> Kelkoo CEO Richard Stables says the firm’s revenue from general search traffic dropped by 62% last year, to €2.3 million. In 2018, he projects a two-thirds drop to €800,000.
I decided to go to http://www.kelkoo.co.uk/ to check it out. This website is so clearly a scam created for this antitrust case.
I went ahead to compare two cameras: the Canon EOS 1D X Mark II (a $4k camera) to a Canon Ixus 275 HS ($200 camera), here are the descriptions of each:
Canon EOS 1D X Mark II
The Canon EOS 1D X Mark II offers a good sensor resolution, allowing you to take an astonishing quality of picture. The Canon EOS 1D X Mark II has a very reasonable weight for this type of camera, with its LCD display providing a decent screen size compared to other similar digital cameras. The Canon EOS 1D X Mark II comes with internal memory, which is extendable with an external memory card to match the size of your photo and video collection. The lens aperture (the 'eye of the camera'), which makes your lens contract or dilate to allow more or less light in, is good for a digital camera in this price bracket. You can compare prices for the Canon EOS 1D X Mark II, read the full product details and check out expert reviews at our web site.
Canon Ixus 275 HS
The Canon Ixus 275 HS offers a good sensor resolution, allowing you to take an astonishing quality of picture. The Canon Ixus 275 HS has a very reasonable weight for this type of camera, with its LCD display providing a decent screen size compared to other similar digital cameras. The Canon Ixus 275 HS comes with internal memory, which is extendable with an external memory card to match the size of your photo and video collection. The lens aperture (the 'eye of the camera'), which makes your lens contract or dilate to allow more or less light in, is good for a digital camera in this price bracket. You can compare prices for the Canon Ixus 275 HS, read the full product details and check out expert reviews at our web site.
> In November 2008, Kelkoo was sold by Yahoo! Inc to the private equity firm Jamplant Ltd.
The current CEO has been there since 2009, shortly after the acquisition.
Jamplant was incorporated in October of 2008, one month before the acquisition. The director was Andrew Simon Davis, who is frequently listed as a director of shell companies and trusts. In the same month he was appointed director to dozens of other companies.
The Kelkoo Group is based out of the same office as Jamplant, along with dozens of other companies, what indicates a virtual office or company registration service.
It has 5 employees, and seems to have consistently lost money over the past years, and its largest shareholder (and only institutional shareholder) is Kelkoo Group itself.
>The Kelkoo Group is based out of the same office as Jamplant, along with dozens of other companies, what indicates a virtual office or company registration service.
That office is 300k sqft of 'flexible office space.'
Recently my impression of the WSJ is incredibly poor. Just BS article after BS article. To me the bias has never been more obvious. Though I only see their content on aggregators like HN, so perhaps that plays a part.
> It's the "Wall Street Journal", a Murdoch business publication that approves of every business as long as it isn't Google.
Please don't bring politics into this. If you have a substantive criticism about the WSJ's article, make that criticism. The one you've made is ideological and unpersuasive.
Mentioning the name of a business leader (not a politician) in the context of his business dealings (not his political views) is, by definition, not bringing politics into it.
You're the one who brought up politics in a decidedly non-political conversation.
Rupert Murdoch can have well documented dislike for Google without his dislike intrinsically kneecapping the Wall Street Journal’s journalistic integrity. The comment I replied to criticizes the article we’re discussing categorically by origin, instead of specifically on merits.
Murdoch’s agenda can be a thesis statement for why the WSJ has poor journalistic integrity with respect to Google, but it doesn't demonstrate that failing on its own, nor is merely calling out that someone in a position of power has an agenda a well-reasoned thesis.
Basically, it’s not contributing anything more interesting to the discussion, and is just going to attract other comments or upvotes that agree. That’s not insightful discussion, it’s just ingroup commiseration.
Appreciate the demand for precision, but you won't get more than anecdotes in this case.
I used to work for Google and I remember the 180 degree turn in WSJ's output after Murdoch gave a speech in which he announced Google News was killing journalism and the future of newspapers was the iPad (this was just after the iPad was new). Suddenly bullshit articles about us started appearing constantly.
The first one I remember was about the Safari cookie case, if anyone remembers that. Basically Safari had shipped a third party cookie filter that broke the web as a "privacy" feature. Because it didn't work and couldn't ever work Apple started adding in bizarre documented workarounds that were basically bugs in the filter, but they chose to document rather than fix, so important apps like the Facebook like button would start working again. Google started using these workarounds as was intended by Apple in order to fix its own products. The WSJ paid some academics to go dirt digging and they found this, announced Google was hacking Safari's filter etc, Apple exploited the situation, this caused regulators to go and whack us and so on.
It's quite amazing how easily manipulated governments and especially regulators are by newspapers. My father used to hate Murdoch with a passion (he was in the tv biz), and after that I understood why... the power wielded by people who own newspapers is phenomenal. And they do not hesitate to abuse it!
Haha, having worked at Kelkoo when it was owned by Yahoo! so I have to disagree here. The management at Kelkoo really believe Google is shafting them but they used to do crazy things like change the location of the website every time they deploy. They were bad at SEO and blamed Google.
> having worked at Kelkoo when it was owned by Yahoo! so I have to disagree here
The issue isn't when it was part of Yahoo, but after. It was bought by a virtual shell company registered at the same office as Kelkoo, with generic directors and almost no employees. It now has bogus product descriptions, which are the same for every single product (read the rest of the post).
They were clearly bought for the sole purpose of filing a claim against Google.
I think you sound very sure of yourself, maybe you are correct but I think the simplest reason is the one I suggested. It’s worth noting the Kelkoo brand was very well known in France and they were very proud of their company. Them neglecting the quality of reviews on their English product or even just breaking things and not fixing them properly is more likely for me.
>This website is so clearly a scam created for this antitrust case.
What makes you think so? It starts with "We at Kelkoo have been helping our customers find the best products at the most affordable prices for the past 18 years." I clicked on the merchant sign up page, seemed fine.
No kidding. The "laptop" page says (emphasis mine):
Many of us have replaced our desktop systems with a laptop, as they are affordable, portable, and just as powerful as a traditional desktop PC. Laptops have screen sizes ranging from 9-inches to 17-inches, measured horizontally. Laptops with screens smaller than 11-inches are called netbooks while full-screened laptops are called notebooks. Some laptop models include built-in hardware to connect to wirelessly to a 3G or 4G networks and often require a data contract with a mobile phone carrier. Many laptops include built-in Wi-Fi modems and software to make portable computing easy. Some of the most recognized names for laptops are Apple, Dell, Sony and Acer. Kelkoo has all of these brands and more. You can be assured that you’ll find the best laptops at the absolutely lowest price from online retailers you know and trust.
But look in archive.org and it is clear who they are and what their beef with google is: they are Yahoo. See the "a yahoo company" at the very top of this archived page: https://web.archive.org/web/20050701004143/http://www.kelkoo... (you'll need to collapse the archive.org banner on top - it is hidden behind it by default)
Say you have some businesses in industry X that all rely on advertising.
Say one of those businesses also happens to own the dominant advertising platform that businesses in industry X need to use, in order to effectively find customers. (Special note for those subset of HN readers who tend not to read: Yes there may be other platforms, but before you present that as an objection, note I just said let's say they need to use this one in order to effectively find customers.)
In this setup, the business that owns the advertising platform has an advantage over all other businesses in industry X, because it pays itself advertising revenue, where the other companies have to pay their competitor. So money is always being siphoned off to pay the advertising platform, with a cost to most businesses but a (near) zero cost to the business owning the platform. We can assume the platform is already paid for out of profits made from advertisers in industries A, B, C, X, Y, and Z.
It seems to me this is a fundamentally rigged game (rigged in fact, not necessarily by intent) in which all other things being equal, the owner of the advertising platform always has the upper hand. Even if the bidding process is made "fair."
>In this setup, the business that owns the advertising platform has an advantage over all other businesses in industry X, because it pays itself advertising revenue, where the other companies have to pay their competitor. So money is always being siphoned off to pay the advertising platform, with a cost to most businesses but a (near) zero cost to the business owning the platform.
I don't think this is quite right. If I have a fixed quantity to sell (approximately true for advertising space on the web) then units I buy from myself cost me the same as they would cost other companies.
Suppose I have $100, and 5 advertising spots worth $20 each. I have two options here:
a) If I sell the spots to others then I have $100 + 5 * $20 = $200.
b) If I "sell" the spots to myself (the other wing of my company that needs to advertise) I have $100 and whatever 5 advertising spots are worth.
You are representing the situation of b as if it were "free advertising", thus giving my company an unfair advantage. But in fact, compared with situation a, it is clear I paid for the advertising, as I am up 5 spots and down $100 I could have obtained by selling the spots. So advertising's cost is not lower just because I also own the company that sells the advertising spots. If I'm better off than someone without advertising spots that's because advertising spots are worth something, not because of any purported shady synergy I get from owning both the advertising spots and the company that needs them.
But let’s say the spots are actually only worth $10, in terms of the ability to generate revenue. If you sell them to someone else for $20, you win because you get more money than the slots were worth. If you sell them to yourself for $20, you don’t lose any money and you can still make $10 (which is more than the slots originally cost you).
However, Google claims it is not doing this:
> As part of the change, Google said it would operate its shopping-ad service as if it were a profitable, standalone business to ensure doesn’t overbid for ads.
Still, “profitable” could be by the slimmest of margins, and Google would still have a strong incentive to keep the “standalone” business going (that is, the profit to their other business), whereas an independent company wouldn’t.
If you sell them to yourself for $20, you have your original $100, plus the $10 * 5 dollars in ads, for a total of $150. Because $150 is less than $200, this means that diverting the ads to yourself loses you money.
However, winning ALL slots on a market dominant platform has a value unto itself, by denying competitors most revenue and forcing them to increase prices to cover fixed costs, and reduce price competition and market efficiency, strongly increasing the margins of the leader.
So the ability to pay yourself unlimited money guarantees a market dominant spot where competition is drastically diminished.
It also strongly affects Google's search incentives, making them prioritize advertising and create inventory where there was none, dying up organic trafic. This is something a profit oriented enterprise would tend to do anyway to maximize revenue, but it's a far cry from Google's original neutrality aspirations.
Let's say that winning ALL slots on a market dominant platform does have a value unto itself, and the total value is V. Then Google can consume the spots itself, but it is giving up the ability to sell the package of all slots to someone else for V. So it still costs them V.
If Google is the only one who can extract V (likely the case, since they are the ones consuming the spots), they are reaping the benefits of that fact, not of being able to sell to themselves.
It raises the question, why is Google in the comparison shopping business.
Thinking about it, it makes sense for google though.
Web scraping and data analysis is their forte.
And it fits within google's approach of "answering any question someone has".
If someone wants to know the cheapest place to get X, they just want someone to type X into google and get the best answer.
For them it's not about making money on commission. Instead it's about getting buy-in into their ecosystem.
Apparently they think they can provide a better experience than the commercial sites can.
They are in the business of making companies pay for placement in the comparison shopping business.
It seems obvious to me that this is just an artificial product to make more revenue.
Froogle was actually better for results a decade ago when they just sorted the normal web scraping for shopping items. Adding the forced ads to show up resulted in worse deals for consumers. This was part because advertisers had t pay for ads, thus raising prices. And part because advertisers didn’t have the best products, just the most efficient ads.
> It seems obvious to me that this is just an artificial product to make more revenue.
If a product is actually generating more revenue, what makes it "artificial"? Do you disagree with the use of products to complement an ecosystem, or do you disagree with the use of products that are not intended to turn a profit on their own, like loss leaders?
Good point. Not artificial for Google as it makes money. I meant artificial for users as there is no need and it replaced a better product that made less revenue.
For example, have a free water fountain and then replacing it with a coin operated water fountain that dispenses warm water is using artificial with my original intent.
My main disagreement is in the use of verticialy integrated products that reduce consumer value but yield higher marginal value to the producer. I’m a huge fan of complementary products within an ecosystem that increase consumer value. I’m also fine with loss leaders, but again I prefer ones that lead to increased consumer value.
My example was froogle vs. shopping. I agree on search and Google superiority. That’s what froogle was. Their new shopping site doesn’t use their search engine and instead only searches advertisers. Instead of the web.
From an advertiser perspective it is much nicer to use Google Shopping than the old days of attempting to use the regular text adwords to advertise products. Also better for customers on the regular search results page to find products with the shopping listings .
There was a time when Google Shopping was both free and paid listings which was probably a better balance. Even if it still was like this I think having people submit product feeds still leads to much better results than just scraping.
I think this effect is small because of opportunity cost.
In Case A, google wins the bid, they gain the ad space, but gain no revenue.
In Case B, google does not win the bid, they lose the ad space, but do gain revenue.
Revenue and ad space are mutually exclusive, each is the opportunity cost of the other. Yes, in both cases google wins, but that is because google is the reason the ad space exists in the first place.
I’m not following the logic of how Google’s camera comparison shopping business is unfairly more profitable just because it’s bolted onto an immensely profitable ad company.
The issue is that they're using their position as an advertising near-monopoly to choke out competitors' ability to advertise their products. The particular mechanism[1] is not the issue; using it to deprive competitors of the ability to advertise at reasonable prices is the issue.
Imagine you're a car salesyard in a small town. You don't want your competitors to be able to advertise, so you buy the company that publishes the only newspaper in town. You don't want to be accused of being out-and-out anticompetitive, so you still let your rivals advertise, but you charge them $500 per car advertised. Is this OK?
It just comes down to Google gets to pay cost for ads and everyone else has to pay market price. The important factor here is any profit that could have been made between cost and market price for those ads is lost to Google as well.
At best, Google is just cheating revenue out of its ad division. I'm not sure this would actually be a huge advantage in the long run unless integration led to Google ads being cheaper to implemented than ads for others.
Exactly. They pay cost for ads PLUS opportunity cost of selling the ads. If you assign the opportunity cost and revenue of selling the ad to the Ads department and the revenue of the camera business to the Shopping department, it seems obvious that it’s not unfair.
You are assuming that running and advertising business is profitable. If this is the case then yes, running an advertising business plus X always gives you an advantage over just doing X. This is true no matter what X is, even if X is unrelated to advertising, or even just doing nothing. I’m not sure in what sense this means that the game is rigged (unless of course the bidding process is unfair).
I'm not sure that I did. If you are trying to compete in business X, you have a side income Z, and everyone competing in X has to buy service Y, what tangible benefit do you get from Y and Z being the same thing? Unless you can rig the bidding process I don't see any advantage.
It means that any expense you spend on Y isn't really an expense, since the money goes right back into your pocket.
So not only do you get the extra income from other people buying Y, buy you can operate at higher margins than everyone else in X because Y is available to you at cost.
EDIT: On further thought it seems no different than being vertically integrated.
> It means that any expense you spend on Y isn't really an expense, since the money goes right back into your pocket.
If you do the accounting in this way, then you make that much less profit on your service, so it winds up being the same as if you are making a greater profit, but count the cost of Y at market value.
> So not only do you get the extra income from other people buying Y, buy you can operate at higher margins than everyone else in X because Y is available to you at cost.
This isn't any different than if Y and Z are different, but you use the excess profits from Z to subsidize your business in X.
That's not how auctions work. Let's say A owns advertising business X and shopping business Y. Now, if B who only owns shopping business Z will be paying their competitors. If A bids higher, money still flows black to them regardless of the profit/loss. But Z is forced to bid much higher to get any traffic! This can be used to inflate the price to any level. Sure, others can also inflate the prices but if you try that then the money goes to A and you lose that money but it's not true for A. In this Google operates like A.
Edit: Google has lot more data about a visitor and which enables them to predict more. So, they can sell their competitors (in shopping business) the impressions which never convert while selling the impressions which are highly likely to convert to their own shopping business.
> So, they can sell their competitors (in shopping business) the impressions which never convert while selling the impressions which are highly likely to convert to their own shopping business.
If they do that, then their competitors should notice and then pay them less for giving them bad impressions, so they're just taking money out of one pocket and putting it in another.
This scenario only works out if their competitors are less competent -- but in that case, seems like Google would do well?
Does it need to be profitable? It seems to me that if it siphons money off from competitors, that's already enough to hurt the competitors relative to itself. In fact not only does the advertising not need to be profitable, even the sales of X do not need to be profitable, for the competitors to be harmed... dumping would be the extreme example of that.
You are talking about a different aspect of the scenario, where the company is reaping profits from advertising. Sure, that's kind of beside the point though. Which is why it's important to recognize that the harm happens even without the advertising being profitable.
If the service isn't profitable, then you are subsidizing the cost of a service that your competitors need. You aren't benefiting from the fact that your competitors are spending money. They would have had to spent money anyway.
Its not really siphoning money off, tho. It is an exchange of money for services rendered.
From what I saw in comments and the (paywalled) article, the problem is that Google isn't siphoning money. They're keeping the ad-space for themselves.
It is not rigged. Google own the thing. It is not a public utility. If I put an ad, product, or something on my site do I need to care about you? nope. I only care about my own profit.
Same should be going with Google. However, people assume things should happen in a different way because Google has become very popular?
Many people scream "regulation" here. But look around: There is plenty of money in Tech and in funding, yet we have a single Google. I'm afraid regulation will kill and not innovate.
This sounds approximately correct, and is a good perspective for an entrepreneurial forum. This is what investors call a moat. It's such an effective one that we have legislation designed to deal with it.
This is not a comment on ethics or morality, it's simply one on strategic efficiency.
The end result of this is that Google has more money than you, but this is true any time you are competing against a large company with more than one line of business.
Google: We compete against our competitors to see who can pay us the most money. And our competitors are complaining that they can't pay us as much money as we pay ourselves.
It's kind of a clever solution by Google, if a bit troll. They can make that ad auction 100% fair and still win it because they have more expertise on running efficient ad campaigns than anyone. IMHO that just doubles down on the danger of their monopoly power, but perhaps it complies with the antitrust requirements.
Most importantly they have more information about each auction than their competitors.
They know for each user every other search result clicked. They know what the users interests are. They know which users prefer stuff delivered fast, which prefer the cheapest items, and which will be wooed by 50% off deals.
They can use that data to present the best possible results, get the highest click through rate, and sell the most products.
Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown.
Ad auctions have 100ms to reply to an auction request.[0] This does not give you a lot of time to display the perfect ad for a given customer or search. Especially when you need to do this at the volume that Google shoes ads.
That's unlikely how it actually works on Google's site.
Google doesn't have to connect to an advertiser's network, they already have the ad information and all targeting and bidding information, so they can mostly compute the results ahead of time and only do last minute checks for winners based on, for example, whether the most likely winners have exceeded daily limits and such.
> Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown.
Isn't this fundamentally an argument to outsource a greater portion of ad creation and campaigns, or parts thereof, to Google?
Google isn't just the best ad platform, it's likely the smartest user of that ad platform, and has the automation/ML chops to be the fastest and most competent user of that platform.... To my business eyes that sounds like a company that can offer services deeper into the advertising value chain than 'just' hosting the ad-canvas.
On the flip side, even as the #1 advertising company in the world it's still darned hard for Google to be the #1 Shoe Manufacturing company in the world at the same time. If that dynamic holds then Googles growth in this area should be a massive threat to advertising agencies to the collective benefit of businesses in the rest of the market who can leverage their services more efficiently, n'est pas?
I think Google is only a threat to ad agencies that are hyper focussed on dealing with the tech bits, Google has little interest in managing ad (creative) creation, or your Facebook, TV etc advertising.
