Google banked billions from secret algo price tweak - MIT

An MIT professor tells the antitrust trial that Google was not transparent about changes that raised ad prices for customers

Customers were charged more in ad auctions due to a secret Google project that drove billions in new revenue to the search giant, the antitrust trial has heard.

An MIT economist said Google changed internal formulas used to set prices in a project called Momiji.

Momiji are Japanese dolls with a secret compartment to store sins or misfortunes so they can be cast away later in rivers or the sea.

Michael Whinston, a professor of economics at the Massachusetts Institute of Technology, said the shift sought “to raise the prices against the highest bidder”.

Bloomberg reported:

Google’s advertising auctions require the winner to pay only a penny more than the runner-up. In 2016, the company discovered that the runner-up had often bid only 80% of the winner’s offer.

To help eliminate that 20% between the runner-up and what the winner was willing to pay, Google gave the second-place bidder a built-in handicap to make their off…