Have you been wondering what had been going through the heads of Microsoft executives as they prepared to make the bid for Yahoo?

In December, I got my hands on three confidential documents that Microsoft used in its lobbying against the Google-DoubleClick deal, and I posted them on Bits. (See that post here.)

Re-reading those documents now show that Microsoft was clear with the Federal Trade Commission that an approval of Google-DoubleClick might lead it to take drastic action–like it is doing now with its bid for Yahoo.

Microsoft wrote in one of the documents:

“If the transaction is allowed to proceed, Google will control so much of the publishers’ inventory and such a large portion of advertisers that Internet competitors trying to catch up will not have access to sufficient inventory and advertisers to mount a credible competitive challenge to Google.”

Microsoft warned that the DoubleClick merger would leave Google delivering almost 78 percent of all non-search ads served to third-party Web pages, on a revenue basis. That means that a combined Google-DoubleClick gives Google dominance over more than three-quarters of sites that do not have their own technology for display ad serving. Microsoft and Yahoo are the only two companies who have their own ad-serving.

Google has long been dominant in search ads, those small text ads that run alongside search results or on the bottom of thousands of sites across the Web. Google made its fortune selling those to companies that paid based on how many people clicked on those ads. Microsoft and Yahoo each lost the battle in search, as Microsoft acknowledged in its writings to the F.T.C.

Microsoft wrote:

“One need look no further than search advertising to see that despite Microsoft’s size, technical prowess, and strong incentives, it has been unable to compete effectively with Google in search and that Google’s lead in search advertising has continued to grow because of network efforts.”

But the next flood of advertising money is coming online for display ads - flashy photos or videos that are used to generate brand recognition rather than immediate clicks for advertisers like Pepsi and Nike. And display ads will provide the next battleground between Google and its foes.

Google hopes to use DoubleClick’s connections to brand advertisers and major media companies to get in on the display pie. Microsoft warned the F.T.C. that Google might initially offer DoubleClick’s tools for free to media companies so that it can gain control over display ads.

Yahoo and Microsoft each separately have leads over Google in display ads, but Microsoft told the F.T.C. that a Google-DoubleClick would be much stronger on this front:

“Significant companies like Microsoft, Time Warner and Yahoo! that continue to make investments in non-search advertising will be unable to counter the anticompetitive impact of this transaction.”

You can count on Google’s lobbyists giving a good fight against a marriage of its closest two competitors. Microsoft, after all, did its best to block the Google-DoubleClick deal. The technology giant hired the public relations firm Burson-Marsteller to create a group called the Initiative for Competitive Online Marketplace.

It might seem the commission allows almost anything. It has only been weeks since the commission cleared Google’s acquisition of the ad-serving company DoubleClick and just months since the commission cleared Microsoft’s purchase of aQuantive, the main competitor of DoubleClick.

You can also be sure that Microsoft will use its arguments against Google’s recent deal again to claim that it simply had no choice but to shell out $44.6 billion for Yahoo.

http://bits.blogs.nytimes.com/2008/02/03/microsofts-inner-thoughts-on-online-advertising/

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In a bid to halt Google’s growing dominance online, Microsoft has offered to buy struggling Internet giant Yahoo for $44.6 billion, an acquisition that would unite the world’s most influential software company with the Web’s most-trafficked site. The deal — if successful — could also change the way many consumers and businesses use the Internet. The biggest change, though, would be in the Internet search business. Suddenly, Microsoft would become a more formidable player in an area where it has traditionally struggled and Yahoo would have the major influx of cash needed to battle Google. Combined, this could be a powerful enemy for Google.

 Let me first say - I have been begging for this for several years. Googlenow has about 55% of the search market, way too much for any one company. They control way the income of many US based companies, as well as people such as myself and most of you reading this. Google needs a good challenger to keep it from being evil.

I’ll watch this one very closely. This could be an epic battle in the making here folks, and I hope webmasters and American business comes out on top.

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eBay is going to lower it’s fees in 2008. Since affiliates get a % of those fees (and if you use auctionads/shoppingads, your part of an eBay affiliate) you can expect to make less if your an eBay affiliate through Commission Junction or use AuctionAds / Shoppingads.

eBay plans to cut the fees it charges sellers across auctions in its three biggest markets — the United States, Germany and Britain, executives told investors. Next week, eBay will announce changes in the pricing of its services and improvements in the way buyers can rate sellers, Donahoe said.
http://www.cnbc.com/id/22808450/for/cnbc

Personally, I think eBay needs to really shore up it’s affiliate program and make it a bigger incentive for webmasters to place eBay ads on their site. I think they should be taking care of the top line and drive buyers to buy more often, instead of lowering fees and saving the seller money.

A study from the University of Maryland suggests eBay buyers save billions of dollars every year by purchasing via online auctions rather than conventional retailers. A research study by two statisticians from the University of Maryland’s Robert H. Smith School of Business—Wolfgang Jank and Galit Shmueli—finds that consumers save billions of dollars every year by buying products through the online auction service eBay rather than going through conventional retailers. The study claims to be the first time the overall economic impact of online auctions—specifically eBay—has been quantified. 

So why would you cut the fees charged to sellers? To get them to sell more? They are going to do that anyway. You need to just drive more buyers to eBay. A great way to do that is through affiliates. How many people think to buy an automobile part on eBay and then have a mechanic install the part. You can save alot of money doing that kind of thing. But, many people dont know that. Websites such as my automobile forums can help educate them, and are more likely to do so if eBay provides a decent incentive to do so.

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I happened to notice something the other day –

vBulletin-faq.com always has been near the top of the Google Serps for almost any vBulletin related keyword I sought after. Normally, if you search for "vBulletin" you get vBulletin.com, vBulletin.org, Wikipedia vBulletin page then vBFAQ. To my delight I noticed the other day that vBulletin-faq.com replaced Wikipedia in that slot and now ranks ahead:

So I started looking around and found Wikipedia has dropped a few spots in the rankings on various other searches. Now this isnt scientific, its just a casual observation on my part. But it makes me wonder if this is just a fluke change in algorithim or is Google starting to downgrade wikipedia in anticipation of the upcoming Google Knol? I would like to hear other’s thoughts on this so leave a comment.

While we’re on the subjects of Wikipedia and Google, I ran across this:

The professor of media studies at the University of Brighton has had enough of students turning in "banal and mediocre work" and decided that Google and Wikipedia must go. Tara Brabazon provides her students with a reading list, of books, and expects their work to reference those works, rather than a rehash of a Wikipedia entry or the top five results from Google. To achieve this she has, reportedly, banned her students using search engines and Wikipedia. ( http://www.theregister.co.uk/2008/01/15/wiki_google_ban)

I found it humorous.

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