TIM ARMSTRONG: So I just want to thank the FTC for having us
here today, and I want to do a few things.
One is just give a basic overview of Google's ad
business, and then talk a little bit about DoubleClick,
since it's already come up multiple times today.
But I'm president of of North America Ads and Commerce for
Google, and I've been at Google for about seven years,
really before Larry and Sergey were Larry and Sergey.
And one of the things I want to spend a little bit of time,
before I get into Google's business, just describing from
our point of view how important this topic is.
I think user trust and loyalty is probably the number one
thing that we concentrate on at Google, and I'll give you
examples in our business of that.
In general, for people who have longer memories, I think
if you remember back in the year 2000, 2001, 2002, the web
for users was a really tough place to be, and mainly due to
the advertising that was on the internet in those days.
One of the competitive advantages Google has had is
by focusing user trust and privacy, I think we've
actually been able to grow a nice business in search, and
we were hoping to get into the display ad business.
But our business really does start with that.
One of the concepts that we introduced in that timeframe
was really about relevancy and really serving less ads, and
having a better user experience on the internet.
And our businesses today really resolve around high
level of user privacy and trust in a
high level of relevance.
Today Google's business model does actually come down to the
word "trust." I think in essence our entire business,
both on the consumer side and on the business side, really
is competitive in nature from the fact that any user could
basically stop using our services with one click.
The same thing is true on the advertising side of our
business, and this is a really important point.
The vast majority of advertisers signed up in
Google systems are able to instantly cancel their
contracts with us.
So when you take a step back and think about user privacy
and user trust, Google has put a tremendous amount of
pressure on ourselves to deliver privacy and trust.
Because if we don't do it, I think we would see a big
change in our business and potentially overnight.
And so how I'm going to describe our business, I would
just hope that you would keep that in the back of your mind.
And then the second piece is around how we design our
products and services.
And our products and services are designed with two main
attributes in them.
One is a high level of transparency, and a high level
of transparency meaning that you know what you're getting
into when you sign up for things.
We try to collect the least amount of information in the
process but make it really transparent what you're doing.
And the second piece is really user choice.
So even if you do want to sign up for our products and
services, what are the user choice elements that you have,
and are able to opt in and opt out of things?
So advertising in Google, we have two main products.
One is called AdWords, and it's for advertisers, and one
is called AdSense, and it's for publishers.
We have hundreds of thousands of partners and advertisers on
these products and services.
AdWords, in essence, and the simplest way to think about it
is very contextually or content-based.
In general, if a user goes to Google search and types in the
term "hybrid SUV," it's likely that we're going to put ads
that are very relevant to the term "hybrid SUV" up on those
search results pages.
And if you use Google, I think you're used to seeing those.
The second piece of our business, which is the ad
business that we launched around 2002 or 2003, is the
content network, which is really AdSense for publishers.
And in essence, that same user might go to a content, let's
say a car review page, who reads about hybrid SUVs,
they'll probably see an ad that's been relevantly served
from Google based on that content.
So to be crystal clear about this, the vast majority of
Google's business today is based on content, and not as
much based on the behavioral targeting that has been
discussed today.
The web is changing, in terms of types of content that's on
the web, and I think we're continuing to update our
products and services around how the web is changing.
But we update our products and services really on the basis
of privacy and user trust at the core
element of those changes.
The DoubleClick piece in general, and for Commissioner
Leibowitz, I'm glad you brought up our competition,
because I think Google is seen as being a really large player
in the internet space.
I think we're a very small fish in a very big pond in the
display advertising business.
In general, and the people who are also mentioned who have
done acquisitions in this space, some of them are
actually larger than us from a market cap and business
perspective.
And I think that we would want to be able to be competitive
in the display business.
So we're excited to actually have worked with the FTC to
try to close that deal.
DoubleClick as a platform really allows customers to do
a couple things.
One is to basically compete in the display space is a
publisher-advertiser, and allows people to in essence
serve and track advertising.
The key point on user privacy and trust here is that
DoubleClick does not own the data that it serves.
The customers, publishers, and advertisers
actually own that data.
And DoubleClick relies on the customers, the publishers and
advertisers to use that data and to really work in that.
And in closing, I think we have stated publicly many
times how strongly we feel about user privacy and trust.
I think today the FTC, that's really the subject matter.
We're happy with it.
We think the internet is a much better
place because of that.
And I wanted to just close with four points.
One is that we will continue to work with any group that
wants to increase privacy and user trust on the internet.
We've been open about that, so we're happy to take any
proposals and discuss that.
Two is that there's a continuum of practices on the
internet, and we hope the FTC basically looks across the
continuum and helps companies who are doing it right, do it
better, and helps companies that aren't doing it right,
figure out how to do it better.
And third is to tread lightly.
I think that there's a tremendous
amount of user benefit.
Google has helped hundreds of thousands of content people
launch new properties on the web based on these services,
and we hope that the FTC recognizes that value and will
continue to allow us to do that in a way that's really
good for the world.
And the last piece is just on privacy.
I've been, again, at Google for seven years.
I also have been in the internet space since 1994.
Privacy and trust are probably the two words that are going
to make the internet the healthiest in the future.
And as important as that topic is today and the businesses
that up here today, I think it behooves all of us to focus on
this issue and really make sure that a healthy web and a
trust and safety web is going to be the best business
outcome for all of us long term.
And thanks for having us down here today.
FEMALE SPEAKER: Thank you, Tim.