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in Advertising - 07 Jan, 2013
by Tech Journalist - no comments
ISP’s VS. Google war have begun, French Internet provider block Youtube ads

The laws of business can be compared to The law of conservation of energy“Nothing is lost, nothing is gained, everything is transformed”, This famous physics law can be applied with a minor change to the business operations of big companies thus both business and science can share this uniting law : “Nothing is lost, everything is transformed”, indeed no one company have a long term objective of offering Free services without having a direct (marketing) or indirect reason behind it (promoting other services).

 

 

After having said that, let’s agree that corporation are selfish entities that care only about their progress and growth, from this perspective we’ll approach the war that have just started between ISPs and Google, Internet service Providers (ISPs) business rely on offering an affordable and fast internet to their consumers, but Google’s video website Youtube, is using up most of their bandwidth, while they are getting nothing in return, and with the continuous growth of Youtube, they are found obliged to constantly upgrade their capacity while their prices remain the same. The ISPs – Google conflict was not resolved during the last December talks of the International Telecommunication Union in Dubai, due to objections by the United States and other countries on the  proposal that, would have required content providers to pay.

 

 

So while Google is making hundreds of millions of Youtube advertising, ISP’s have to continuously pay millions to be able to support the bandwidth use, and this bandwith is mainly consumed by the Google owned Youtube. In this situation, ISP’s are finding themselves obliged to either increase the price of their services and make the customer pay for this increase in video usage, such a solution will surely lead to losing customers, or option 2: to make Google pay or participate in the payment for the bandwidth used, and this obviously Google does not want.

 

 

This situation led to a standoff between one French ISP and Google, (at this time we can not call it a standoff yet, because Google who is under investigation by the European commission, have not reacted yet),the ISP in question FREE” (the second-largest Internet access provider in France with 5.2 million customer)  decided to catch Google where it hurts the most, advertising money (Adsense /Adwords), and in order not to appear discriminating against the search engine, Free applied an ad blocking software and hardware (it’s not known if the software auto-updates of only used on new installs) that will block all ads not only on Youtube. It is note worthy that there were previous reports that this ISP tried to give less bandwith to Youtube and other Google services which led to having the video site load very slowly.

 

 

At the End of the day, Someone should pay for the ever increasing video bandwidth, it will be either a price increase that the customer should cover, or the Search and Video Giant  should cover.

“The pipelines between Google and us are full at certain hours, and no one wants to take responsibility for adding capacity,” Neil said during an interview last year with the newsmagazine Nouvel Observateur. “It’s a classic problem that happens everywhere, but especially with Google.”

 

Free is owned by French Tech entrepreneur Xavier Niel (majority of shares), who also owns half the shares of Le Monde newspaper and is also the Founder of Kima Ventures (cofounded with Jeremie Berrebi) with a goal of investing in 100 startups in 2 years.

Update: FREE has temporarily lifted the block on ads served by Google after government intervention.

Xavier Niel

Xavier Niel

 

 

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