It will be like they never left the Googleplex in Silicon Valley if this Washington, D.C., invasion of execs from the search giant keeps up.

The fourth new geek in town is Sumit Agarwal (pictured here), who was head of Google’s mobile product management and has become the deputy assistant secretary of defense for outreach and social media in the Office of the Assistant Secretary of Defense.

Phew! But what’s that? Poking with M-16s? The Berlin Wall? Tweeting troop movements?

In any case, it’s interesting to see so many key appointments in the tech arena going to one company, especially one so immersed now in national and international policy issues.

And especially since Google (GOOG) has begun spending so much money in D.C. on lobbying.

As I reported recently:

According to the most recent public reports filed by Google with the Senate on its lobbying spending there, the search giant has significantly increased its outlay in 2009 from the previous two years.

In 2007, Google spent a total of $1.52 million, which rose to $2.84 million in 2008.

And the 2009 total? Just over $4 million, according to the Lobbying Disclosure Act Database.

That’s probably no surprise given the ever-growing range of issues of concern to U.S. regulators due to Google’s increasing number of deals and because of many new and often controversial initiatives the company is forging forward with.

From pushing for approval of its DoubleClick acquisition in 2007 to its failed attempt to strike a search and online partnership with Yahoo (YHOO) in 2008 to last year’s wrangling with book publishers to 2010’s expected tussle over its $750 million purchase of mobile advertising start-up AdMob, Google’s presence in D.C. is only going to rise as its ambitions expand.

That’s still $2.7 million less than archrival Microsoft (MSFT) spent in 2009, but Google has been gaining on the software giant in a very short time.

In any case, these are former Googlers, who might or might not return to the mother ship at the end of their tenure.

But, for those keeping track, Agarwal will join:

* Former business development and product exec Katie Jacobs Stanton, who was the Obama administration’s director of citizen participation and now works in the State Department.

* Google’s top policy wonk, Andrew McLaughlin, who serves as deputy chief technology officer.

* And Sonal Shah, who worked at Google.org and is now director of the White House’s new Office of Social Innovation and Civic Participation.

While Microsoft has needed all the help it could hire in Washington, D.C., after its antitrust debacle many years ago, Google is quickly catching up to it as a tech power to be reckoned with in the nation’s capital.

According to the most recent public reports filed by Google (GOOG) with the Senate on its lobbying spending there, the search giant has significantly increased its outlay in 2009 from the previous two years.

In 2007–as you can see from the table below (click on the image once to make it larger)–Google spent a total of $1.52 million, which rose to $2.84 million in 2008.

And the 2009 total? Just over $4 million, according to the Lobbying Disclosure Act Database.

That’s probably no surprise given the ever-growing range of issues of concern to U.S. regulators due to Google’s increasing number of deals and because of many new and often controversial initiatives the company is forging forward with.

From pushing for approval of its DoubleClick acquisition in 2007 to its failed attempt to strike a search and online partnership with Yahoo (YHOO) in 2008 to last year’s wrangling with book publishers to 2010′s expected tussle over its $750 million purchase of mobile advertising start-up AdMob, Google’s presence in D.C. is only going to rise as its ambitions expand.

In the fourth quarter of 2009–according to its report, which you can read in its entirety below–Google spent $1.12 million lobbying the House and Senate, as well as the Federal Trade Commission and other government agencies, on topics such as “privacy and competition issues” related to online advertising, copyright laws and its book search settlement.

And this does not take into account Google’s spending in states across the country, as well as globally.

Interestingly, Microsoft’s reported lobbying spending in D.C.–which the software giant has been doing for much longer, with an even more complicated presence (can you say: consent decree?)–has declined in that same period, although it remains larger than Google’s.

In 2007, Microsoft (MSFT) spent $9 million, which fell slightly in 2008 to $8.9 million, before dropping to $6.72 million in 2009.

In the fourth quarter of 2009–according to its report, which you can also read in its entirety below–Microsoft spent $1.69 million buttonholing an alphabet soup of federal agencies and pols in the House and Senate on an even wider variety of issues than Google, including open government, visas, tax reform, free trade and, of course, “competition in the online advertising and software markets.”

