beta for our AdSense partner sites and YouTube. Interest-based advertising uses information about the web pages people visit to make the online ads they see more relevant. Relevant advertising, in turn, has fueled the content, products and services available on the Internet today.

Providing such advertising has proven to be a challenging policy issue for advertisers, publishers, internet companies and regulators over the last decade. On the one hand, well-tailored ads benefit consumers, advertisers, and publishers alike. On the other hand, the industry has long struggled with how to deliver relevant ads while respecting users' privacy.

Last month, the U.S. Federal Trade Commission released its principles for online advertising. Likewise, other organizations interested in consumer protection and privacy also recently issued guidelines: The Network Advertising Initiative released its 2008 Self-Regulatory Code of Conduct in December; the Center for Democracy and Technology released its Threshold Analysis for Online Advertising Practices in January; and the Internet Advertising Bureau in the U.K. announced its Good Practice Principles last week. There is a consistent message in all of these guidelines: Consumers need and deserve greater transparency and choice when it comes to online advertising.

As Google prepared to roll out interest-based advertising, we talked to many users, privacy advocates and government experts. By listening to them and by relying on the creativity of our engineers, we built a product that's not only consistent with industry groups' privacy principles, but also goes beyond their requirements. We are pleased that our launch of interest-based advertising includes innovative, consumer-friendly features to provide meaningful transparency and choice for our users:

• Transparency in the right place and at the right time. When users see online ads today, they often don't know what information is being collected, who provided the ad, and sometimes who the advertiser is. We already clearly label most of the ads provided by Google on the AdSense partner network and on YouTube. With one click on the labels, users can get more information about how we serve ads, and the information we use to show ads. This year we will expand the range of ad formats and publishers that display labels that provide a way to learn more and make choices about Google's ad serving.

• Meaningful, granular, and user-friendly choice. For the first time, people will have a say in the types of ads they see by using our new Ads Preferences Manager. With this tool, users can view, add and remove the categories that are used to show them interest-based ads (sports, travel, cooking, etc.) when they visit one of our AdSense partners' websites or YouTube. To provide greater privacy protections to users, we will not serve interest-based ads based on sensitive interest categories. For example, we don’t have health status interest categories or interest categories designed for children.

• Tools that respect users’ choices. With one click in the Ads Preferences Manager or in the advertising section of our Privacy Center, users can opt out of interest-based ads altogether, although it means they will probably see advertising that's less relevant and useful on our partners' websites or YouTube. The opt-out is achieved by attaching an "opt-out cookie" — a small file containing a string of characters that stores a preference for opting out — to a user's browser. Opt-out cookies in the industry, however, have traditionally not been permanent. So Google's engineers also developed tools to make our opt-out cookie permanent, even when users clear other cookies from their browsers.

• Transparency beyond privacy policies. With interest-based advertising, we’re continuing to explore new ways of communicating with our users on privacy. We've revamped the advertising section of our Privacy Center. And the Ads Preferences Manager features a video, embedded below, that explains in plain language how interest-based advertising works. All of the videos on the Google Privacy Channel on YouTube are open for comment and we look forward to hearing feedback from our users.

We’ve built our business by earning and keeping the trust of our users. And we’ll continue our dialogue with them and with other stakeholders as we develop new products to make the ads we show our users more relevant and useful.