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The Google Shakedown
futureofcapitalism.com

"Google and Cisco to Join White House Effort to Promote Entrepreneurship" is the headline over a Bloomberg News article about Google's announcement that it is "committing up to $100 million to Startup America Partnership member companies to enable entrepreneurs to promote their companies with Google advertising over the next year."

The Google blog post says what the White House announcement doesn't: participants will "receive a $1,000 Google match for $1,000 spent between June 1, 2011 and June 1, 2012." So it's not really free advertising, it's 50% off advertising, on a product for which Google's marginal costs are low and its operating margins are high. I wouldn't be surprised, in fact, if Google actually on a net basis increased its profits on the basis of this "commitment."

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The Google Shakedown
futureofcapitalism.com

"Google and Cisco to Join White House Effort to Promote Entrepreneurship" is the headline over a Bloomberg News article about Google's announcement that it is "committing up to $100 million to Startup America Partnership member companies to enable entrepreneurs to promote their companies with Google advertising over the next year."

The Google blog post says what the White House announcement doesn't: participants will "receive a $1,000 Google match for $1,000 spent between June 1, 2011 and June 1, 2012." So it's not really free advertising, it's 50% off advertising, on a product for which Google's marginal costs are low and its operating margins are high. I wouldn't be surprised, in fact, if Google actually on a net basis increased its profits on the basis of this "commitment."

Read More...


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Nicholas Johnston

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