Google ads are certainly not perfect
. However, the Google advertising system is far better than those of its nearest competitors, Yahoo and Microsoft. Google benefits from a network effect
, not a monopoly
. Because it has the best search engine (at least the perception thereof), it has attracted the most users. That has attracted a large number of advertisers to use AdWords. Since AdWords is also distributed on content sites, that large advertiser base has attracted a large number of publishers. Because of that large publishing base, Google can attract even more advertisers. See the network effect? Google's dominance, then, has been achieved by creating the best advertising system (both in terms of ad management via AdWords and ad distribution via AdSense).
Where is the monopoly? Users are free to use other search engines. Advertisers are free to use other online advertising platforms. Publishers are free to monetize through other advertising networks. Google might be the best choice for advertisers and publishers, but that does not make it a monopoly. Now, before anyone reading this thinks I'm a Google fanboy, I think serious flaws exist in the Google advertising platform. Over the years, I've written about some of these flaws. Examples:
- Contracted Matching Flaw - description of the problem and some solutions
- Domain Parking Flaw - a distinctly non-Googley design
- CPC Flaw - expanded matches should have different bids (this might be changing soon)
What's impressive about Google, however, is the rapid pace of the evolution of the AdWords/AdSense system (case in point
). Their innovation is what has left both Yahoo and Microsoft in the dust. Now, Yahoo is seeking a bailout - from Google
. And Microsoft is, in essence, seeking a bailout - from the DoJ
. I'd rather see Yahoo and/or Microsoft (or a new company?) innovate to compete with Google. Advertisers and publishers need viable competition, but not government intervention.
BTW, writing today reminds me of this old idea: