fatinfo.com

Google Adwords has been written up for its price fixing practices on SEOBook by Arron Wall. You can read the article in its entirety at SEOBook. Anyone who have done extensive PPC advertising tend to agree with the unfair practices at Google that deal with arbitrary price floors, preferential pricing, and special ad units. But then again, Google is a publicly trade company that is for profit, and these may be seen as unfair price fixing practices, it meets about every profit motive of a monopoly in the internet advertising space.

One way that Google optimizes for shareholder value and company revenue is to charge advertisers the cost of serving up the ad even when you are the only advertiser buying ads for that particular keyword. Arron states “If you do not pay Google enough they simply will not show your ads”. And it doesn’t help that Google is currently the mob boss of the internet, especially when they have Yahoo by the balls now too with the recent advertising deal where Yahoo is seeking temporarily life support until they can line up more advertisers for their content.

Reason why Google Adwords Price Fixing is Good:

• Increase share holder profits
• Google is a for profit company
• Because they can

Reasons why Google Adwords Price Fixing is Bad:

• Stifles market competition
• Undermines market efficiency
• Unfair advantage for firms with big budgets