Google South Africa has abused its position of dominance in the online advertising market and has used underhand methods to win a major online advertising account with the SA Yellow Pages website. [Update: Allegedly, of course.]
You can read the full press release here. In a nutshell, Entelligence was awarded the online marketing contract for SA Yellow Pages in June 2008. In effect, this means that Entelligence manages the advertising side of the Yellow Pages website. The company spends more than $100 000 with Google every 90 days and is therefore recognised by Google as a “Qualified Adwords Company”.
Late June, Entelligence met Google South Africa to discuss how the performance of Adsense ads could be improved on the Yellow Pages website. During this meeting, one can imagine that strategy was discussed. Clear actions on moving forward were agreed. Unfortunately, immediately post this meeting Google SA turned around and increased the cost per click ad on the Yellow Pages website from 60 cents to R2, and effectively started pitching for the Yellow Pages account itself.
In Entelligence’s words:
“… Google South Africa took Entelligence into their confidence, encouraged discussion around Entelligence’s strategy with respect to Yellow Pages, and allowed Entelligence to demonstrate their proprietary technology developed to manage Google AdWords specifically for Yellow Pages.”
Most worrying is the fact that Google SA has informed Entelligence that they
“will inhibit [their] ability to continue servicing Yellow Pages by refusing to renew [their] accounts held with Google and that they will prevent [them] from creating any new accounts in an attempt to service Yellow Pages”.
In effect, Google SA is seemingly looking at which Adsense accounts are most lucrative in South Africa and pitching for them directly. This may or may not be fair business practice, but to
- partake in strategic discussions with an underhand motive, and
- prevent a company from pitching for a contract by limiting the services it offers to competitors
stinks and should be strongly discouraged. Also, it shows a huge disrespect to the companies that have grown the Google Adsense culture in South Africa.
Google’s motto or mantra is “Do no evil”. In fact, on its corporate website it clearly states that it believes that “You can make money without doing evil”. This incident, however, seems to go strongly against that belief.
Here is what I am hoping: I am hoping that some fool at Google SA got excited by the prospect of landing a Yellow Pages account and did not bother to apply the “Do no evil” mantra, or to clear it with his boss. I am hoping that the shit has hit the fan at Google SA while they try to rectify the situation, and I am hoping that the Google HQ is looking at this incident through a magnifying glass and monitoring its outcome.
In the meantime, Entelligence has filed a formal complaint with the Competition Commission.
Google does a lot of things very well. But Google SA has, apparently, a lot to learn.
[Update: I have been advised, quite rightly, that this might be a slightly too one-sided article. I am, after all, working off a press release of one party. Google is staying quiet on this story for now, which is a pity.]
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