Posts from — August 2009

In economics, a monopoly (from Greek monos / μονος alone or single + polein / πωλειν, to sell) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.wikipedia.
I am not the one who hates Google nor their products, on the contrary. I find their products make a great service, and I belive they are a great company with undoubelly first-class professionals. In fact, I personally agree with the arguments given here.

But this does not prevent me from seeing manipulation in an article like this one in TechCrunch:  Who Dominates Online News In Italy? Not Google News. Being purely liberal, we may even accept market decided monopolies, but, even we accept them and consider them a fair market process outcome, we have to know when there is a monopoly.

The graphic shown by TechCrunch does not make sense with their comments:

1. The monopoly is not in the news market, but in the news aggregation market, in the access to news, which is different. The product in question monopolized (by a great and unique product) is news aggregation.

2. The nature of traffic in google news is normally just passing by while in news sites they stay, so traffic transfer from google news may have a big impact in those papers audiences. Therefore, proportions show by that graphic cannot inform us on a potential dominant (monopolistic) situation.

Now, we may argue that because fairly through the process of the invisible hand google reached such a position, neither state nor law than can judge their behaviour. That would be an ideological position. I may not even disagree. But, what we cannot do is not to recognize that there is a clear dominant position in a market (news aggregation, remember, not news themselves) that is extremely critical and crucial not just for those newspapers, but for democracies.

And this is what I meant when I said this blog was about democracy. About democracy and, of course, pluralism, and, from my view, this clear manipulation, either made in purpose or by ignorance, does not consider democracy as a superior goal. ((This is the advantage of blogs as “media”, although no one will ever read this post, at least I can give my opinion (even maybe, and probably, I am wrong)). But, what happens if I am excluded from google news and google news is the dominant player in finding news? That is the debate. There is a clear asymmetry between Techcrunch and me in order to reach audiences, the key is in the one who has the key  (:)) of the castle.

Finally, there is something clear that we cannot avoid nor hide down “technical” nor “liberal” arguments. There are clear political implications, and, therefore, ideological. Google knows it, and that is why they play with fair values and behave at their best possible standards (don’t be the evil).  Microsoft is also a market-decided monopoly and I do not see many defenders when they are so often brought to court. In fact, my position is not against market-made monopolies, I think if they arise there is a logic behind and the government should not interfere unless clearly necessary. Although, if Microsoft did not have the state to stop them, probably google would not be what it is now.

After a while, back to blog. A month of intensive Chinese languange in WeiHai (Shandong-China), taking the GMAT exam (660 marks) and the TOEFL (110 marks), kept me quite busy.

Internet allows brands to remove intermediaries to talk to their customers and they are doing it. This is why, probably, we start listening topics like “Is the Advertising Model Dead?” (by the way, after watching the video that question remains, of course, unanswered). Do we need to use Advertising, considered as placing messages in third parties places, in order to talk to our existing customers or increase our customer base?

Converting advertising into a service is something successfuly done by Google. Most people do not identify AdWords as advertising. By making ads very relevant, they are even a service. This makes ads a very acceptable reality. By contrast, irrelevant ads placed “for branding” wherever as long as it is cheap (bulk), is deffinitely getting into trouble (in other words, into an ever decreasing CPM).

CPMs trend are an objective reality and a result of a growing audience without a growing investment. And, in the other hand, they are a great opportunity and, finally, the way of reaching independent media. Socially, a decreasing role of mass-bulk-indiscriminated advertising is an step forward. The marketing mix is swifting towards more importance of price, place and product while promotion starts to be rooted on those three qualities and, therefore, word of mouth, than in pushed messages. IKEA, Ryanair, Dell, Google, and many others know it and focus on them investing less in advertising than companies previously doing the same.

For human, the fact that added value comes more from product and convenience to reach it in terms of price and location, is going back to a reality we have been forgetting after being pushed to a supposed and imaginary value.  Imagination and aspiration will continue to play a role, but, likely (and hopefuly) less relevant.

In this environment we are already, and this is how we have to think on adding value to our audiences. Advertising should also be a service, and media can still play a role, within this new game.  The opportunity is not pushing commercial messages to our readers, but, on the contrary, letting them know exactly what product is best and cheaper, where to get it, and how to better use it.

Imabe by Pieter Musterd