[HN Gopher] Google proposes moving ad business to Alphabet to ke...
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Google proposes moving ad business to Alphabet to keep regulators
at bay
Author : pseudolus
Score : 50 points
Date : 2022-07-08 20:39 UTC (2 hours ago)
(HTM) web link (arstechnica.com)
(TXT) w3m dump (arstechnica.com)
| hassanahmad wrote:
| There should be some sort of rules that consider subsidiaries to
| be part of the parent company for regulatory purposes.
| xhkkffbf wrote:
| Absolutely. This doesn't seem like it would be any real change.
| charcircuit wrote:
| So have a completely separate company and then make a deal with
| that company to find them and give them office space in
| Google's office and give them access to their intranet.
| outside1234 wrote:
| do they really think we are that stupid?
| rdudek wrote:
| Us? No. But regulators probably...
| amelius wrote:
| Will they keep the data siloed?
| lokar wrote:
| Depending on the "bet" (alphabet company) there can be little
| to zero separation between them and Google (full access to
| internal systems, etc) or it can be run as a fully separate
| company with no special access. This will depend on the
| details.
| blibble wrote:
| somehow I think they'll be able to see through that one
| Willish42 wrote:
| Am I missing something here? Ars Technica article from OP is
| dated 7/8/2022 but the referenced source is from February 2020
|
| > The US Justice Department is gearing up for a possible
| antitrust lawsuit against Google's ad business, and a new report
| from The Wall Street Journal [1] outlines a "concession" Google
| is proposing in response to the investigation. Google might split
| up some of its ad business and move it to Google's parent
| company, Alphabet.
|
| Even the archive link [2] shows this is from over two years ago
| from when archives were taken
|
| [1] https://www.wsj.com/articles/justice-department-ramps-up-
| goo... [2] https://archive.ph/L9NwY
| strongpigeon wrote:
| Indeed, I can't seem to find the crucial part from Ars in the
| WSJ article, namely the : "As part of one offer, Google has
| proposed splitting parts of its business that auctions and
| places ads on websites and apps into a separate company under
| the Alphabet umbrella, some of the people said. That entity
| could potentially be valued at tens of billions of dollars,
| depending on what assets it contained."
| nojito wrote:
| more info at the WSJ https://www.wsj.com/articles/justice-
| department-ramps-up-goo...
| telotortium wrote:
| https://archive.ph/L9NwY
| gfxgirl wrote:
| there are at least two if not 3 or more ad divisions at google
|
| 1) ads on search results
|
| 2) visual ads (banner ads), used to be double-click
|
| 3) ads on Android apps
|
| personally I want the search ads. If I search for plummer or
| doctor or even database or jeans or apple pie, I want to see ads
|
| I don't think search and ads based on the query should be
| decoupled. That will be arguably worse for me, not better
|
| banner ads and mobile ads can die in a fire
| paraph1n wrote:
| Why do you want to see ads in your search results? Wouldn't you
| rather see results based on quality rather than who can pay the
| most?
| judge2020 wrote:
| Would you be fine to pay for a search engine that does that,
| then? Without a direct payment or ads, that search wouldn't
| be possible.
|
| Imagine how many people primarily use Desktop YouTube and
| have been watching since 2006, but have always had an ad
| blocker and have never seen a single video ad. There's
| probably actual hundreds of millions there that have been
| 'lost' over the decade. It's basically profiteering with the
| only difference being that Google doesn't care because
| allowing ad-blockers increases their market dominance.
| seydor wrote:
| And what will be google 's business?
| BbzzbB wrote:
| Funnelling customers to Alphabet's advertisers.
| etempleton wrote:
| I was going to say, isn't 90 percent(ish) of Google's revenue
| advertising and 80 percent(ish) of that search advertising?
| What is Google's business if not to sell ads?
| Zondartul wrote:
| Collecting and selling user data is a business.
| corrral wrote:
| License some kind of IP to Alphabet for a rate that happens to
| be exactly what their operating expenses are?
| impulser_ wrote:
| They would split the exchange side of their ad business from
| platform side, which is Google.
|
| That's the whole reason they are being sued because they run
| both sides of the ad marketplace.
|
| Google's business would be the same. Sell ad space.
| strongpigeon wrote:
| To add to that, the exchange is specifically for the display
| network, so websites and app that aren't Google properties.