This is similar to the old eBay scam where the seller bid on his own items under a different account. If the price was too low, the seller could always bid to drive the price up. If the seller won, it didn't matter. The seller is just relisting the item again after paying himself or cancelling.
I can't imagine how anyone thought this would work; Google participating in their own auctions. At least on eBay, sellers tried to hide the fact that the game was rigged.
There are variations where this works out in google's favor, but there is a big difference to the ebay situation where you just keep relisting the same item until it sells for a "good enough" price: each ad impression is only sold once, there is no relisting.
Google is exceedingly good at extracting value from every ad impression. Even if the marketplace wasn't ran by Google, I have no doubt that they would still be bidding high enough to get the vast majority of impressions simply because they have a higher threshold at which bidding is profitable.
Which is more expensive. The new system that google is designing? The fine that they will have to pay? Or the oversight they will have to have to comply with EU law? (or some combination of the previous?).
On the other hand could Google just quit putting ads on requests from the EU?
I just don't really get why Google shouldn't be allowed to advertise on their own platform however they want. Say what you want, but there are other options for people to use to advertise if they aren't happy with Google.
Google is powerful because they provided a product so good that everyone used it. And now they're making other services that are also good, otherwise people would try the second link on the page. And, like all their competitors, they're advertising their new product.
If I owned a building next to a highway, I wouldn't have to auction off the side of that building for advertising - I can put my own ad on there (as far as I'm aware). I also think that dining Google billions of dollars is a tad ridiculous. Is there truly that much lost opportunity from whatever they're accused of doing?
The .xpi file is essentially a .zip in disguise (all Firefox add-ons work like this). Unzip it as normal and read the source. Aside from the manifest, it's 5 lines.
Google claims that it operates the buying side as a standalone business that needs to be profitable so it doesn’t overbid. I don’t buy that claim for a second, and I don’t think the EU will either.
They only need to fudge their numbers by a few percent for them to win the majority of impressions. It's not about bidding $600 for a $10 slot, it's about bidding $11 and then pointing out that their internal operator is still profitable after all sorts of internal cross subsidisation.
While it doesn't address your request not to link them in the first place... For anyone looking to bypass the paywalls when they are linked: you can copy the article's title and search Google for `site:wsj.com [title]`.
Most news sites, yes. They want Google's crawler to crawl their full text, and Google responds poorly to sites that treat their crawler differently than real search users, so if your Referer (sic) header is Google, news sites will often give you the whole article.
I decided to go to http://www.kelkoo.co.uk/ to check it out. This website is so clearly a scam created for this antitrust case.
I went ahead to compare two cameras: the Canon EOS 1D X Mark II (a $4k camera) to a Canon Ixus 275 HS ($200 camera), here are the descriptions of each:
Canon EOS 1D X Mark II
The Canon EOS 1D X Mark II offers a good sensor resolution, allowing you to take an astonishing quality of picture. The Canon EOS 1D X Mark II has a very reasonable weight for this type of camera, with its LCD display providing a decent screen size compared to other similar digital cameras. The Canon EOS 1D X Mark II comes with internal memory, which is extendable with an external memory card to match the size of your photo and video collection. The lens aperture (the 'eye of the camera'), which makes your lens contract or dilate to allow more or less light in, is good for a digital camera in this price bracket. You can compare prices for the Canon EOS 1D X Mark II, read the full product details and check out expert reviews at our web site.
Canon Ixus 275 HS
The Canon Ixus 275 HS offers a good sensor resolution, allowing you to take an astonishing quality of picture. The Canon Ixus 275 HS has a very reasonable weight for this type of camera, with its LCD display providing a decent screen size compared to other similar digital cameras. The Canon Ixus 275 HS comes with internal memory, which is extendable with an external memory card to match the size of your photo and video collection. The lens aperture (the 'eye of the camera'), which makes your lens contract or dilate to allow more or less light in, is good for a digital camera in this price bracket. You can compare prices for the Canon Ixus 275 HS, read the full product details and check out expert reviews at our web site.
This is pure bullshit, and bullshit journalism.