Day 7: Did Google Just Win?

This is the coverage of the remedies trial in US v. Google. I’ll be in Virginia writing every day on the courtroom activities.

Day 7: Did Google Just Win?

I was prepared for today to be dull, dull, dull. We were told that three of Google’s remaining four witnesses were experts, which in my vast experience as a court watcher (going on three weeks total) I’ve learned means endless questions and cross-examinations about made up facts, slanted to make the party paying the money look good.

The first witness of the day, Dr. Shane Goodwin, fit the bill. Dr. Goodwin is an expert in corporate M&A and he testified that there won’t be bidding for AdX since there are unanswered questions about the scope of the divestment, the employees, revenues, and assets. Of course, all these questions would clearly be answered before actually conducting a sale, but let’s ignore that obvious fact and continue the testimony. We found out that Google commissioned investment banking firm Lazard to look into selling AdX back in 2020, but no matter, the expert says it simply can’t be sold.

The second witness was economics expert Andres Lerner, who testified about the economic problems of the DOJ’s proposed remedies. I’m not going to spend much time on Dr. Lerner’s testimony, but more or less it boils down to a) the remedies go too far; b) the display market is in rapid decline; c) divesting AdX would make it worse. I may cover this more tomorrow after the cross-exam is done.

I want to spend time talking about the third witness, Elizabeth Douglas, the CEO of wikiHow. I will admit I was expecting the worst from this witness. I even showed up a little late (so disrespectful, I apologize). I was sure that Google was bringing their one and only publisher witness to say a bunch of platitudes about how great the company is and how they are just like mom and apple pie. Instead, I think Douglas’ testimony was the first time the judge got to see the reality of publisher’s existence and the potential impact of disruption in the display market to them.

A struggling publisher

wikiHow is taking on the chin from AI. Traffic is dropping precipitously, and so is ad revenue. Douglas is fighting for survival, and she said as much. I’m going to include some quotes from the stand:

On AI: “Our business has to change ot we’re going out of business.”

On the remedies in general: “It worries me if that all has to change. If you take Google out of the ad market…I’m worried the whole internet is being left on its own with some good actors and some bad actors.”

On AdX divestiture: “Oh no, another change I have to deal with.”

On ad tech in general: “I really want to spend my time on all the problems we’re having with AI and don’t want to worry about ads right now.”

On competition: “There’s no SSP I trust as much as Google.”

On AdX charging too much: “Google’s 20% rate is similar to competitive SSPs…what we see is net to publishers…I don’t spend a lot of time thinking about revenue share.”

Do the remedies really benefit this type of publisher?

Douglas was asked her thoughts about several of the remedies:

On the open source final auction logic:

• Concerned about latency

• Not interested in open source

• Concerned about data movement

• Concerned about having to put in any effort on this.

On AdX spin:

• Worried about who will own it, will they be reputable and pay on time

• Will it drive incremental revenue?

• Who will support it?

• Worried about ad quality

On DFP spin:

• They use the free version (f/k/a GAM Small Business), why would a new owner still give it away for free?

• How will they get support?

• Will their costs go up?

Isn’t it Google’s fault though?

Obviously there’s a view that wikiHow is actually in an abusive relationship with Google, who is systematically destroying her business with AI while giving her meager earnings from the ad stack to keep her dependent. Maybe, but as we like to say in product management “that’s out of scope.” For the purposes of this specific remedies trial, Mrs. Douglas gave the court and the judge a view into the struggles of an open web publisher and clearly and unequivocally showed that the DOJ remedies were not perceived to be in their interests. Previous publisher testimony came from giants like News Corp, Daily Mail and Gannett, who value control and optimization about all else. I think the perspective from this witness today may have tipped the balance against divestiture.

One more quote from Mrs. Douglas:

“I’m here today because I’m worried about my business. We require the revenue we get from advertising to invest in our business and I’m worried about having to manage changes.”