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Is Google really a small company like it insists? Or is it merely a company that dominates fairly? These questions will become important as the U.S. considers antitrust action against Google.  (Source: TechFreep)
Google insists it "does no evil" and isn't a monopoly

While Microsoft and Intel are often singled out for potential antitrust violations -- within the U.S. and internationally -- there's another equally dominant company that has thus far mostly escaped antitrust litigation: Google.  Estimated to own around 65 percent market share in the U.S. (similar to Internet Explorer's market share in the browser market), and as much as 70 to 80 percent of the international market, Google undoubtedly has the dominant position in the market.

The question is whether it is abusing that dominance.  According to allegations both from the government and private parties it has.  In the private legal realm, a major suit alleges Google used predatory pricing tactics to kill a business-to-business search engine.  On the government side outgoing Bush antitrust chief, Christine Varney, taken on by the Obama administration, says Google "has acquired a monopoly in internet online advertising."  She says the government has been too "lax" in enforcement, and hints that will soon change if she has her way.

Google is fighting back.  It has hired Dana Wagner, a former Department of Justice antitrust lawyer, who can help it craft a defense.  It has also become increasingly vocal through spokesman Adam Kovacevich.  The pair is trumpeting the company's "don't be evil" philosophy and charitable works.  They also are claiming that it only commands a 2.66 percent market share in the "total" market it competes in.

Google insists that the internet advertising market is not separate from the real world advertising market.  So it controls only 2.66 percent of all advertising, online and off.  Google believes in this respect it’s a small company just trying to get by.  States Ms. Wagner, "We need to move past intuitive market definitions and actually look at how consumers, advertisers and publishers are shifting their spending.  

The move argues Microsoft's 1990s insistence that it didn't have a monopoly. And internet advertising is a very different beast in theory and practice from offline advertising, with such concepts as targeted ads and traffic based revenue. Still, while Google's attempt to broaden the market it sits in may put some off, it still has a solid argument that it just is a very successful company trouncing the competition on the fair and level.

Lawyers point to U.S. v. Aluminum Co. of America 64 years ago, an important business victory, which saw the court ruling against the government and acknowledging that the company had "superior skill, foresight, and industry (to competitors)."

Perhaps because of this the government has yet to go after Google directly. It currently has several Google probes -- an investigation of Google's book scanning deal, a probe into whether Google CEO Eric Schmidt's relationship with Apple was improper, and a multi-company probe into tech corporations and hiring.  Gary Reback, an attorney for Carr & Ferrell, who helped the government find Microsoft guilty in the 1990s, however, warns Google to be careful what it does.  He states, "(The government) won't punish you for being successful. But if you're a monopolist and you spit on the sidewalk, (it will) break up your company."



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just as "Evil"
By Homerboy on 6/11/2009 9:30:59 AM , Rating: 5
as any other large, controlling company. Google is in business to make money, and no other reason. There's nothing wrong with that, but them trying to fool people is simply ridiculous.




RE: just as "Evil"
By LRonaldHubbs on 6/11/2009 10:24:51 AM , Rating: 5
Them trying to fool people is reasonable and expected. People falling for it is what is ridiculous.


RE: just as "Evil"
By AntiM on 6/11/2009 10:48:28 AM , Rating: 5
Yes, let's see Sergey Brin, co-founder of Google, worth 12 billion, ranked as the 26th richest person in the world. Larry Page, co-founder of Google, also worth about 12 billion, tied with his buddy as the 26th richest person in the world. Small company my a$$.
I don't see how they can be considered a monopoly though, they're definitely pushing the boundry, but I don't think they're quite there yet.


RE: just as "Evil"
By Oregonian2 on 6/11/2009 2:16:27 PM , Rating: 2
How does the richness of owners define the size of a company?

What's Google's revenue and how does that revenue number compare with others?

For 2008, Google's gross revenue is around 22-Billion.

http://finance.yahoo.com/q/is?s=GOOG&annual

Walmart is 400 Billion.

Apple Computers is about 32 Billion.

Microsoft is about 60 Billion

Google is #117 on the 2009 Fortune 1000 list.

http://money.cnn.com/magazines/fortune/fortune500/...

So using the "proper" way of judging company size, yes they're large (not humongous) even if they're only a tiny portion of their marketplace (they compete with all magazines, all newspapers, all broadcast TV networks, a lot of the cable channels, etc ... all for advertising revenue dollars).


RE: just as "Evil"
By Oregonian2 on 6/11/2009 6:13:48 PM , Rating: 3
Sorry I messed things up using actual numbers. Silly me.

