The lawsuit filed Tuesday alleges Google illegally monopolizes the $250 billion U.S. market for digital ads. California, New York, Colorado, Virginia and many other states piled on.
It’s true that Google has the lion’s share of this business. But that’s because the Silicon Valley company made it so easy for advertising customers and online publishers.
Thanks to Google, anyone can immediately buy an ad with a credit card and a few clicks. There’s no need to meet with an ad salesman, no hard sell and no lengthy credit check, but instead low cost with instant results.
On the other side of the equation, a large and growing number of independent online publishers can display those ads on their websites and quickly generate income. Startup after startup has come to depend on Google AdSense, Google AdManager and the Google Ad Exchange, where bidding for placement takes place in real time.
Not only are these platforms trivially easy to use, but Google pays just 20 days after the end of the month. Traditional advertising agencies and Google’s online advertising competitors pay only after 60 days. If you’re a startup watching every penny of cash flow, that’s a very significant advantage for Google.
So who has been harmed by Google extraordinary success in transforming the U.S. advertising business over the last decade?
Well, behemoths like Rupert Murdoch’s Fox News and News Corp., Comcast with NBC and MSNBC, Paramount Global with CBS, Warner Media with CNN and Disney with ABC, as well as America’s newspapers.
Without Google’s competition, the legacy news industry could go back to its old monopoly practices, with hefty annual prices increases and take-it-or-leave-it negotiation. Remember the 1970s, when the morning daily and three TV channels were the only significant media in town?
If the antitrust lawsuit succeeds in breaking up Google’s ad business, the entire online advertising ecosystem will suffer. There are alternatives, notably Amazon‘s growing ad business, but they are in no way as easy to use as Google.
With Goggle hobbled, publishing startups will be at a severe disadvantage. If you’re launching a new online news site, good luck competing against the big metro daily or the local Fox affiliate and their websites.
The press may still be free, but only for those who already own the presses, transmitters, cable systems and websites.
Chris Jennewein is editor and publisher of Times of San Diego.