Friday, September 28, 2007

There's only room for one monopoy around here, you hear?

Jeff Matthews—I Am Not Making This Up:

Mr. Smith Goes to Washington…to Lobby for the World’s Largest Unregulated Monopoly


It happens only occasionally: something so beyond the pale of logic and reason that further commentary is barely necessary.

But it does happen, and it happened yesterday: Microsoft, of all companies, sent its General Counsel to the United States Senate to beg the government to stop Google, the world’s most successful internet search company, from buying a small, unrelated banner ad company, for the sake of unfair competition and monopolistic business practices.


How could anyone make this up?

It is a fact. Microsoft—the world’s largest and most successful unregulated monopoly—is asking our government to stop Google from continuing to beat Microsoft in the free marketplace.

Here are Microsoft General Counsel Brad Smith’s own words:

Now, already Google is the dominant company for one of the two main types of online advertising, search online ads. Roughly 70 percent of global spending on searchbased advertising today flows through Google's AdWords service.

Apparently nobody in Redmond informed Mr. Smith that roughly 95% of global spending on desktop computer operating software flows through Microsoft's bank account.


Free of that simple incontrovertible fact, Mr. Smith proceeded to pile one whopper on top of another:

If Google is allowed to proceed with this merger, it will also obtain a dominant gateway position over the other main type of online advertising, nonsearch ads the nonsearch ads that are displayed on Web sites that we visit. Today, Google and DoubleClick are the two largest competitors in this area. And as I hope we will discuss more, they are competitors in this area. And yet combined, Google will account for nearly 80 percent of all spending on nonsearch ads served to third party Web sites.

Once again, nobody in Redmond told Mr. Smith that both Google and DoubleClick became dominant in a free marketplace, with competitive products against bigger, better-funded companies, including Mr. Smith's employer, the World’s Largest Non-Utility Monopoly.

Untethered to the business history of his own company, Mr. Smith wound it all up with a sort of uber-whopper, and I quote:

In short, if Google and DoubleClick are allowed to merge, Google will become the overwhelmingly dominant pipeline for all forms of online advertising.

Now, this merger will almost certainly result in higher profits for the operator of the dominant advertising pipeline, but we believe it will be bad for everyone else. It will be bad for publishers, it will be bad for advertisers and, most importantly, it will be bad for consumers.

In other words, Mr. Smith is suggesting, if the deal goes through, Google would become like Microsoft has been operating for the last twenty years!


I would hope somebody in that Washington Senate chamber recalled the honor roll of companies that Microsoft put out of business by leveraging its own monopoly of the desktop operating system.

If they’ve forgotten, I’d be happy to dig through old trade confirmations from the days when shorting whatever NASDAQ-listed company Microsoft had targeted for destruction was like shooting fish in a barrel.

From memory, they include but are not limited to Lotus, Netscape, Quarterdeck, Software Publishing, and Novell.

Readers with longer memories than mine are free to add to the list.

Whatever happens to the Google/DoubleClick deal, something tells me nobody's going to be making a feel-good movie out of this Mr. Smith's visit to Washington.

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