KEYSTONE, COLO.--As Google's revenue, profits, and share of the search market continue to surge, some industry observers are viewing the company with increasing wariness. "The balance of power on the Internet today is more skewed than I've ever seen it," said stock analyst Jordan Rohan during a keynote address on the second day of MediaPost's Search Insider Summit in Keystone, Colorado. "Google is at the center of the Internet today," continued Rohan, managing director and Internet analyst at RBC Capital Markets. The day before Rohan's remarks, Google reported that second-quarter profits surged 110 percent from 2005. Google also recently upgraded some offerings and released new products--including, most notably, an electronic payment system. Rohan said that Google's aggressive development of new products--many of which it offers for free--potentially undercuts vendors trying to sell similar products. "If you're an SEM and you have a proprietary bid management tool, you might want to license it, and that could be a great business model--but somewhere down the road, Google could give it away for free. There's good reason to be wary of Google's product development." For example, he said, Google's new electronic payment system, Google Checkout--which allows visitors to make purchases without entering their payment information at vendor sites--potentially gives e-commerce marketers a huge boost. But, he warned, Google also can use the information gleaned from vendors for to help set its own prices or raise minimum bids. And the breakout session that followed Rohan's presentation, hosted by Matthew Roche, CEO of Offermatica, and Rob Griffin, EVP and U.S. director of search for MediaContacts, suggested that there is indeed widespread apprehension about Google's plans. Discussing analytics services, Roche urged clients to refrain from using Google Analytics, noting that Google Analytics' tracking of post-click purchase patterns gives the search giant a window into the ROI of particular search terms and profit margins of participating businesses--information that could allow them to begin raising prices for premium search terms. "I think we've seen a trend of the raising of the rates; they're clearly going after places where there's a rich profit margin," Roche said. Noting that Google aggressively tries to bundle Google Analytics with its new electronic payment system, Google Checkout, Roche asked: "What happens when Google Checkout tells them what words are most effective at which time of day?" One result, said Roche, is that Google will use that information to "start squeezing profit margins." "It's incumbent on us to be wary, and to be aware that every piece of information we give them will change the bid prices," he said. Click here to view photos and listen to panel discussions from the Search Insider Summit.
Fast food chain Burger King has tapped Dennis Publishing's Maxim magazine for an online initiative aimed at drawing young males into Burger King restaurants. For the promotion, the companies have created a microsite, slated to go live today, that features video footage of three models from the "Hometown Hotties" section of Maxim's Web site, Maxim.com. The effort, "Table Guest," consists of footage of a table at a Burger King restaurant, where visitors can pick one of three Maxim.com models to have (virtual) lunch with. Burger King will promote the microsite on its own page, BK.com, where it will reside. Maxim.com also will tout the microsite with a sweepstakes that offers readers the chance to win an actual lunch with one of the "Hometown Hottie" models. Jen Yip, associate marketing director for Dennis Digital, which owns Maxim.com, characterized the joint effort as a "strategic partnership." "We know what our audience is looking for--we understand the guys in their target audience, and we created something that's very contextually relevant on the Maxim site, and relevant to their audience." Maxim.com provided the models, but the "Table Guest" microsite was produced by Burger King internally, Yip said.
A federal judge in Arkansas is expected to begin a hearing today to determine whether to approve Google's offer to settle a click fraud class-action lawsuit by paying up to $30 million in attorneys' fees and $60 million in ad credits. Google agreed to settle the case--brought by Lane's Gifts and Collectibles--in March, but at least 51 objections have been filed against proposed settlement. One of the lawyers who is challenging the settlement, Darren Kaplan of Atlanta, has said in court papers that the settlement isn't structured fairly. He has said in court papers that marketers will only receive ad credits for a fraction of the amount of money they have lost to fraudulent clicks. Kaplan was involved in negotiating a class-action click-fraud settlement with Yahoo last month. In that deal, Yahoo agreed to give advertisers the option of cash rebates for payments for invalid clicks, as opposed to Google's promise to give ad credits for a percentage of the overpayment. In preparation for today's hearing, an independent expert filed a report with the federal district court that concluded that Google's efforts to combat click fraud are "reasonable." But the 47-page report, by New York University professor Alexander Tuzhilin, also noted that pay-per-click advertising comes with some intrinsic problems that don't lend themselves to easy solutions. For instance, he wrote, Google and its advertisers clash about how much information Google is willing to provide about paid clicks. Marketers want an accounting of all clicks they are charged for and the precise time of those clicks, but Google will only tell them how many clicks they are charged for on any one day. "This is a source of contention and dispute between Google and the advertisers," Tuzhilin wrote. "On one hand, the advertiser has the right to know why a particular click was marked as valid by Google (when the advertiser thinks that it is invalid) because the advertiser pays for this click. On the other hand, if Google discloses this information, it opens itself to click fraud on a massive scale because, by doing so, it provides certain hints about how its invalid click detection methods work."
