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Google founders Larry Page and Sergey Brin  (Source: a beautiful gift/WordPress)
Odds of Google being split up are very slim

Google is an American company that started as a simple search engine and grew to a massive corporation with tentacles reaching all across the technology arena into other unrelated fields. The size of the company and money generated by Google and its advertising programs today make it a clear target for watchdog groups that maintain Google is a monopoly.

One watchdog group called Consumer Watchdog has asked the DOJ this week to break Google into smaller companies to prevent a monopoly situation along the lines of Microsoft. John M. Simpson from Consumer Watchdog is the person who made the request to the DOJ and he argues that the DOJ's actions against Google's attempts at buying other advertising firms and scanning books isn't enough to ensure the search giant doesn't turn into a monopoly.

Simpson wrote in a letter to the DOJ, "Google exerts monopoly power over Internet searches, controlling 70 percent of the U.S. market. For most Americans – indeed, for most people in the world – Google is the gateway to the Internet. How it tweaks its proprietary search algorithms can ensure a business's success or doom it to failure."

The fact that search rankings on Google can make or break a company is no theory. Each time Google algorithms change retailers around the world moan over last rankings. Once a retailer is off the first page of results the chances of searchers clicking becomes much smaller.

EWeek rightfully points out that the major flaw with Simpson's argument is that Google doesn't force anyone to use its services; it just happens to be the most popular service around. Google also lets users leave anytime they want and take their data with them when they go. Another factor that hurts Simpson's idea of a split up Google is the fact the DOJ didn’t split up Microsoft when asked by advocates, and Microsoft has been convicted of anti-competitive practices in the past. Google has so far never been formally accused of anti-competitive practices, though some major companies like AT&T have accused Google of being anti-competitive.

Simpson also alleges that Google purposefully tweaks its algorithms to keep other businesses down and serve its own interests. Google has long maintained that algorithm changes are nothing more than an attempt to give users more accurate and useful search results.

Simpson outlined his plans for breaking Google up in the letter sent to the DOJ, "Gmail and its new social networking service, Buzz, could be spun off as a separate entity as could YouTube, a Google acquisition that we believe should have been denied at the time of merger. Enterprise applications could be another separate business."

A Google spokesperson told 
eWeek, "We totally understand that with size and success comes scrutiny. Although given their track record, even if we broke Google in half tomorrow, Consumer Watchdog would probably insist that we split halves into quarters."

Google is a huge company, but if the company was broken up as suggested by Simpson many of the services simply don’t generate the revenue needed to continue operating. Google's massively successful advertising program underwrites most of the free services like Gmail and Buzz.

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Everyone above is missing the point
By xImtc on 4/22/2010 12:35:00 PM , Rating: 2
Google's monopoly has little to do with users. It is exactly that you never pay anything to Google that there is a problem. You are not Google's customer. Therefor, this action is not to protect you. The argument that Google is a monopoly comes solely from the market power it exerts over its customers, which are advertisers. Google commands something like >90% of all Internet advertising profits. They use the money they get from those profits to develop new technologies which they give away for free. That sounds like a good thing, and in a lot of ways it really is, but there is a hazard there. Remember that Microsoft's Windows monopoly was never directly challenged. It has been a wonderful boon to computing, in many ways, that Windows is everywhere (not that it isn't a source of serious problems in many others). Microsoft was found to be guilty of predatory practices by extending its Windows monopoly to Web browsers. That is, they made it difficult to compete in a growing space (the fledgling Web) because they gave away a product for free along with Windows: namely IE. They did this with Windows Media player, as well. What that did -- successfully -- is stop Netscape's dream of becoming a "platform" for more than a decade. There would have been other, much earlier Googles long before now had Microsoft not stopped Netscape square in its tracks. But because Netscape could no longer monetize its product, it withered. And Microsoft's core product, Office, thrived and made them money -- money they never made on the Internet (have they made a dime on IE?).

Now, imagine you are a mapping company, or an email company, or an online Office competitor company, and you want to develop your product. You have two ways of making money. First, you can charge users; but wait, no you can't because Google's offer, even if no better than yours, is free, and you can't beat free. The other choice, you can put ads on your Web page; but wait, you can't get much money from your adds, either, because Google is the ad king! Maybe you should use Adsense (heh)!?!

And therein lies the rub. It is nice to get free things as a user. But they are propriety and discouraging innovation. The reason Google is out in front on so many Web services, is that no one has the revenue stream to go after them. The main reason Android is so successful, for example, despite being pretty mediocre (admit it, you know it is!), is that it is less than free. Vendors are paid to sell phones running it. How can anyone compete with less than free? And, since there is no competing platform, there is no other compelling place on the Web to advertise. And as long as that remains true, the vicious cycle continues.

Thus, Google a dangerous monopoly. I don't think we are at a stage where it should be broken up, but, like Microsoft before, it should have serious restrictions placed on how it can compete.

By grognard on 4/22/2010 1:34:44 PM , Rating: 2
And while your argument is convincing, it is based on a pile of underlying assumptions symptomatic of a society built on a strong sense of unmerited entitlement. Not your fault, xImtc, so no offense intended. This is simply the kool-aid that is being served nowadays...

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