From a source who is in a position to know, news that Google’s DoubleClick competitor will be … free for all to use. Like Analytics. Think about that for a moment. How did Microsoft kill Netscape? Yup, made the browser free. How will Google try to own the entire ad serving biz? Make it free. Why would they do this? Because the most valuable thing in the world of advertising is not the commodity , it’s the information the commodity will provide.
Providing a scaled ad serving solution? Free. Knowing the margins of every media and marketing company in the world? Priceless.
And who figured this out? Why, Google’s partners, who have been nervous ever since the YouTube acquisition. Think about it. Newscorp was ready to sign a deal with Google for their ad server, sources tell me, but they got nervous about “the fox in the hen house.” And then, what happened? Newcorp went and bought SDC, an ad serving technology and inventory optimization company. Sure makes sense now.
Hmmmmm. It just gets more and more innaresting. Note Barry Diller on Google today in an FT interview:
FT: Do you think Google has taken the right approach, has had the right attitude in its negotiations with the content creators?
MR DILLER: I don’t know. They’re an impossible situation.
MR DILLER: Because they bought a company and paid fair value for it. They paid what they paid.
FT: Did they pay too much?
MR DILLER: I’m just saying, they paid what they paid. It is too early to tell, and they’ve got this wonderful site with a huge amount of traffic, and that traffic primarily is dependent upon things other people own. So, you go to them and you say, Okay, let’s make a deal. And they look at what you’ve just paid for the service itself, and say, Well, you know, we actually deserve some of that. And Google says, Well, no you don’t. So it is a very difficult tug between what is now an every hour mention, Google, in everything it does, and these people who actually own the stuff, so I’m not saying they handled it well or badly. I think it is a very tough negotiation, handled by Henry Kissinger.
My advice to Google? Don’t make it free. Make it better, make it cheaper, and let those who use it own the data. Ah, hell, make it free, but let those who use it own the data and guarantee them you won’t use it to your advantage. But then….why do it at all?