Google's Ad Hegemony Makes World Nervous

(MoneyWatch)  Google has been talking about its view of mobile advertising as vital to its economic future. The company hasn't been sitting still and is currently dominating the space. But Google's success might well become what eventually brings it up short, as scared competitors, regulators, and partisans find ways to slow the company down.

The penetration in both the US and major European markets is impressive, anywhere from 63 percent to over 88 percent, even if the market is far from maturity. But the company's overarching control of regular online advertising is making many people nervous. Look at what newspapers are beginning to say:

In the early hours of Monday morning, the World Association of Newspapers posted a lengthy communiqué on its Web site calling the Google-Yahoo advertising partnership anti-competitive and urging regulators to block the deal. According to its Web site, the World Association of Newspapers represents 76 national newspaper associations and more than 18,000 publications in five continents. Its communiqué led to flurry of headlines that essentially said "Newspapers Around World Oppose Yahoo-Google Ad Deal."

The Newspaper Association of America, a member of the World Association of Newspapers, immediately declared that it had, indeed, taken no position regarding the deal, so that just leaves-- newspapers everywhere else in the world.

EU officials have decided to probe the deal to see if it would affect Europe. Back in this country, the Association of National Advertisers has officially objected to the deal.

There should be little surprise that the Google-Yahoo relationship -- shy of marriage but more significant than "just good friends" -- is garnering these reactions. Competitors want to keep from being locked out. Advertisers fear even more of a monopoly that they assume won't be helpful to them in the long run. (Is raising prices and making more money acceptable under the "do no evil" policy?) Moves like buying a Korean blogging company and platform won't make anyone less nervous.

It's this type of fear that can topple, or at least cripple, companies. IBM and Microsoft have both felt the pain of backlash, and Google seems to have learned nothing about avoiding the image of being grasping and even arrogant. If the company continues plunging head on, although it may make shareholders happy, it risks creating conditions that will encourage people to actively stop it.

That will leave the door open for others, and there are some interesting players in the wings. Forget Yahoo and Microsoft for a moment. How about Amazon? I've mentioned before the signs that one of its interests may be a fully blown advertising network. Well, apparently the company has hired a top online ad person from Microsoft.

Analysts may see Google has having things locked up, but that's the danger of projecting markets from historic numbers. When conditions change, they often do so quickly, and it wouldn't take much to encourage a number of able competitors to put the pressure on.

Cartoon via Flickr user INeedCoffee, CC 2.0.