ICYMI: Stratechery’s Ben Thompson – Yelp’s Complaints Against Google Are “A Bit Rich.”
Last week, tech analyst and author of the Stratechery newsletter Ben Thompson responded to 60 Minutes’ report on Google and competition policy. Thompson’s piece pointed out not only the various biases of the segment, but the incoherence of Yelp’s chief argument against Google as well. Some key takeaways are below.
As Thompson notes, 60 Minutes’ report on Google was “not exactly fair-and-balanced.” “The 60 Minutes report was not exactly fair-and-balanced; it featured an anti-tech-monopoly crusader, an anti-tech-monopoly activist, an anti-tech-monopoly regulator, and Yelp CEO Jeremy Stoppelman. And, in what seems highly unlikely to have been a coincidence, Yelp this week filed a new antitrust complaint in the EU against Google.” (Ben Thompson, “The Bill Gates Line,” Stratechery, 5/23/18)
Thompson points out three key flaws with Yelp’s position on Google’s answer box. “Yelp’s position, at least in this video, appears to be that Google’s answer box is anticompetitive because it only includes reviews and ratings from Google; presumably the situation could be resolved were Google to use sources like Yelp. There are three problems with this argument, though:
—First, the answer box originally included content scraped from sources like Yelp and other vertical search sites; under pressure from the FTC, driven in part by complaints from Yelp and other vertical search engines, Google agreed to stop doing so in 2013.
—Second, in a telling testament to the power of being on top of search results, Google’s ratings and reviews have improved considerably in the two years since that video was posted; this isn’t a static market (to be sure, this is an argument that could be used on both sides).
—Third — and this is the point of this article — what Yelp seems to want will only serve to make Google stronger.” (Ben Thompson, “The Bill Gates Line,” Stratechery, 5/23/18)
Instead, Yelp should be looking for ways to differentiate itself from Google. “I find Yelp’s complaints a bit besides the point: the company seems to be expending an awful lot of energy to regain the right to give Google the content Yelp worked hard to acquire. There is revenue there, of course, just as there is in the production of commodities generally, but without a sustainable cost advantage it’s not the best route to building a strong and durable business.” (Ben Thompson, “The Bill Gates Line,” Stratechery, 5/23/18)
Yelp is trying to have their cake and eat it too, bypassing Google on mobile while demanding prominent placement in search results. “It seems a bit rich that Yelp should be free to leverage its app to avoid Google completely, and yet demand that Google continue to feature Yelp prominently in its search results, particularly on mobile, where the Answer Box has particular utility.” (Ben Thompson, “The Bill Gates Line,” Stratechery, 5/23/18)