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  • 336.

    Moreover, the notifying party submitted that in a number of regions worldwide, Google faces competition from successful local search providers173. In addition, the notifying party noted that vertical search providers focusing on providing information to users interested in a particular type of search result or topic (such as job seekers, recruiters, house hunters, travellers, doctors and patients) would further constrain the merged entity, in particular because vertical search engines have the potential to provide more relevant and focused results to users than broad-based search engines and moreover, they have the potential to provide advertisers with audiences that are particularly interested in the products and services they offer.

  • 337.

    Despite these arguments put forward by the notifying party, on the basis of the results of the market investigation the Commission cannot exclude that Google has a sufficient degree of market power to be able to foreclose rivals in the ad serving market by way of the described bundling strategy, at least in search advertising or search intermediation (if search intermediation were to constitute a separate market), but most likely also in a possible overall intermediation market comprising both search and non-search intermediation174. Google is in a very strong position in the search ad segment with market shares ranging from 50-80% in the various Member States, both in direct sales (relevant for advertisers) and intermediation (relevant for advertisers and publishers). Google's search ad services are considered as those with the best ad targeting. It therefore seems that many advertisers depend on Google's search ad services and that the revenues derived from Google's (search) ad intermediation make Google an almost irreplaceable source of income for many publishers. In most cases, Google’s search ad competitors (including search ad networks) do not seem to be a real alternative as they do not achieve the same level of ad targeting. This is also reflected in Google's constantly growing market share in search ads.

338.

Only with regard to non-search intermediation is Google's market position

weaker. Although Google also has a significant non-search intermediation market share of at least 40%, Google seems to face considerable competition in this segment. Other players offering non-search intermediation such as TradeDoubler, Zanox (belonging to Axel Springer), AdLink, Interactive Media (belonging to Deutsche Telekom), Advertising.com and Lightningcast (both AOL/TimeWarner) and Tomorrow Focus, but also Yahoo! and Microsoft, Oridian, GWB media-marketing GmbH, WPP and VCMedia (belonging to ValueClick) exert significant competitive pressure on Google. In addition, there

173

According to a survey that Google conducted to measure the use of search engines in various countries, [40-50%]* of the 725 respondents in the Czech Republic named Seznam.cz as their primary search engine (compared to [10-20%]* for Google.com and Google.cz); [20-30%]* of the 284 respondents in Russia cited Yandex as their most used search engine, [20-30%]* cited Rambler and [<10%]* Google; in Ukraine, [10-20%]* cited Yandex, [10-20%]* cited Google, [10-20%]* cited Rambler and [10-20%]* AlltheWeb.com; in China, [60-70%]* of the 4 500 respondents named Baidu as their most used search engine (compared to [20-30%]* for Google).

174

If search intermediation and non-search intermediation were to belong to the same product market, Google's search ad offering would still hold such importance for many advertisers and publishers that it would not be possible to exclude that, even in this wider intermediation market, Google would have a sufficient degree of market power to foreclose rivals in the ad serving market.

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