So, what happened... really? Answers vary.
- Coulda been a malvertising-infused ad campaign and Google decided it can't risk campaigns coming through AppNexus anymore. Seems lame. Can't believe they'd just boot 'em for that with little warning.
- As some have suggested and Kafka notes, coulda been a strategic move to thwart a competitor like Microsoft as it gets into the display game through their AppNexus investment. Doing this during the busy holiday buying season when impression volumes are at their highest would potentially cause the greatest damage. I don't know about this one.. still seems so "early days". And, if AppNexus were to run into trouble because of this, another Microsoft infusion would be a piece of cake. Microsoft makes BILLIONS in PROFIT each quarter as you may recall.
- Others see the Google monolith just moving slowly, perhaps ploddingly so, and this was inevitable as Google looks to have all demand partners buying direct instead of through intermediaries. This would echo Google's current positioning with yield optimizers/aggregators who can't offer supply through the DoubleClick Ad Exchange as they are seen as intermediaries. I choose this answer.
But, let's fantasize a bit. [Ripple dissolve] No, I mean it. [SUPER Ripple dissolve] What could be the next, big strategic step here for Google?
This could inhibit liquidity in the short term, but Google could circumvent this by giving away all the serving and bidding tools for free. That's gonna be hard to resist AND drive liquidity in the long term.
Yahoo!, AppNexus and others could retaliate and say "no" to Invite Media/DFA buying, but suddenly they've lost a big demand partner which in turns drives publishers to Google looking for better yield. (This will be a great movie thriller. I can see Matt Damon playing AppNexus CEO Brian O'Kelley, can't you?) Anyway, that ain't gonna work for Yahoo!/AppNexus etc. Other big players may be in the game at this point, too, like Cisco, Dell and Oracle which end up buying smart, smaller ad tech solutions. It won't matter. The infrastructure guys don't have the digital ad sophistication, experience and - most importantly - publisher inventory to win. And then there's time - this game will be played very quickly.
Back to the story!... so the Google competitors cut margins on their own tools or make them free in order to compete, but the blackbox margins of AdSense aren't available to them and steadily they start hurting, and then start screaming about anti-trust concerns. That may be their only hope.
Who's your Daddy? Why Google, of course.
The Bigger Picture
Can you imagine getting your Internet/TV/Phone for free through a high-speed, wireless connection provided by Google? Coming soon!
And the sites you can access are only sites that have agreed to rules of the Google Internet. Net neutrality doesn't apply - this is a new Internet, separate Google pipes. Go ahead and use the old one, but Google isn't going to be there.
And of course every site on the planet - except those owned by News Corp and a few others - will line up. Google will let your site into the Google Internet which allows for the free flow of data (using Google rules - the key) with protections for the consumer. It doesn't want to run afoul of the government, after all.
So, it's not that Google will steal the Internet, it will just create a new one - its own owned-and-operated version of it. It's not diabolical, it's business. Google thinks it can do the Internet better. That IS the end game. I'm not sure they even know it. Facebook might be there with its own version of the Internet, too. And, of course, these new Internets will all run nicely on Apple computers that will burn out every 2.5 years.
There. I said it. And, the Mayans were only off by 4 or 5 years.
I love audience-based buying!
By John Ebbert