Randall Stross, a business prof at San Jose State University, offers a full-throated defense of the Google-Yahoo pact, in the NYT today. Stross is currently working on a book called Planet Google: One Company's Audacious Plan To Organize Everything We Know and has written books on Edison, Silicon Valley VCs, Steve Jobs and Microsoft but this installment of his Digital Domain column reads like a Google press release. He repeats Google's claim that prices are merely set by auction, ignoring the fact that Google, like any good auctioneer, sets minimum auction prices on a advertiser-by-advertiser basis, not merely on an inventory basis.
It's like an auction where the auctioneer not only says, "The bidding on this stunning statuette starts at $500. Do I hear $500?" but adds, "For you Mr. Smith, the bidding starts at $1,000. Mrs. Jones, $1,200." Stross has further proof the deal is neutral: Ask.com has been involved in similar ad swaps with Google, to good effect, he says. But the only fact he sites is that Ask has renewed their deal with Google twice. Good stuff, if we want Yahoo to be as relevant as Ask. Stross cites the SearchIgnite study that Google's economist, Hal Varian, took pains to rebut, and extracts a concession that their estimate that ad prices would skyrocket doesn't take into account such factors as return on investment. Having dispensed with SearchIgnite, Stross concludes the attack on Google's deal is nothing less than "demagoguery" from Microsoft. With Redmond's top lawyer Brad Smith "thundering" on Capitol Hill about monopoly status, regulators will predictably respond to the bait.