David Drummond testifies before House Judiciary Committee
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David Drummond testifies before House Judiciary Committee

November 22, 2019

JOHN CONYERS: David Drummond
is a cultural aficionado of music that we work
together on. His brother is a professional
musician known to many of us. But Attorney Drummond’s senior
vice president for corporate development and is the chief
legal officer of Google. He leads Google teams for legal,
government relations, corporate development, and
new business development. We welcome you here today. DAVID DRUMMOND: Well, thank
you Chairman Conyers. Thanks, Ranking Member Chabot,
members of the Task Force. Thank you, and especially
Chairman Conyers, for reminding everyone how
little talent I have compared to my brother. And I’m very glad to
be here today. The internet is a dynamic and
competitive environment. And that’s due to the openness
that has been its hallmark from its inception. Our nonexclusive commercial
agreement with Yahoo will maintain and expand
that competition. It creates new efficiencies that
will benefit consumers, advertisers, and publishers,
while protecting privacy and spurring innovation. Now, when Yahoo chooses to use
our technology, consumers will see more relevant ads that
better connect them to the products and services that
they’re interested in. Advertisers will benefit from
better ad matching capability, improving the way that
they reach customers. And Web publishers, who place
Yahoo’s ads on their sites, will also see more revenue
from better ad matching. That’s why large and small
advertisers, ad agencies, and publishers have expressed their
support for this deal, including Publicis, Digitas,
Overstock, and even Microsoft’s own in-house ad
firm, Avenue A Razorfish, who recently called it, quote, good
news for advertisers. The fundamental point I’d like
to make today is that this agreement promotes ongoing
competition in online advertising. Let there be no doubt about this
point: Google and Yahoo will remain fierce competitors
in search and online advertising, and many other
products and services. Yahoo has said that it will
reinvest the revenue from this agreement into improving its
search engine and improving its other services. This continued competition
will help fuel innovation that’s good for the internet
users, good for the internet, good for the economy. Now, the fact that this
arrangement is made between competitors is not unusual. Commercial arrangements between
competitors are commonplace online and in
many other industries. And as Mr. Callahan said,
amongst the parties at this table, we’ve had such
relationships in the past. And they’re ongoing. And I trust authorities have
recognized that customers can benefit from these arrangements,
especially when one company has technical
expertise that enables another to improve its product. And we’re also excited that as
part of this agreement, Yahoo will make its instant
messaging network interoperable with Google’s. That’s a big step forward in
making instant messaging more like email, with users able to
communicate across different platforms more easily. Now, I’d like to clear up a few things about the agreement. First, unlike the other
alternatives that are being discussed, such as Microsoft
acquiring Yahoo’s search assets or taking over all of
Yahoo, this agreement will not remove a competitor from
the playing field. Yahoo will remain in the
business, in the search advertising business, in its
other businesses, and will continue to be a vigorous
competitor in all of them. Some would have you believe this
agreement will result in Google controlling nearly
all search advertising. The agreement does
no such thing. Yahoo will continue to operate
its own search platforms. It will sell ads to its
longstanding and deep base of advertisers, and continue to
operate its own ad option. The agreement merely gives them
the option to show some Google ads in cases where
Google ads are likely to generate more overall value,
that is, where Google ads increase the pie for everyone. It’s important to note that this
agreement is limited to the US and Canada, and
excludes emerging fields such as mobile. Simply put, Yahoo will
have every incentive. And as you’ve heard from Mr.
Callahan, they have every intention of remaining in the
business, and indeed, expanding their business,
in search and on the rest of the internet. Second, the agreement does not
an increase Google’s share of search traffic because Yahoo
will continue to run its own algorithmic search engine. Third, the agreement does not
set any legal price floor. Microsoft would have you believe
that the additional revenue that Yahoo and Google
might generate from this agreement will be solely the
result of higher prices. Nothing could be further
from the truth. And it really reflects a
fundamental misunderstanding of how search monetization
works. This is a very important
point. The fact is, we expect the
primary driver of additional revenue will be more relevant
ads being delivered to more users, who will then click on
those ads in greater numbers. In other words, we’re
not looking to sell ads at higher prices. We’re looking to
sell more ads. And with better targeted
advertising, what you wind up with is more leads for
advertisers, more conversions for them, and greater value. Again, the pie is bigger
than it was before. This is good for everyone. Users see more relevant ads. Advertisers connect with
more interested users. And Yahoo and its partners sell
more advertising space. Fourth, the agreement also
upholds Google’s deeply held commitment to protecting
user privacy. As Google supplies ads to
Yahoo and its partners, personally identifiable
information of internet users will not be shared between
the companies. Now, let me conclude today with
some frank talk, here. The most energetic critic of
this agreement is Microsoft, who, of course, is a major
competitor of ours and not exactly a mom and pop shop. This is the same Microsoft whose
CEO said he was going to, quote, kill Google, along
with some other salty language that I can’t repeat here. It’s the same Microsoft that has
a 90% share of operating systems, a 95% share of
productivity software, an 80% share of the browser market–
you get the picture– a desktop monopoly that
Microsoft, frankly, could use to harm the next phase of the
internet, a very important phase of the internet that
we call cloud computing. Most importantly, this is the
same Microsoft that’s actively trying to buy, or at
least destabilize– from what we can tell– Yahoo and eliminate them
as a competitor. So if you think all of that
gives them a bit of an incentive to oppose the
agreement, you’re right. In conclusion, let me just
say that openness, interoperability, and
competition are central to our culture at Google. It’s central to the vibrancy of
the internet and the growth of free markets. Unlike on the desktop,
competition on the internet has always been and will
continue to be a click away. Thank you, and I look forward
to answering your questions.

Only registered users can comment.

  1. I love the way M$ is portrayed as the bad guy here just because they don't like Google. (not an M$ fan btw but this is unfairly biased) This deal would severely monopolize the online ad industry no matter what Google says and I hope the committee finds legal issue with it.

  2. Google is doing what is good for their business and I would do the same if I was Google. HOWEVER I am a consumer and don't like monopolies. From their perspective of course this deal will seem good and fair, from M$ standpoint Google should be killed, and from my angle I hope both companies just put out good products and let me enjoy my technological life at little to no cost. A monopoly would jeopardize that so I voiced my opinion.

  3. senator conyers=cheater and a liar/sexual harasser. drummond, a liar, serial philanderer at goofgle, having multiple affairs with google subordinates….who should you believe? they all seem to be upstanding citizens…

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