Digital media firm Gotuit today will launch an ad-supported broadband video on demand portal that features news, sports, music, and entertainment clips. The site, Gotuit.com, incorporates tagging on its video clips, down to individual segments, so users can go through videos they have found and play shorter clips. The site also incorporates personalized playlists, which can be set to include entire videos, or smaller segments of the videos. For instance, users can create playlists that contain footage of their favorite athletes or celebrities. The video segmentation also has ad implications, said Gotuit President Mark Pascarella. The company can break down the videos by segments and then show ads after certain points in videos across a category. For example, he said, the company can arrange to show a video ad after every touchdown in a streamed football game. Content providers at launch include Universal Music, Reuters, the Associated Press, AccuWeather, Planet X, Shady Records, the NFL Network, HGTV, Warner Bros., Twentieth Century Fox, and Sony Pictures.
Video sharing site YouTube saw traffic surge 75 percent the week of July 9, when it posted video World Cup footage showing French captain Zinédine Zidane's head-butt attack against Italian defender Marco Materazzi, according to new data from Nielsen//NetRatings. For that week, the site drew 12.8 million unique visitors, compared to 7.3 million the week before. The New York Times' Web site was among the online publications that linked to the YouTube footage. Nielsen//NetRatings also reported that YouTube's traffic quadrupled in the first six months of this year. Last month, the video site drew 19.6 million unique visitors--up from 4.9 million in January, according to Nielsen//NetRatings. The number of Web pages viewed surged 515 percent, to approximately 724 million last month--up from around 118 million in January--and the time spent per person increased 64 percent, to around 28 minutes, from approximately 17 minutes. The site also skews heavily toward young males. Men are 20 percent more likely than women to visit YouTube, and Web users between the ages of 12 and 17 are almost 1.5 times more likely than average to visit the site.
Apparently the networks learned nothing from Bob Woodruff nearly getting killed in Iraq. No sooner had Hezbollah done something that they will certainly live to regret (words to live by: never piss off Ray Lewis, the Mafia, or the Israeli army) than everyone, with the exception of CBS, fitted their news anchors with spiffy flak jackets and shipped them off to the war zone. With the networks investing millions in the anchors themselves and millions more in promoting their broadcasts as better than the next guy's (not to mention medical costs if another newsreader gets the Woodruff treatment from the combatants), you'd think the anchors would be the last folks the networks would put in harm's way. News directors claim that having their stars huddled on a balcony overlooking explosions in the background somehow "focuses" the newscast on that particular story. But who knows how many people tune in just to see if Charles Gibson or Brian Williams or Soledad O'Brien get Katyusha-ed on live TV? Personally, I'd rather hear from the local bureau chief, who really knows the score and has to run from spot to spot to keep from making the daily body count. He's the guy who pries open the local sources and provides most of the better insider information on what is happening behind the bombs and rockets. I can't help but feel the anchors leech off the hard work of the ink-stained wretches in the trenches, and their presence takes the spotlight off the reporters who have busted their asses for years to develop reliable sources. Kind of reminds me of the definition of editorial writers: the ones who come down out of the hills after the battle and shoot the wounded. For some reason (perhaps it was Dan Rather's idiotic reporting from hurricane sites), anchors somehow feel that being on the scene of a major news story gives them street cred they wouldn't get under the studio lights in New York. Is it supposed to humanize multimillion-dollar newsreaders to have them ask a disaster victim, "How are you feeling?" Not for me. I just sit and try to imagine the logistical cost of transporting Brian or Charles or Anderson and their entourages 5,000 miles to the breaking news--and what they'll do if the "scud sirens" go off in mid-sentence. Poor CBS. Since it didn't drop-ship the aging Bob Schieffer into this week's hot spot, it will take an unlimited amount of crap from the other networks, news consultants and j-school professors who have little else to do during the summer. That is, until another Bob Woodruff happens--and suddenly, CBS will have made the prudent decision.