Sponsored Search Auctions: Simple Economics and Implications for Antitrust Policy

The most valuable asset of many two-sided platforms is their user base. In a celebrated example, Internet search engines (such as Google, Yahoo! or Bing) derive most of their revenue from selling the eyeballs of millions of searchers to advertisers. For each query entered by searchers, search engines return a list of sponsored links displayed to the right of the algorithmic (also called organic) search results. The knowledge of what searchers are looking for enables s