One FANG Chips

Google’s latest antitrust ruling presents some opportunities for our channel.

Written by Brook Schaaf

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Some conversations at Affiliate Summit East got me thinking about FANG stocks, a term coined back in 2013 by financial personality Jim Cramer. What began as Facebook, Amazon, Netflix, and Google later saw Apple added (FAANG), then Microsoft was added and Netflix removed (MAMAA — Facebook having become Meta and Google, Alphabet). 

The timing, as it turns out, was just right. On Monday, federal judge Amit Mehta ruled that Google illegally maintained a monopoly in search, blocking out would-be rivals like Bing and DuckDuckGo. “Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act.” This ruling may threaten the now-(in)famous deal with Apple and others to preinstall Google’s search engine. As The Information reported (paywall), “Such a move would wipe out more than $20 billion worth of commissions the iPhone maker receives from the deal annually. Google also has similar deals with Samsung and Firefox.” 

Interestingly, the Department of Justice filed a “motion for an adverse inference” over the weekend related to the destruction of evidence which is, shall we say, not a good look and may negatively influence its chance at appeal. (Remember that after the Microsoft trial it came out that Judge Penfield Jackson had bad-mouthed Bill Gates, which gave them a leg up in the appeal.). 

Moreover, Google has a separate antitrust case coming up in September related to its advertising. I was impressed that the search engine Perplexity.ai quickly recognized that the two cases are separate: “This case is separate from the recent ruling on Google’s search business… The upcoming trial stems from a lawsuit filed by the U.S. Department of Justice in January 2023, alleging that Google has illegally monopolized the digital advertising market.”

The remedy will be forthcoming. Assuming the judgment stands, I see two opportunities for the affiliate channel. 

First, a fractured market (i.e., multiple search engines with shares above, say, 5%) means that affiliate sites with great content, like HouseFresh, might be able to garner enough traffic and income even if Google gives them the cold shoulder. Indeed, some existing platforms might even facilitate bid systems to win customers. 

Second, note the word “commissions” above. In the ruling, the judge wrote, “Google pays huge sums to secure these preloaded defaults. Usually, the amount is calculated as a percentage of the advertising revenue that Google generates from queries run through the default search access points. This is known as ‘revenue share.’” 

It seems to me that the commission structure (revenue share) inherent in affiliate marketing has never been the most appealing thing for traditional executives but if it’s good enough for Google and Apple … I’m not saying people are going to start to think of this as an affiliate deal, but I am saying that if we emphasize the revenue share component, we might be able to reframe the affiliate channel and open up a lot more doors.