Translation: Google-bashing in D.C.!

But now, it seems that Google’s ever-deeper lobbying wallet means turnabout is fair play.

As the stakes rise, check out Google’s and Microsoft’s most recent quarterly filings below:

Google

goog lobbying _ –
Microsoft

msft lobbying _ –

There they were, just minding their own business. And trying to generate a bit more business via the Wisconsin Tourism Federation, a 30-year-old industry lobbying group.

And then you smart alecks have to go and point out that the group’s acronym has become a popular way for kids these days to express befuddlement, in an R-rated way. (If you’re not sure what I’m talking about, go ahead and type “WTF” into a text message and send it off to some of your pals under the age of, say, 40. They’ll spell it out for you.)

So the WTF had to go and change its logo, Web site and name. If you’re looking for “Wisconsin tourism industry’s unified voice in government relations,” you should Google “Tourism Federation of Wisconsin” from now on.

What a hassle! All of which could have been avoided if you people were less reliant on acronyms and F-bombs.

But since that’s unlikely to change, somebody ought to give Finite Matters Ltd. a heads-up, too.

[Before and after logos via The Register]

Regulators and lawmakers are examining a widening number of issues–from exclusive handset deals to text-messaging rates–that could impact the largest U.S. wireless carriers, companies such as Verizon Wireless (VZ) and AT&T Inc. (T).

Hoping to stave off regulatory or congressional action, wireless carriers are snapping up former staffers for Democratic lawmakers and beefing up their lobbying operations.

Read the rest of this post on the original site

Are Google and Yahoo thinking of walking of away from their controversial search advertising deal, as reported in an amusingly hedged report in The Wall Street Journal last night?

How’s this for covering your bases in a story: “Following a meeting Thursday with the Justice Department, the companies could announce a decision to back away from the partnership–or a last-minute resolution, if one is reached–by the middle of next week, according to these sources.”

So they will back away unless, of course, they don’t and soon?

I would bet my Barry Manilow record collection, based on rumblings on Wednesday among those close to the case, that Google (GOOG) is a key whispery source here, sending a very public signal to the Justice Department that it would walk if pushed too far and leave regulators with egg on their faces for not letting the search giant help the struggling Yahoo.

But, let me be even more concrete, since The Journal report is dead wrong on at least one count. I can tell you for sure, based on many sources close to Yahoo (YHOO) that walking away is its last option, outside of a lawsuit, and it still hopes to make the partnership work.

That was underlined last night in a statement by Washington D.C.-based Yahoo spokeswoman Tracy Schmaler:

“We have been working with the Department of Justice regarding our agreement with Google and those discussions are ongoing. As we have said, we believe strongly that this agreement will strengthen Yahoo!’s competitive position in online advertising and will help to drive a more robust, higher quality Yahoo! marketplace for our advertisers, publishers and users.”

And I do not believe she is spinning here, even though that is her job.

Indeed, Yahoo can ill afford to pull out so easily, because it needs the revenue the deal might provide and simply cannot take the hit to its stock the collapse of the partnership would entail.

Such a series of one-two punches after its already tumultuous year would be devastating. It would also put Yahoo in the direct crosshairs of Microsoft CEO Steve Ballmer as its only partnering alternative in search.

Going it alone, of course, while preferable, is no longer an easy option for Yahoo, since keeping its No. 2 position in search would be expensive and brutal, especially sandwiched by No. 1 Google and No. 3 Microsoft (MSFT).

And, even more vexing, several sources at Time Warner (TWX) told me they are waiting until the resolution of the Yahoogle situation before consummating the ongoing merger discussions with Yahoo, because of the uncertainty of the impact on the Internet giant.

“It is linked to and just overhangs everything,” said one Yahoo exec about the long-pending Google partnership. “We want and need this deal, and would not be the ones to walk away first.”

As I have written, that would be Google, which benefits a lot from the will-they-or-won’t-they speculation here and cannot mind letting its intentions get some play (along with state attorneys general, who were also present at the Thursday meeting, and for whom leaking for simple self-aggrandizement is a basic character trait).

