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7/01/2006
  Why Microsoft can't buy PPC market share

Aaron Wall has a throw-away line in a post on Google Checkout that shows he understands the PPC market nature very well - he's listing the hypothetical threats to Google's dominance in PPC ads:

Microsoft decides to spend billions of dollars operating a distributed ad network at a loss to steal market share (although this is not too likely because this would create an arbitrage opportunity which would be heavily abused by people like me)

Some commentators have said they think that Microsoft should give 100% rev share on their version of AdSense - though that wouldn't hurt Google's profits much, since they don't make much profit from AdSense.

Continuing along that line, some people think that Microsoft should subsidize their ad network just to cause pain to Google and to gain market share.

Aaron points out something subtle but obvious - the benificiaries would be the ad arbitrageurs. It would be a huge gift from Microsoft.

Aaron understands better than most the market-nature of the PPC ad world.

BTW, I disagree with Aaron about the main point of his Google Checkout post. I think Checkout is a very serious threat to eBay.

 


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