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David Drummond testifies before Senate Judiciary Committee

David Drummond testifies before Senate Judiciary Committee


The online advertising business
is complex, but my message to you today
is simple. Online advertising benefits
consumers, promotes free speech, and helps small
businesses succeed. Google’s acquisition of
DoubleClick will help advance these goals while protecting
consumer privacy in enabling greater innovation and
greater competition. Now in our experience, users
value our ads, because like our search results, they
connect them to the information, the products, and
the services that they seek. Our online advertising promotes
freer, more vigorous, and more diverse speech. We know that many bloggers and
many website owners actually can afford to dedicate
themselves full-time to that endeavor because of online
advertising. In fact, last year we paid
$3.3 three billion in advertising revenue to our
website partners, and it’s a great satisfaction to us that
we were able to help this proliferation of online
speech and activity. Our advertising network also
helps small businesses connect with consumers that they
otherwise wouldn’t be able to reach, and to do so affordably,
efficiently, and effectively. Let me give you an example. Allen Edmonds, the shoemaker
in Wisconsin, is a great example of how this works. Allen Edmonds has frequently
appeared as a sponsored link or ad to people searching for
terms like men’s dress shoes. Now according to Allen Edmonds’s
marketing director, the company’s online sales rose
40% in 2005 because of the type of advertising
that Google does. Mr. Chairman, there are
thousands of other companies throughout America, most
of them are very small businesses, that also advertise
with with us. Now we believe our acquisition
of DoubleClick will help us provide even more benefits to
consumers, support even more free speech, and help drive the
success of even more small businesses throughout
the country. By combining our advertising
network with DoubleClick’s display ad serving products
and technology, and by investing resources in the
display ad business, we think we’ll be able to provide better
and more relevant advertising to consumers and
to help publishers and advertisers generate
more revenue. All of this new economic
activity will fuel the creation of a more rich, more
diverse content on the internet, which of course
benefits consumers and society at large. Now let me address the
issue of competition. We’re confident that our
purchase of DoubleClick does not raise anti-trust issues
because of one simple fact. Google and DoubleClick do not
compete with each other, despite what some
might be saying. DoubleClick does not buy ads,
does not sell ads, doesn’t buy or sell advertising space. What it does do is provide
technology tools that enable advertisers and publishers to
deliver and manage ads once they have come to terms. And
they’re many, many others who who do these sorts of things. The simplest way to look at this
is by using an analogy. Google is to DoubleClick what,
say, Amazon is to FedEx. Amazon sells books, FedEx
delivers them. And by analogy, we sell ads,
DoubleClick delivers ads. Two different businesses. Our acquisition of DoubleClick
does not foreclose other companies from competing in the
online advertising space. Recent acquisitions in the
space by Microsoft, a $6 billion acquisition of
aQuantive, which was a competitor of DoubleClick. Acquisitions by Yahoo, AOL, and
others are strong signals that the market believes the
space has a lot of room for growth, and a lot of room
for competition. Beyond the recent acquisitions,
there are thousands of companies that
are competing in selling online ad space. Now despite what they’re saying
here today, Microsoft actually appears to
agree with this. Brian McAndrews, who’s the
Microsoft Senior Vice President of the Advertiser and
Publisher Solutions Group, and before that the CEO of
aQuantive, recently commented that the online advertising
business is, and I quote, “in the first inning or second
inning of a long game here. ” He goes on to say that “there is
no monopoly on innovation. I don’t think you’re going to
see two or three big players and then game over. There will continue to be a
broad range of companies. ” We certainly agree with that. And if it were one stray comment
in an unguarded sort of moment by a Microsoft
executive it would be one thing, but we’ve compiled a
lengthy list of similar statements from Microsoft senior
executives, all made after the announcement of the
DoubleClick transaction and after the aQuantive
transaction. And they completely
contradict what Microsoft’s saying here today. Really it seems like the only
place that Microsoft is making these arguments about a fear of
of declining competition in the online space is here
in Washington. I’d be happy to discuss this
list of quotes during Q & A, or to submit a following the
hearing, with your permission. Now my final point today is that
Google will continue to protect its users’ privacy. For us, privacy does not begin
or end with our purchase of DoubleClick. Privacy is a user interest that
we’ve been protecting since our inception, and
will continue to innovate in this area. We spend a lot of time designing
our products on the principles of transparency
and choice. Transparency about what
information we collect and how we use it, and user choice about
whether to provide us with any personal information
at all. We were the first leading
internet company to decide to anonymize IP addresses and
cookies in our server logs after 18 months. Most of our products allow
people to use them anonymously, and do not use any
personally identifiable data unless we fully
disclose that use in our privacy policy. We support federal privacy
legislation and the development of global privacy
standards that can help build consumer trust and confidence
in the internet. We will also participate in the
FDC’s upcoming town hall on privacy and online
advertising, which we think is a great vehicle for further
examination of the subject. And we’ll continue to innovate
in this area. Looking ahead, we’re approaching
our entry into the ad serving business
with a fresh eye. Here’s some examples of the
privacy protections and innovations were working on
in third party, or this ad serving business. We’ll be including an opt out
mechanism so that people can choose not to have an
advertising cookie placed on their computer. And our industry-leading
decision to anonymize logs data after 18 months will also
cover any log data generated in our ad serving programs
that we’re testing now. We’re exploring the use of what
we’re calling crumbled cookies, so that user data
isn’t stored just in one cookie, which I know concerns
some people. And we’re working on better
forms of notice within ads so that users can better understand
who is behind the ads that they see. Now some of these ideas are
experiments, and like all experiments, they may or
they may not work out. But we’re excited to start
innovating in this area for our advertising customers and
for our users, to deliver better ads for them. Now as I conclude my testimony,
I’ll note that a lot of this activity seems like
a lot of activity and you may wonder why we focus on it. For one reason, protecting
privacy is really part of the Google culture and it’s also a
priority because our business simply depends on it. If our users don’t trust us with
the way we manage their information, they simply won’t
use us, and they’re one click away from switching to any
other competing product. I appreciate the opportunity to
discuss these issues with you in the question session, and
thank you for allowing me to testify.

2 thoughts on “David Drummond testifies before Senate Judiciary Committee

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