A few months ago ComScore, a company measuring Internet usage and traffic, came out saying that Google was losing on-line market share to rivals. Given ComScore is a reputable source for Internet traffic data, their findings resulted in a significant fall for Google Stock. Google executives came out crying foul that the way ComScore calculated usage is flawed and that their numbers are not accurate.

Well, today Google (GOOG) has come out and confirmed a new Ad Planner service (based on its Trends for Website service) that would compete directly with ComScore's service measuring Internet usage. Google's service would measure Internet traffic using data taken directly from Web servers, as opposed to ComScore's service which measures Internet traffic based on information gathered from pools of Internet users. By going directly to the source, Google's service would arguably be much more accurate. The street agreed and ComScore stock lost almost a quarter of its value after the news as their main source of revenue (they charge a subscription fee for their Internet usage data) could be lost to Google's potentially free service.

Given how closely Google guards its search and advertising algorithms, a lot of people will also raise questions around the usage/traffic data - especially if it shows their market reach growing and allows them to charge higher ad rates. Roger Baron, director of media research at the advertising agency Draftfcb, said he was concerned about where Google's demographic data was coming from but was attracted by the price. "That's the bold thing, that it's free," Mr. Baron said. "I think a lot of people will be taking a look at it."

Even though I am a Google share holder and use their Adsense service on this blog, I do believe in open competition and transparency of information. Google's new service is clearly aimed at bolstering its ad-sales business, in which it is already the largest and most dominant player. It is also a potential conflict of interest for advertisers who are using data from Google to make advertising decisions through Google's own advertising channels. "For an advertiser, the last thing you want to do is to have your adviser be the same person you are spending your money with," says Sarah Fay, chief executive of Aegis North America, an advertising company.

While I agree that Google's algorithmic server based approach to measuring usage statistics is going to be more accurate, I think it shows another example of Google's changing corporate attitude and how it can crush potential competitors (aka Microsoft in the 80's and 90s') that threaten or question it's on-line dominance. They have so much money that the can offer this service for free making it hard to resist for advertisers.

So for future competitors to Google, beware their wrath. Revenge is a dish best served cold and ComScore future is the main course.

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