In a preview of today’s Senate antitrust hearing on whether Google abuses its dominance on the Web, representatives of the sites—which help people search for information on consumer goods, local businesses and airline flights—said in interviews this week that Google has increasingly sought to drive people who use its search engine to its own specialized sites that compete with theirs.
One of the companies, Nextag, is going even further. Chief Executive Jeff Katz said Google also prevents his company’s site from bidding on the prominent ads that show up next to search results for products such as running shoes. Instead, he said, because Google sees his company as a threat, Nextag can only bid to appear in text ads lower down on the results page, limiting its exposure to consumers.
Google has long denied that it profits by punishing other sites on its search engine.
A Google spokesman said in a statement that the ads Mr. Katz’s site can’t use, called “Product Listing Ads,” are “a unique ad format that allows websites to advertise their products with pictures and prices, and we have found that when users click on these ads they expect to be able to purchase the product.”
Nextag, by contrast, largely points visitors to other sites where they can purchase items.
Regarding today’s hearing, Google said in a statement: “We understand with success comes scrutiny, and we’re looking forward to the hearing and answering any questions senators may have about our business.”
Online travel agent Expedia alleges Google steers users to its own websites and products at the expense of other sites.
Nextag, Yelp and Expedia, said they believe they are being targeted by Google because their websites have become places where some people search for specific information, sometimes without searching first on Google. Google has said repeatedly that its search engine is built to serve people and not other websites. According to the Mountain View, Calif., company, people are increasingly looking for direct answers to search queries and not just links to other sites. So when people search on Google for a specific local business, such as a restaurant, they will see information about the restaurant’s location and contact information. In addition, they will get a link to Google Places, the company’s business listings, which provides more detailed information and reviews.
In talks with policymakers in Washington, Google officials such as Matt Cutts, a chief search engineer, have cited a federal court ruling in 2003 that said its rankings are “opinions” and are “entitled to full constitutional protection”.
In the interview, Mr. Katz said that about a year ago Google began barring Nextag from bidding to appear in the ads that show up in the top right corner of the search-results page when people search for consumer goods. The ads include photographs of the items people searched for.
The Google spokesman said in a statement: “We require that a click from one of these ads goes to a page where the product can be sold. As of Sept. 7, NexTag was in the process of setting up Product Listing Ads for the products they sell directly on their site, and, of course, NexTag continues to use our traditional” text ads.
Mr. Katz said San Mateo, Calif.-based Nextag, which was founded in 1999 and has around 450 employees, is among the top 25 or so advertisers on Google’s search engine and has spent hundreds of millions of dollars to buy ads on Google’s AdWords ad system over the years. “There’s no more recourse other than to speak up, so I’m speaking up,” he said.
Mr. Katz added that the Federal Trade Commission, which is conducting a broad antitrust probe of Google, has subpoenaed “troves of data” from Nextag that show the company is performing “less well” since the alleged Google ad practice went into effect.
The FTC is also looking into complaints by Yelp and Expedia that Google puts links to Google Places at the top of the results page when people search for information on local businesses, pushing down the links to competing sites.
Yelp CEO Jeremy Stoppelman has said in interviews in the past that Google unfairly promotes its Places service above Yelp and others. Google is trying to leverage its search engine “to take an inferior product and put it in front of the user,” he has said. Mr. Stoppelman, had also complained that Google used excerpts of Yelp’s user-generated reviews in Google Places without his site’s permission, a practice Google discontinued earlier this year.
Some Google rivals have suggested to FTC lawyers that Google should do more to help consumers distinguish between links to its specialized sites— including Google Places and Google Product Search—and links in the “natural” search results, whose order is determined by a special algorithm.
Still, Google has plenty of defenders. Richard Skrenta, CEO of Blekko Inc., a Web-search engine that competes with Google’s, said in a blog post Tuesday that “we don’t need federal intervention to level the playing field with Google.” And he added: “Let’s let entrepreneurs, technology and good old-fashioned innovation deal with Google. Consumers will always be the winners in that scenario.”
Do you think that “consumers are the winners”? It looks to me like it’s Google that wins every time, especially when it profits from Domainers’ domains without paying them the value of a click.
Thanks to Amir Efrati and Thomas Catan and the Wall Street Journal, and
Thanks for “listening”