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 Search Ad Market no market for antitrust purposes - Person v. Google (see Update 45)

In his complaint Person claimed that Google has removed a large number of search terms from the bidding process to force small businesses to compete for higher-priced keywords. Small advertisers are being forced out of the AdWords market, which makes advertising more profitable for Google's largest advertisers (the well-known established advertisers with the higher clickthrough rates like eBay). He charged Google with monopolization or attempted monopolization.

U.S. District Court Judge Jeremy Fogel dismissed the antitrust lawsuit against Google. In his view there is not a monopoly despite Google's formidable presence in the online ad market: "Plaintiff defines the relevant market in the FAC as “‘keyword-targeted Internet advertising’ in which advertisers pay to have their advertisements displayed (alone or among an ordered group of ads identified as such) near the search results obtained from Internet search engine (such as the search engines of Google and Yahoo) using the keyword(s) selected by the advertiser... The Court finds no basis for distinguishing the Search Ad Market from the larger market for Internet advertising. Search-based advertising is reasonably interchangeable with other forms of Internet advertising. A website may choose to advertise via search-based advertising or by posting advertisements independently of any search. The Search Ad Market thus is too narrow to form a relevant market for antitrust purposes."

According to JupiterResearch's estimate Google's share of the U.S. online advertising market in 2006 was 17% -- one percentage point ahead of Yahoo.

Person v. Google, C 06-7297 JF (RS) (N.D. Cal. Mar. 16, 2007)

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