P.S.- There are tiny startups owned by very wealthy people, having a company's owners be filthy rich does not mean a company is huge. But then, there I go again using logic.


RE: just as "Evil"
By True Strike on 6/11/2009 11:44:48 AM , Rating: 2
For quite a while I thought it was going to be Microsoft that would turn into the evil mega corp; with secret research facilities that would lead to the eventual zombification of humankind or some other such extinction.
Lately, I am not so sure. Not on the mega corp causing our zombification, that seems laughably obvious. That's why I have been training with I am just not sure on whether it will be Microsoft, or Google that's going to do it.


RE: just as "Evil"
By ChristopherO on 6/11/2009 1:02:37 PM , Rating: 3
quote:
with secret research facilities that would lead to the eventual zombification of humankind or some other such extinction.

No, that's Hulu.

I always knew Alec Baldwin was a little off... Maybe an evil alien would get a divorce from Kim Basinger but no sane man Alec's age would contemplate such a thing.


RE: just as "Evil"
By GodisanAtheist on 6/11/2009 2:21:41 PM , Rating: 5
If you're looking for zombification, you need look no further than Apple's fanboys...


RE: just as "Evil"
By Myg on 6/11/2009 8:35:01 PM , Rating: 2
Social Zombification:

http://video.google.com/videoplay?docid=8953172273...

(ironic aint it? -google video)


lol
By cochy on 6/11/2009 9:48:47 AM , Rating: 2
quote:
Google insists that the internet advertising market is not separate from the real world advertising market. So it controls only 2.66 percent of all advertising, online and off. Google believes in this respect it’s a small company just trying to get by.


For real? Wow that's a laugh. Just trying to get by...Oh if only my company were "just trying to get by to".

Better hire more lawyers cause that argument stinks.




RE: lol
By acase on 6/11/2009 9:51:18 AM , Rating: 2
Well...I don't agree with their "just trying to get by" but it seems like a lot of the offline advertising companies are starting to do a lot more online, so really it is all starting to mold together.


RE: lol
By omnicronx on 6/11/2009 10:59:10 AM , Rating: 3
I'm sorry but that defense does not work with any other industry, online and offline are two different entities in any other situation. I also don't think you realize the problem here if this were ever successfully used as a defense.

For example Apple could control 100% of the online music market and not be considered a monopoly, as store sales still account for a large portion of music sales. Or perhaps MS could use the defense that millions of mobile phones around the world have a browser on them which is not IE, lowering their market share considerably, as Java based browser is still a browser right? Even in this situation desktop browsers are considered a completely different entity, so I do not see why Google thinks they can somehow get around this.


RE: lol
By Vivi22 on 6/11/2009 1:26:27 PM , Rating: 2
"For example Apple could control 100% of the online music market and not be considered a monopoly, as store sales still account for a large portion of music sales."

Your analogy is flawed. Even if Apple had 100% of the online music market it's not like they could just go around abusing that position. Plenty of companies would be more than happy to come in and offer better prices to customers and better deals for artists and labels if that were the case. Piracy would also play a role in keeping them honest. The barriers to entry are low enough in the online world if you ask me, that any major software company could enter and stand a good chance at chipping away at the dominance of a company that abuses their position and rests on their laurels. It may be an uphill battle, but if companies thought they could do better you can bet they'd try.

Gaining market share from a company that's dominant because they just compete better is another matter. Apparently lawsuits and complaining to the government are often substituted for innovation in that case.


RE: lol
By omnicronx on 6/12/2009 12:50:05 AM , Rating: 2
I was just giving an example of a market that exists on and off the net, I was not implying it would ever happen.


RE: lol
By msomeoneelsez on 6/12/2009 2:32:18 AM , Rating: 2
quote:
Better hire more lawyers cause that argument stinks.


You would be surprised how good of an argument it is in the US court systems... Common sense aint so common anymore... Especially in the US government.


BWhahahhhahahhahhahh!!!!!!
By iFX on 6/11/2009 10:14:26 AM , Rating: 5
Thanks Google, I needed a laugh this morning. =D




RE: BWhahahhhahahhahhahh!!!!!!
By aegisofrime on 6/11/09, Rating: 0
RE: BWhahahhhahahhahhahh!!!!!!
By Cappadocious on 6/11/2009 1:16:26 PM , Rating: 2
Your support group is ----> that way


RE: BWhahahhhahahhahhahh!!!!!!
By MrPeabody on 6/11/2009 2:01:45 PM , Rating: 5
quote:
Your support group is ----> that way


Actually, I would expect this particular support group to be -> that way.


Hasbro?
By Kary on 6/11/2009 5:01:25 PM , Rating: 3
I thought Hasbro had the only true Monopoly.

