More Google

With the acquisition, Google gets access to a bigger market and hints at its probable future. Google is becoming a media buying firm on steroids.

A scan of the web commentary suggests that no one has really figured out the Google game plan. The company's advertising expertise is continually at odds with its content businesses. This purchase aggravates the search engine's bi-polar personality disorder. (The naysayers are pressuring the stock price downward.)

Although we'll be the first to admit that the haggard advertising industry is a sorry role model for anything, it's worth noting that companies that sell advertising do not generally own media (and vice versa). The sole exception is companies that sell their own ads. Conflict of interest in both the sales and content development processes preclude much expansion beyond in-house sales. Frankly, agencies that sell ads are better at the cross-sell and creative stuff than companies that manufacture content for a living.

Monster faces this issue on a daily basis with its advertising agency. Long term growht has always been hemmed in by the visceral sense that a media company simply can not offer objective advice about its competitors.

The Google case, of course, will be that automation solves the objectivity question. The actual argument is simply whether a large media company can be more successful by centralizing its sales than by having them decentralized and in service of a local market.

We think Google is headed for a split. While this acquisition makes Monster a more attractive target, Google itself will have to solve a bifurcation issue. The newspaper industry always solved the question by belittling its revenue source. Anyone can see that this attitude made the papers vulnerable to their current failures. If Google were to head down the road of having a glamorous content business fueled by a low-status advertising arm, it would be guaranteed the same fate as the newspapers.

We're sure that Google has committed to a plan that features two very separate operating units (probably more than arms length). One creates and publishes content; one distributes, schedules and purchases advertising. Neither business is new. The plan merits a lower stock price. (We bet our Google page ranking will fall after this article.)

If you are a user of Recruitment advertising, the Google boondoggle is interesting for the issues it raises, not the market difference it makes. Watching rich people spend their money is always good entertainment.

Don't forget to read the Bugler!

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