Google has been cleared of any wrongdoing relating to Wi-Fi snooping in the UK. Well, partially cleared. The country’s Information Commissioner’s Office, whose job is to “uphold information rights in the public interest, promoting openness by public bodies and data privacy for individuals,” has said that “it is unlikely that Google will have captured significant amounts of personal data” during its Street View mappings.
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Time Magazine Editor Josh Quittner and AOL CEO Tim Armstrong took the stage on Friday afternoon at the Fortune Brainstorm Tech conference in Aspen. Most of the interview was centered on AOL’s content strategies.
But what I really wanted to know about was what AOL’s plans were around search. Their long term Google deal expires in December. And from what we hear both Microsoft and Google are gunning for AOL’s search traffic.
Why? AOL is the fourth largest U.S. search engine, but they have just 2.5% market share.
If Microsoft could add AOL’s searches, though, they’d be, with Yahoo’s share, above 30%. Search volume brings more advertisers, and more advertisers means a more robust bidding system. Microsoft needs that 2.5%.
But there’s more. AOL visitors tend to click on search ads at more than twice the rate that people click on ads on Google’s search engine. So that 2.5% market share is really more like 6% of total search advertising market share.
Google has paid AOL more than $600 million/year for search over the last several years. With the appropriate amount of negotiating leverage, that number could increase dramatically.
Armstrong says there are more than two companies competing for their search traffic, which presumably means Yahoo has somehow gotten itself into the mix. But the only real competition, says our sources (and common sense), is Microsoft and Google.
Both companies want the deal. The bids are getting high enough that one person familiar with the negotiations suggested (jokingly, I think) that it may be cheaper just to buy AOL outright – their current market cap is just $2.25 billion.
Lots of people are keeping an eye on the ongoing MySpace search negotiations. But the MySpace deal will be a pittance compared to what AOL brings in. We expect a deal to be done by September, based on information from sources.
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With the search giant’s growing influence in Washington, it comes of no surprise that Google is pouring more money into lobbying efforts. For the second quarter of 2010, Google spent $1.34 million in lobbying efforts, up 41 percent from the same quarter last year. The number is on par with the amount Google spent on government relations in the first quarter this year, in which the search giant paid $1.38 million to influence lawmakers and regulators. The filings can be found on the U.S. Senate’s lobbying database. This brings Google’s total lobbying spending to $2.72 million for the first half of 2010.
Similar to the previous quarter, Google spent dollars on swaying lawmakers on the regulation of online advertising and privacy and competition issues in online advertising. This relates to Google’s acquisition of AdMob, which was approved by the FTC in late May after intense scrutiny.
Other issues Google is lobbying for include patent reform, consumer privacy issues, cybersecurity as it relates to cloud computing, health information and privacy, renewable energy policies, censorship, cloud computing for government and broadband access.
Interestingly, Google also spent lobbying money on “openness and competition in the online services market,” which could relate to the AdMob deal as well as the potential issue with Apple’s iAd policies (which don’t seem to have taken effect…yet). And Google is probably spending money to avoid scrutiny of its recent $700 million acquisition of travel software giant ITA.
According to a release issued by the Consumer Watchdog, Google also hired outside lobbying firms in the quarter, spending $150,000 on the Podesta Group, $120,000 on Dutko Worldwide, $90,000 on the Franklin Square Group, $60,000 on the Liberty Partners group and $50,000 on McBee Strategic Consulting.
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