That said...what has Google done that was bad for the market..offered better search results, cleaner interface, been faster, charged less to advertisers, supported outside projects if they used Google for the default search (Firefox),...

Now if Google was being sued for privacy concerns...Yeh, I can see that (and I'm not talking about taking pictures of public roadways..which I do not have a problem with)




RE: Hasbro?
By msomeoneelsez on 6/12/2009 2:37:22 AM , Rating: 2
People believe that Google is a monopoly because it is so good, therefor any other company has a huge barrier to entry just trying to compete with the success of their search engine, let alone their advertising.

I believe a similar argument was made against MS, in order for a new company to enter the market for an OS, there must be applications, and people willing to switch... both are dominated by MS. In this case, as already (poorly :D) stated, Google dominates online advertising (which is very different than print and tv ads, mind you...) as well as search, despite recent efforts by MS with Bing, and Yahoo with... well, attempting to stay alive I guess.

quote:
I thought Hasbro had the only true Monopoly.

No, their "monopoly" is a perfect competition (the exact opposite type, basically.) How many versions of "Monopoly" are out now? And they are all virtually the same...

I do appreciate the reference though :D


RE: Hasbro?
By MadMan007 on 6/12/2009 3:34:16 PM , Rating: 2
It's the advertising that's more likely to be looked in to than search.


Internet advertising
By crimson117 on 6/11/2009 10:58:34 AM , Rating: 2
quote:
And internet advertising is a very different beast in theory and practice from offline advertising, with such concepts as targeted ads and traffic based revenue.

Offline advertising is always targeted and traffic based:
- Supermarket coupons review your shopping list and print out coupons for competitors
- Television stations set their advertising rates by how many and what type of viewers each show attracts
- Magazines set rates based on circulation and subscription counts
- Print advertisers put their ads in magazines known to be read by the people they want as customers
- Billboard advertisers put ads up relevant to who will be driving by (commuters vs vacationers vs sports fans, etc)

Google just does this on the internet, and with much more variety and specificity: each user gets unique ads based on their search results, or the content of their email, or the content of the web page they're viewing. It's nothing really new, it's just a great evolution of traditional targeted ads into more focused targeted marketing.




Right...
By killerroach on 6/11/2009 1:48:13 PM , Rating: 2
Google is a "small company" in the same sense that Mama Cass was a "small woman".

That being said, so far they still seem to lack the overall market dominance that would be necessary to confer "monopoly" status on them. They're large, they're multi-faceted, but they seem to not really be able to dictate the rules of the game in any of the games they play.




Attacks on Google (and Microsoft)
By MarcoP123 on 6/11/2009 2:44:15 PM , Rating: 2
It's amazing how many people remain so filled with emotion over big, successful companies. "Google is a bully and deserves to be taken apart." "Microsoft is a bully and deserves to be taken apart." Etc. Both have achieved their ranks because they have consistently provided great tools and solutions to the rest of us. For more: http://domusinc.blogspot.com/2009/06/attacks-on-go...




Fail Argument
By EricMartello on 6/11/2009 7:06:10 PM , Rating: 2
Google is saying it is small because they only have a 2.66% share of the TOTAL advertising industry covering all types of media...but to put that in perspective, it would be like Microsoft saying it is small because it primarily makes operating systems and its "overall" share of the software development market is whatever...like 5%.

As an advertiser, I do not like Google at all. They pretty much OWN the internet, and the internet is the most compelling communications platform we currently have. I'd say that qualifies it as a monopoly, and it certainly does use biased and questionable tactics for how it distributes traffic to websites.

The AdWords system relies on some wonky "quality score" algorithms which try to guess the relevance/quality of the site being advertised...often this is just a bludgeon that is used to force advertisers to pay higher minimum bids. Google never actually discloses what specific criteria it uses to evaluate a site - it's telling you to play a game without even letting you know the rules.

Google makes a lot of free apps, which seems nice on the surface, but in reality what Google is doing is further solidifying its grasp on internet traffic via cloud apps. I'm not a big fan of cloud apps myself, but there are no doubt going to be a larger part of the web in the near future. Smart business? Yes...but once a company gets so big and dominant, competing with it becomes nearly impossible (even Microsoft and Yahoo couldn't pull it off)...and the whole point of breaking up big companies is to more-less level the playing field. No single website should have such a large influence on the internet WITHOUT having to adhere to some independently drafted standards.




Ok then.
By Innocent Hawk on 6/11/2009 9:30:40 AM , Rating: 1
Google isn't a small company, but it also isn't a monopoly.

Or at least not yet.




"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il














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