|
| This part of Google, while still worth a couple billions in
| revenue, is an increasingly smaller part of the whole.
| AnotherTechie wrote:
| But if google makes this change, it will likely follow that
| other (more self-referential) companies might also follow.
| AnotherTechie wrote:
| I'm genuinely shocked at the lack of quality discussion here. Did
| anyone actually try reading the article? The concept here is not
| to obfuscate things but rather to de-couple Google's search
| engine and Google's Adwords products.
|
| Most opinion in this thread is "lol alphabet is google" which is
| apparent to everyone. Of course they are functionally the same
| entity, but someone whose job depends on it has proposed this as
| a solution. Are we really to assume that they just woke up and
| decided to turn their brain off? There's clearly going to be some
| actual change that attempts to satisfy regulators here.
|
| We can look at history and possibly speculate how this looks, and
| we can also identify a few things.
|
| 1. Google is a search engine
|
| 2. Google the company sells AdWords as a product to advertisers.
|
| 3. Google benefits tremendously from owning both of these things.
|
| Here's my take: Google wants to decouple their search and ads
| teams, move ads to a separate entity that works as an advertising
| marketplace, generate revenue there. Search will now sell its
| advertising space, likely in a way that can also be taxed, to the
| highest bidder rather than itself.
|
| I also predict that google will want to pressure other platforms,
| which will enable them to break into other markets. META is the
| second largest advertiser online, but they do all of their
| advertising on two platforms, Instagram and Facebook. If google
| can push for the forced decoupling, then it will likely also
| apply to META. They can then swing their AdsWords product on top
| of FB/IG and start to eat back some of the traffic that they have
| been losing in recent years[1]. It's a bit of a gamble, but
| Google is betting on their AdWords software to be stronger, and a
| lot of the history would agree.
|
| Also, now that I think about it, this has pretty big implications
| for user data sharing cross platform. Now you have to formalize
| the way that personal information is exchanged for the purpose of
| advertising.
|
| [1] https://www.statista.com/statistics/242549/digital-ad-
| market...
| spaceman_2020 wrote:
| You have too much faith in companies that set up elaborate
| offshore entities in tax havens just to escape paying any taxes
| in the countries they actually operate out of.
|
| Ever wonder why all these honest and upstanding companies seem
| to have their HQs in Ireland of all places?
| s1artibartfast wrote:
| You say that like it is a bad thing?
|
| They follow the law. If you find fault with the law fix it.
|
| If you don't like tax deductions, don't begrudge people for
| taking them. Remove them.
| blfr wrote:
| Yeah, a Chinese wall like that worked pretty wall for
| journalism back when it was a profitable endeavor. Google
| certainly is.
| not2b wrote:
| We get it, but many think that this is an attempt to _appear_
| to decouple the search engine and the Adwords projects. People
| on both sides of the divide will be partly compensated with
| stock in the parent company, so everyone 's financial
| incentives will still be to maximize profit for Google plus
| Alphabet/AdWords. So the "independent" company may still favor
| Google products.
|
| But I suppose putting AdWords in a separate division might make
| it easier for antitrust regulators (US, EU or both) to pressure
| the company into a true spinoff (into a truly independent
| company).
| dylan604 wrote:
| yes, because no Alphabet employee will ever talk to a Googs
| employee where one happens to work in ads and the other in
| search. Those conversations will never happen to discuss things
| that could work for the betterment of either/both.
|
| do you really think that Alphabet would do anything to _lower_
| their profits by making ads less viable and search less ad
| driven?
| marricks wrote:
| Corporations have so much more slack than people. If got caught
| serially robbing banks I don't think the justice department
| would accept my personal 5 point plan to cut down on heists.
|
| I think people are understandable my skeptical that a megacorp
| with a known history of anticompetitive behavior will propose a
| solution that is effective at stopping its only monopoly.
| strongpigeon wrote:
| > [...] but rather to de-couple Google's search engine and
| Google's Adwords products.
|
| I don't think this is what this is about. From what I
| understand, this is specifically about Google Ad Exchange
| (which is for display ads _not_ on Google properties).
|
| The problem that a lot of people have is that Google both runs
| the auction for many ad networks, and puts bids in the auction
| as part of Google Display Network. The accusations are that
| Google's Ad Exchange favors Google Display Network.
|
| The proposal is about spinning the Ad Exchange as another
| Alphabet company.
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