In fact, there was already much chatter that reached me on Wednesday that Google was sprinkling crumbs here and there to the media pigeons, all centered around the fact that it might balk at any onerous Justice Department demands, such as caps on search it could serve, or a consent decree that would require monitoring.

The Journal story mentioned the consent decree, which would be welcomed at Googleplex in Mountain view, Calif., like nonorganic mango nectar and bleached flour. The idea of regulators ferreting around its servers is simply not an option for the secretive company.

As I wrote early yesterday about the possibility of Google walking, in a predictive laundry list of options for Yahoogle earlier yesterday:

It seems far more likely that Google would do this than Yahoo, given its corporate culture is impatient with moving forward illogically (think Spock and you have the right picture of Google’s mindset).

I would imagine Google execs do not want to accept any caps or changes to the deal at all, and might conclude such restrictions make it not as worthwhile…

Plus, the joy of government regulators breathing down your neck 24/7 is, well, priceless, especially after Google CEO Eric Schmidt told regulators he would move forward with or without them.

While Google has now perhaps permanently put the government on notice that is must be more scrutinized than ever going forward with that unfortunate statement, I would be surprised if Google accepted any substantial changes to the deal.”

And, while it might be testing the Justice Department in hopes of salvaging the deal, I suspect Google–as much as its founders want to help out Yahoo CEO Jerry Yang and block Microsoft at the same time–is just now figuring out that walking might actually be the best move.

First off, even though it moved forward with the partnership, many top execs at the company were dead set against it, mostly due to the undue scrutiny it would bring to Google.

In fact, early on, some of its own operatives in D.C. expressed worry–largely ignored at HQ, where execs really do see themselves as not evil–about Google’s growing image as a scary behemoth.

Second, while Google seldom runs from a good fight–in fact, it often runs directly towards them–tangling with the federal government might be like crossing the 38th Parallel in Korea for the company. And you know how that went for General Douglas MacArthur!

It would certainly put the full attention of regulators on every move Google might make in the future, which is not good.

Third, the Yahoogle controversy, while being stoked by Microsoft’s relentless lobbying, has also brought into the light exactly how scared of Google’s power advertisers truly are.

And that would be terrified.

The company cannot simply blame Microsoft for manufacturing this fuss–even though it has surely pulled out all the stops in its bag of tricks.

In truth, whether Google chooses to accept this stark reality or not, many advertisers, publishers and public interest groups have been raising some real concerns about its dominance, which it ignores at its peril.

Lastly and perhaps most importantly, times have changed drastically as the economy has tanked.

Thus, Google–like a lot of other tech firms–has been engaged in a very serious company-wide appraisal of its business in the downturn.

One of Google’s internal mantras, I have been told by many inside and outside the company, is a variation of this phrase: Feed the winners, starve the losers.

It would come as no surprise, given the initial internal doubt about the partnership, that the Yahoogle deal might have suddenly become perceived at the company as a loser, and access to Google’s fabulous cafeteria might be about to be cut off.

Whatever Google’s true intentions, in playing chicken, it is courting danger.

According to Wikipedia, “the principle of the game is that while each player prefers not to yield to the other, the outcome where neither player yields is the worst possible one for both players.”

As in, if everyone is trying to win, it always ends in a fatal crash.

Please see this disclosure related to me and Google.

(Quick synopsis of the extremely obvious: Once-politically dopey Microsoft has gone all K Street, although stumbly Google is learning fast to line up its lobbying ducks too! Mayhem to ensue.)

Thank goodness then for the liveliest part, which came when the Google (GOOG) and Microsoft (MSFT) talking heads squared off.

Just like the dudes pictured here. Schwiiiiing!

Sadly, there is no word from the PR person for Yahoo (YHOO), who is probably the smartest one of the three for not entering the fray.

Because, if you close yours eyes, the email messages to the Times’s reporter from the pair sound almost like the spokesmen for dueling presidential candidates and are just as illuminating (except “cacophony of concerns” is kind of a pretty turn of phrase)!

