Google’s stranglehold of online advertising grows tighter by the day

When I was reading the Wall Street Journal a few days back, I came across a fantastic article looking at Google’s continued dominance of the Internet’s business model for monetising content. The author’s conclusion hits the nail squarely on the head – that is, that the already significant gulf between Google and its rivals in online advertising is set to grow wider, essentially because the practice that Google dominates – search advertising – is expanding way faster than display advertising.

What she missed, though, is that Google is practically seizing almost all of the growth in online advertising and in the region of 90% of all the online advertising profits Stateside. Maybe the team involved in the FTC’s investigation and later 4-1 approval of the Google-DoubleClick merger are looking back with some regrets at their decision! After all, the FTC were pretty speedy to decide that Yahoo and Microsoft would provide tough enough competition to Google-DoubleClick to prevent any anti-competitive dominance by Google from becoming reality.

Looking at the situation as objectively as I possibly can, Microsoft knew it had to snap up Yahoo in order to compete with Google – and likewise, Google was fully aware it had to do something to stop that partnership reaching fruition. It made sense for Google to pay Yahoo that cool billion dollars, or close enough, in excess of what it could earn in a competitive marketplace – by transferring some of Yahoo’s inventory over to its higher priced monetisation engine.

With Yahoo marginalised, in a sense, and Microsoft cleverly sidelined, Google has the chance to consolidate its hold of online advertising while avoiding the likelihood of competitive interference that was seemingly taken for granted by the FTC.

The combination of DoubleClick’s grip on display advertising and Google’s control of search advertising can mean only one thing for advertising – Googleopoly. Advertisers take note!