Digicel holds Google, Facebook ads hostage

If Google and Facebook are really so keen on connecting the developing world to the Internet, then they should share their mobile revenues with the operators doing the actual connecting – at least that’s the stance of Denis O’Brien, the Irish billionaire who owns Digicel. Since Google and Facebook don’t appear to be taking his suggestion seriously, O’Brien is getting their attention in an unusual way: He’s blocking their ads across Digicel’s Caribbean and South Pacific networks.

Denis O'Brien (Photo credit: Digicel)

Denis O’Brien (Photo credit: Digicel)

Digicel announced this week it would use network software from Israeli startup Shine to block browser and in-app advertisements served up by ad-networks like Google, Facebook and Yahoo. The operator group is starting with Digicel Jamaica, but it plans to institute the ban on networks in other countries in the coming months. If Silicon Valley’s Internet giants want their ads back, O’Brien said, they’ll have to pay for them in the form of revenue sharing deals. Here’s O’Brien’s official statement:

Companies like Google, Yahoo and Facebook talk a great game and take a lot of credit when it comes to pushing the idea of broadband for all – but they put no money in. Instead they unashamedly trade off the efforts and investments of network operators like Digicel to make money for themselves. That’s unacceptable, and we as a network operator, are taking a stand against them to force them to put their hands in their pockets and play a real role in improving the opportunities for economic empowerment for the global population.

O’Brien is coming off like the champion of the common man, pointing to all of the bandwidth ads siphon off of customers’ data plans. But Digicel stands to gain the most if Google and Facebook give in. Basically they’ll be paying to play on Digicel’s network, which could have all kinds of implications for operators around the world and net neutrality in general. There’s also no guarantee that Digicel would use that revenue sharing windfall to expand the reach of the mobile Internet, either by building more networks or lowering mobile data pricing.

But if O’Brien comes off as self-serving, so do Google and Facebook. For some time, Facebook and Google have been decrying the lack of basic internet access to vast populations of people around the world. The result has been initiatives like Internet.org and Project Loon, ambitious and sometimes far-fetched plans to provide cheap internet access using wireless technology. Though Google and Facebook position these plans as altruistic, they stand to benefit plenty. The more people who have Internet access, the more people can use their services or see their ads.

Regardless of which side you fall on – if any – this is going to be a fascinating fight to watch. O’Brien isn’t just putting the screws to the ad-tech community, but the content companies that depend on the revenue their ads generate. And if Google and Facebook capitulate, you can bet Digicel will be joined by plenty of other operators looking for their own revenue sharing agreements.

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