But you be the judge:

Microsoft spokesman Jack Evans:

There’s an old rule in debate: if you’re not winning on substance, talk about the process. Anyone who suggests that lobbying by one party is responsible for the overwhelming opposition to the deal simply isn’t listening to the cacophony of concerns expressed by advertisers, publishers, consumer groups, legal experts and lawmakers.

Google spokesman Adam Kovacevich:

There is no doubt that Microsoft has been the most energetic opponent of this agreement and has worked hard from behind the scenes to generate much of the opposition to this deal. But most people in Washington have dismissed those efforts as a big company simply trying to slow down its competitors.

Please see this disclosure related to me and Google.

You have to admire the sledgehammer stylings of Google CEO Eric Schmidt, who loves to accuse Microsoft (justifiably, I might add) of bullying lobbying tactics in our nation’s capital, in the latest moves in the regulatory fight over the controversial search advertising outsourcing partnership that Yahoo and Google have struck.

Today, just days before the Justice Department will decide whether to move ahead with a lawsuit to stop the Yahoogle deal from proceeding or let it move forward with some other remedy or tweaking, Schmidt announced that he would be campaigning for Democratic presidential candidate Sen. Barack Obama in the last two weeks of the election.

Schmidt said in an interview that it was a personal endorsement and not from the company, even though many of its top execs are longtime supporters of Obama.

“I’m doing this personally,” he said. “Google is officially neutral.”

Well maybe so, and Schmidt has long been politically active himself.

But I cannot help but be struck by the perfect timing of the announcement, right as government officials under the Bush administration must make a move before the election makes them unable to do so.

(Then again, if Schmidt had endorsed Obama after any move by the government, it probably would have looked worse.)

In any case, it now makes any action by Washington policymakers even more complex.

To begin, Assistant Attorney General for Antitrust Thomas Barnett (pictured here), who will be leaving that post after the November election, has not been much of a trustbuster, to say the least, taking a mostly hands-off attitude toward business regulation.

But, in taking a long look at the deal in the first place, a partnership that does not actually need Justice Department approval to move forward, and hiring an outside counsel too, Barnett has also put himself out on a limb.

Thus, he is likely not to pat Yahoo (YHOO) and Google (GOOG) on the back and wish them good luck in their exciting endeavor.

That’s especially true given that a wide range of advertisers has expressed worries about the deal, which they say will lift online search ad prices and create a dangerous duopoly, along with public interest groups that have called the deal dangerous. Plus, there are also the many other special interest groups, all jacked up by Microsoft’s lobbying.

(It still surprises me up that some reports find it shocking that Microsoft is being aggressive here–helloooooo–Google would do exactly the same if the tables were turned.)

Google and Yahoo are arguing that the deal is nonexclusive, does not violate antitrust laws and that prices will not rise since they are determined by auction.

Still, sources close to all parties–Yahoo, Google and Microsoft (MSFT)–said the decision from government regulators, expected as early as this Wednesday, could still go a number of ways.

Under one scenario, the government could file a lawsuit and ask for an injunction to stop the deal from starting at all.

This move would be the most drastic of all. And, more to the point, it is hardest to prove, because there is no actual damage yet to point to as a result of the deal, even if the pair do control upward of 80 percent of the search market.

Under a second, the Justice Department could file a lawsuit opposing the deal, but not ask that it be stopped.

That means that the Yahoo and Google deal could go forward with implementation, even with the suit hanging over its head. It is a move that would provide a lot of data to determine the true impact of the No. 1 and No. 2 search players being in business together.

Under a third scenario, regulators could give Google and Yahoo tacit approval for the deal, with certain new rules about caps or monitoring that are agreed to in advance.

This option is the most complicated, since it is hard to determine what is dangerous and what is not in the fast-moving world of search. Will the Justice Department have a monitor sitting cluelessly next to Yahoo and Google engineers as they fiddle with the algorithm?

Still some sort of new rules to the deal are expected, if Justice takes a pass on a lawsuit.

“They are not going to hold a parade for us, and it is obvious they are interested in putting appropriate guardrails in place,” said one source close to Yahoo and Google. “But they might just say, ‘Go ahead, but we are watching you very carefully.’”

