Earlier this morning, Google critic and Nextag CEO Jeffrey Katz used an op-ed piece in the Wall Street Journal to accuse Google of behaving like a monopoly. Google quickly responded with a line-by-line criticism of Katz’s arguments. I had a chance to talk to Katz about his piece a little while ago and while he argued that he wasn’t so much interested in engaging in yet another back-and-forth argument with Google, we obviously did touch upon Google’s reaction to his piece.
Starting our discussion, Katz noted how Google faces “undeniable issues,” especially now that the U.S. government and the European Union are looking into the company’s practices. Nextag, among others, has been subpoenaed by He also said that he wasn’t surprised by Google’s swift reaction given that the company has obviously been preparing to face these issues.
After reading his WSJ piece, one of his arguments continued to confuse me: Google, he said, needs to become more transparent when advertisers get better placement in its organic search results. Katz, it turns out (and some SEO experts agree with him here), argues that by buying lots of ads, big advertisers drive more traffic to their sites. The more traffic your site has, the higher up on the page it will likely appear on Google’s search results pages.
Katz also argues that Google, especially now that it launched its product listing ads in conjunction with Google Shopping, is pushing other results further down the page. While Google argues that it’s making all of its changes for the benefit of its users, Katz argues that users generally only look at the top of a search results page and by highlighting its own products, Google is pushing everything else out of its users’ sight.
The paid placement of these Google Shopping ad units, says Katz, also unfairly excludes Nextag and companies like it from advertising in this space. In his WSJ piece, Katz said that Google “should grant all companies equal access to advertising opportunities regardless of whether they are considered a competitor.” At the time, I wasn’t sure what he meant with that, but after my discussion with him, it’s clear that he feels that Google isn’t providing a level playing field here. The only way Nextag could participate, he said, “is if we changed our business model.” One could, of course, argue that just as these ad unites aren’t useful for musicians, they aren’t meant to be useful for Nextag, either.
If the only way to appear at the top of the search results is to advertise, though, he said, “then let everybody advertise.” “It’s like owning Interstate 5,” Katz said to illustrate this point, “and all the billboards – and then saying you can’t advertise here because you own competing rest stops.”
Katz dismissed the argument that users and advertisers could just move to other search engines. The world of advertising, he said, pretty much belongs to Google. Globally, Bing and other competitors just don’t matter.
Overall, Katz feels that Google (even though he calls them a “great company”) has an obligation to be more transparent and to provide equal access and a level playing field for sites and advertisers. Google, of course, argues that this is exactly what it is doing.
Nextag is a comparison shopping site for products, travel, and education. For merchants, service providers and individuals, Nextag acts as a sales channel. The company operates comparison shopping sites in the US (www.nextag.com), the UK (www.nextag.co.uk), France (www.nextag.fr), Germany (www.nextag.de), Italy (www.nextag.it), Spain (www.nextag.es), Canada (www.nextag.ca), Australia (www.nextag.com.au), and Japan (www.nextag.jp). NexTag is headquartered in San Mateo, California with offices in London, Tokyo and Gurgaon, India.
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...