@scleland: Why Did Google & Facebook Stop Competing With Each Other?

Good thing Renata Hesse is on the case!

The evidence shows that Google & Facebook — by far the world’s most dominant Internet gatekeepers – are not an Internet advertising “duopoly,” but worse, two separate Internet advertising monopoly platforms, one in search advertising and another in social media advertising.

That’s because search and social media advertising are not competitive substitutes for each other, but are proving to be synergistic advertising complements to each other in company marketing campaigns, because generally search advertising excels at lead generation and local business visibility while social media advertising generally excels at building brand awareness and interactivity with consumers.

Tellingly, after beginning to directly compete in social in 2011 and in search in 2013, Google and Facebook both abruptly, coincidentally, and effectively stopped competing directly with each other in both the search and social media markets in 2014.

Apparently, they either jointly agreed in 2014 to divide up the marketplace and no longer directly compete with each other to maximize their exceptional mobile growth and profitability; or they concluded independently — from their initial directly competitive forays into the other’s core markets — that the other commanded unbeatable monopoly network effects, so not directly competing with each other would maximize their exceptional mobile growth and profitability.

This profound lack of competition among the world’s two most dominant Internet edge platforms is highly relevant to: the EU antitrust charges against Google in search, mobile, and advertising, and the EU’s privacy investigations into Google and Facebook; antitrust authorities’ antitrust investigations of Google and these markets in the U.S. and around the world; and also the FCC’s core competitive assumptions underlying its Open Internet Order, and its proposed Title II ISP privacy rules and Set-Top Box unbundling rules.

Read the post on the Precursor Blog

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