Under a fourth scenario, which Google is pushing for strongly, the Justice Department could simply pass on taking any action at all.

In that case, which seems unlikely, it is not without possibility that some advertisers or even Microsoft could go to court to seek their own injunctions, although that would be extreme.

Microsoft could also ask, given that the Yahoogle deal is nonexclusive, to make a similar deal with Yahoo. If it is rejected, the software giant could use that as proof that it is not.

But what is perhaps most interesting is that Yahoo and Google have not completely agreed as to how to handle this difficult process.

Yahoo, which has only recently become more active in lobbying for the deal, has been more willing to allow the government to set parameters in order to get regulatory blessing.

The company has also been quietly telling advertisers worried about it there are moves to come–Yahoo execs are obviously referring to a possible merger deal with Time Warner over its AOL unit–that mean that advertisers should be less scared of Yahoo becoming a satellite of Google.

Google, as is typical for it, has been more aggressive in its stance, holding out for less–if any–tweaking of the original Yahoogle deal.

Even its partner Yahoo thinks the powerful Internet giant has had a tin ear in this regard so far, with Yahoo execs cringing when Schmidt was widely quoted as saying that the deal would move forward with or without Justice Department approval.

The statement by Schmidt, in which he also added, “time is money in our business,” made him seem a bit arrogant about the role policymakers have.

Obviously, Schmidt misspoke, which all neophyte politicians tend to do now and again.

Today, he was much more circumspect, although he still managed to get a dig–or was it a warning?–in.

“My sense is, the Justice Department makes judgments on these issues independent of politics,” Schmidt said, priming the pump perfectly. “It would be unfair to Justice to imply [that supporting Sen. Obama] would make a difference.”

Yes, that would be completely unfair.

Please see this disclosure related to me and Google.

According to a new report [PDF] from the Computer and Communications Industry Association, industries that rely on copyrights to drive their business contribute $1.3 trillion in annual revenue to the U.S. economy. Industries that rely on “fair use” exceptions to those copyrights contribute $4.5 trillion annually.

“Much of the unprecedented economic growth of the past 10 years can actually be credited to the doctrine of fair use, as the Internet itself depends on the ability to use content in a limited and nonlicensed manner,” said Ed Black, president and chief executive officer of the CCIA, who cautioned against “unintended consequences of perhaps well-meaning, but overbroad copyright regulation.”

Which is about what you’d expect from a computer-industry lobbying group whose membership includes companies like Google and Yahoo, both of which have benefited from unlicensed usage of copyright materials. But even discounting for trade group overstatement, the idea that fair-use-dependent industries account for a sixth of the nation’s GDP seems ludicrous, as Nick Carr caustically notes over at Rough Type.

Even by the woeful standards of the bespoke research industry, this study is a crock. It’s not just bad; it’s absurd. What the authors have done is to define the ‘fair-use economy’ so broadly that it encompasses any business with even the most tangential relationship to the free use of copyrighted materials. Here’s an example of the tortured logic by which they force-fit vast, multifaceted industries into the ‘fair use’ category: Because ‘recent advances in processing speed and software functionality are being used to take advantage of the richer multi-media experience now available from the web,’ then the entire ‘computer and peripheral equipment manufacturing industry’ qualifies as a ‘fair-use industry.’ As does the entire ‘audio & video equipment manufacturing’ business. And the entire software publishing industry. And the entire telecommunications industry. And–hey, why not?–the entire insurance industry. Stock markets and commodity exchanges? Sure, throw them in, too. … Can’t industry groups make their points without stretching the truth beyond recognition and, in the process, insulting everyone’s intelligence? Fair use deserves better.”

Patton Boggs has some pretty big legal guns in its antitrust arsenal, among them Antitrust Modernization Commission vice chairman and former Clinton White House attorney Jonathan Yarowsky.

Course Google’s packing quite a bit of lobbyist heat these days, too: The Podesta Group, Makan Delrahim (former deputy assistant attorney general in the Justice Department’s antitrust division) and former Republican U.S. Sens. Dan Coats and Connie Mack–both partners in the Washington law firm of King & Spaulding–are all helping to steer the company through regulatory approvals in its proposed acquisition of DoubleClick.

