Google Monopoly?
June 4th, 2009
So here’s an interesting bit of web news… a group called Consumer Watchdog sent the Justice Department a Google made presentation today. The presentation attempts to illustrate how they do NOT have a monopoly on search and online advertising. The Watchdog group sent two copies, one original, and one that had been marked up by an expert, disputing the claims that Google is not monopolistic.
The commenter apparently describes the original document as using a “Charm offensive” to try and combat the claims that Google has gotten too big, too intrusive and too powerful. I’m thinking that there is a fine line to tread here, as I am not sure it is needed to have the Justice Department involved in a large, successful company, just because it has been more successful than others. Who needs government sticking it’s ever increasingly large nose into everything, every industry?
Sure, Google’s profits have increased by about 6%, while Microsoft and Yahoo! are both down, and the share of advertising that Google sells is disproportionately large compared to Microsoft, Yahoo! and AOL, taking in about 65% of online revenue. And there is the case to be made that while Google holds everyone else’s feet to the fire on openness and privacy issues, apparently there was no mention made of privacy in the presentation from Google.
So what say you? Is Google so huge that we need the Justice Department keeping tabs on them? Do we really want government stepping in yet again, or do we take another tack, which would be somewhat difficult, as every SEO client in the world’s first question is “How do I increase my ranking in Google?”. Is it even possible to fight the Google giant?
For more information, and downloads of each side of the argument:
http://www.consumerwatchdog.org/resources/Googlepresentation.pdf
http://www.consumerwatchdog.org/resources/charmoffensive.pdf
June 6th, 2009 at 10:41 am
I find Google to be quite the fascinating animal. In the past I have tended to side on the anti-monopoly interventionist side of things but in this case I see no need for Government to get after Google. Where I see Google as different than say Microsoft is the nature of their advantage. Microsoft was able to build a very defensible position from which they could strangle competition by virtue of their customer’s high switching costs. I do not believe that these exist for Google.
Google has the best mainstream search technology (at least from my layman’s perspective). This is the source of their advantage. If they lose that position they will start to lose market share in ad revenue. Things on the web move too quickly for people not to latch onto a new search product if it produces markedly better results.
I do not think that Google is cutting off innovation. I think that they have learned from past tech giants that allowing open access to various products and allowing people to build on top of them actually improves rather than inhibits their competitive position. I certainly worry about Google and their effect on privacy but that can and should be controlled through legislation. There is no question that Google is dominant in online ads but it is hard to argue that they are damaging the market when their pricing is largely (again from what an outsider can see) based on an auction. They do not seem to even try to dissuade people from using other service people just flock to them because they are better.
Microsoft is often anti-competitive but the argument cannot be made for Google. If the Justice Department takes any sort of action against them it is just punishment for being better than everyone else. In the end I think that Google’s position in the world is actually somewhat tenuous. You hate to bet against them but I actually have my doubts about whether they are going to be around in 20 years. They have one great technology that makes money and if they lose the lead in that they are done.
I have been following Google for a while now and while I would tend to be on the left wing interventionist
June 11th, 2009 at 6:37 pm
I agree with you Will, we need to let the market determine this! It’s no place for the government to step in. The market has a choice to make, privacy or the conveniences that Google offers. Right now we seem to be choosing convenience. I suspect it won’t always be that way!