A refocused Axios

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Today, some thoughts on Google getting the scarlet M, why memes are the media format of the moment, a new episode of PvA, and for TRB members an examination of the pressures on Axios as even the most solid publishers aren't immune.

Google the monopolist

A federal judge has hung the M word on Google. This falls into the calling-a-spade-a-shovel category. I will leave exegesis of the Sherman Act to others. Google’s rivals have long accused it of using its dominance and stranglehold of the search market to muscle distribution deals. In the end, it was too good at this playbook because business practices become more problematic the more dominant a company becomes.

Google rose to dominance with a zany image and great PR. It got great ROI on the crab legs in the cafeteria, 20% time, scooters around campus, and “don’t be evil” mantra. But Google was also, as it happened, a sharp-elbowed capitalist that had no qualms about throwing its weight around. 

Its early rival Overture, who pioneered the paid search model that Google copied and perfected, would regularly complain to me, always on background, how Google was monopolizing search by cutting sweetheart deals with big distribution points like the 2002 AOL deal. The purpose of these deals was not to make money but to eliminate competition. Overture, which mostly syndicated search listings to others, couldn’t compete because it had to make money and Google was suffocating it. Yahoo ultimately bought Overture and other search assets but failed to make search very competitive for long. (Google settled patent-infringement claims with Yahoo prior to Google’s IPO.)

This playbook remained. Google moved on from locking up distribution on AOL to paying $20 billion to Apple to be the default search engine on the, er, dominant mobile operating system. Couple that with Android and you can see why DuckDuckGo isn’t much of a threat and why a $3 trillion company like Microsoft can spend a generation to get 10% of the search market.

Both Google and Microsoft before it have turned to variations of the same antitrust defense: 1. Consumers benefit from its bundling; 2. Its dominance is due to having the best product; 3. The market should be seen as much broader.

The case against Google will be followed in the fall with the DoJ’s case against Google’s, er, dominance of ad tech. Together these cases harken back to the government’s fight with Microsoft in the late 1990s. That fight tied up Microsoft in litigation and ultimately the dominance of Internet Explorer at the heart of the case faded. None of the proposed remedies for addressing the competitive issues with Google is without the downsides that come with any government market intervention. 

It is more likely than not the distribution deal with Apple will be off. That could push Apple to come up with its own version of AI search and outsource the advertising listings. It’s not too far-fetched to see the search market splintering and becoming far more competitive, with new entrants taking different approaches and vertical search gaining ground.  Similarly, a messy divestiture of Google’s ad tech assets isn’t far-fetched. 

These kinds of changes will cause volatility in the media ecosystem. They’re hardly imminent, however, as the government’s case against Microsoft stretched for three and a half years.

Rebaking the cookie

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Media is an execution game

Publishers are either getting ahead of AI or using it as an excuse. For all people like me write about AI, I’m reminded by Dotdash Meredith CEO Neil Vogel that AI hasn’t really impacted the market much, and DDM is very exposed to AI and search challenges.

And so far, DDM is... doing just fine. It estimates that AI Overviews are on 15% of search results pages in key categories like tech, health and finance. IAC CEO Joey Levin doesn't see an existential threat – and takes a shot at the robots' writing capabilities with a strategic deployment of scare quotes:

"Click-through rate differentials between pages with and without AI Overviews are minor so far, but it is still early and products change quickly, so the past isn’t prologue. We don’t expect consumers to rely on anonymous advice for their health, finances and cooking, so computers churning out AI 'content' should not either."

In the last quarter, it saw a 16% increase in quarterly digital ad revenue. I always look to its “grids” to see its sessions metrics. They’re back to growth, with core properties seeing 9% growth in sessions, and DDM is benefiting from industry wide signal loss by bringing forth its own first-party data product. It's programmatic ad rates were up 36% in the quarter, the company reported. Levin pronounced DDM as being "in excellent shape." It expects digital revenue to expand 15% in the third quarter.

Memes matter

Memes are proving to be the media format of the moment. The Olympics and presidential election are cases in point. I haven’t watched a minute of the Olympics on TV, but I have been immersed with Steven on the pommel horse, the casual Turkish shooter, the French pole vaulter who dislodged the bar in a novel manner.

The chaos of the Information Space creates incentives to inject memes into the maelstrom to shift attention and with it influence. The presidential election is a giant marketing exercise, so its lessons will be adopted more broadly.

• Kamala Harris could very well be memed into the White House. She has long been panned for her traditional political skills, but as a presidential candidate in the Information Space, she has proven to be very memeable. The TikTok Girlies are activated. And while I generally don’t believe young people swing elections, I’m also cognizant that girls run the internet. 
• Tim Walz was an unknown a couple weeks ago, but memed his way into the vice presidential nomination by injecting the “weird” meme into the political consciousness. He even name-checked the JD Vance had sex with a couch meme in his first speech as the veep candidate. The campaign rushed out merch that mimics the "Midwest Princess" hat popularized by pop star Chappel Roan.
• RFK Jr tried to get ahead of (yet another) bizarre story — brainworm? — with an equally bizarre casual explanation of keeping a dead baby bear in his car and dumping it in Central Park. Soon he was a meme for casually explaining the fall of Constantinople and various other catastrophes.
• Trump is a walking meme. The man is very memeable. His obsession with nicknames – he basically ended the Bush dynasty with "Low Energy Jeb" – is a case in point of weaponizing memes.

Noted meme fan Elon Musk sees memes as a complex media format that is able to pack a lot of information into a small package. Maybe. Most memes seem to me closer to what I’d find in the fart spray aisle at Spencer Gifts in the Plymouth Meeting Mall. Still, it’s easy to dismiss things that seem silly, like a TikTok trend of coconut dances, but in the chaos of the Information Space, memes will be potent tools of influence. 

Monopolies and memes

On this week's episode, we discuss the likely outcomes for Google's antitrust problems, why memes are such a powerful media format, and the contrasting signals from DDM and Axios. Listen on Apple | Spotify | other podcast services

Refocusing at Axios

Lots of surprise that Axios cut 50 positions yesterday, or 10% of its workforce. Publishing has gone through a meat grinder. Axios was one of the exceptions, focusing on a protected ad category of companies influencing government officials. But nobody is immune to the current pressures.