It seems Martin is keen on the idea of setting aside some of the auction spectrum for an open wireless platform, something Google’s been pushing for–hard–inside the Beltway. “Whoever wins this spectrum has to provide … truly open broadband network–one that will open the door to a lot of innovative services for consumers,” Martin told USA Today. In practice, he said, “You can use any wireless device and download any mobile broadband application, with no restrictions.”

As you might imagine, Google was more than a little bit pleased to learn that Martin’s considering setting aside a portion of the available spectrum for an “open” network. “There is now potentially positive news coming out of the FCC,” Richard Whitt, Google’s Washington telecom and media counsel, wrote in a post to the company’s policy blog. “Chairman Kevin Martin apparently is about to circulate proposed auction rules to his fellow commissioners, and we’re hearing through the proverbial grapevine that his proposal includes several of the open-platform conditions we have recommended. If these reports are accurate, we are most encouraged by this favorable development. Obviously we’ll need to see the fine print, but such a proposal would represent a step forward for new, innovative entrants to the broadband market.”

It may well do just that–assuming it’s not strangled in the crib by incumbent telecom carriers first. Which is a distinct possibility given their clout in Washington. “FCC Chairman Martin’s net-neutrality regulation conditions amount to a multibillion corporate-welfare subsidy grant to Google, because the proposed rules apparently are specifically rigged to benefit Google’s Open Internet Coalition,” said Scott Cleland, chairman of Net Competition, a group that represents the telecommunications and cable industries. “If Google or any market player wanted to offer net neutrality/open access over this prime 700 MHz spectrum, Google could compete in the free-market auction, bid the most and offer a net neutrality/open access service. … It is outrageous that the FCC chairman fell for Google’s poverty plea for a de facto auction subsidy and price break that will shortchange the American taxpayer the billions of dollars that a free and open competitive auction would raise.”

“I’ve never seen a tech company ramp up faster than they have in the last year or two,” tech lobbyist Ralph Hellmann told the Mercury News. “They’re using all the tools in the lobbying tool kit.”

Indeed, earlier this week, Google announced the official launch of its “Public Policy Blog,” a mouthpiece for its views on government and politics. “We’re seeking to do public-policy advocacy in a Googley way,” Andrew McLaughlin, director of public policy and government affairs at Google, explained. “Yes, we’re a multinational corporation that argues for our positions before officials, legislators and opinion leaders. At the same time, we want our users to be part of the effort, to know what we’re saying and why, and to help us refine and improve our policy positions and advocacy strategies. With input and ideas from our users, we’ll surely do a better job of fighting for our common interests.”

And remember, “Don’t be evil” isn’t just a motto, it’s a way of life, right?

“Google is not a conventional company,” company founders Larry Page and Sergey Brin said when they announced Google’s Dutch auction IPO a few years back. “We do not intend to become one.” Except when it comes to politics …

“Like Microsoft and other companies before it, Google has decided it will have to start playing the Washington game,” Cato Institute Executive Vice President David Boaz wrote last year. “It has opened a Washington office and hired well-connected lobbyists. One of the country’s top executive search firms is looking for a political director for the company.

“What should concern us here is how the government lured Google into the political sector of the economy. For most of a decade the company went about its business, developing software, creating a search engine better than any of us could have dreamed, and innocently making money. Then, as its size and wealth drew the attention of competitors, antibusiness activists, and politicians, it was forced to start spending some of its money and brainpower fending off political attacks. It’s the same process Microsoft went through a few years earlier, when it faced the same sorts of attacks. Now Microsoft is part of the Washington establishment, with more than $9 million in lobbying expenditures last year.

“… And that’s what the parasite economy is costing America. The founders of Microsoft and Google and other innovative companies are going to waste their brains on protecting their companies rather than thinking up new products and new ways to deliver them.

“Google’s new presence in Washington is entirely understandable, but it is a tragic symbol of the diversion of America’s productive resources into the unproductive world of political predation and the struggle to resist it.”