Google explains: We're not a monopoly, not by a long shot
Barring some unlikely bolt of inspiration at Microsoft, Google should continue to pad its already formidable lead in search advertising. And now that Google CEO Eric Schmidt says the company intends to turn its attention to display ads, who of sane mind would bet against its chances?
We're still quite a way from the point where regulators conclude that Google is too big for its britches, but just for fun, I typed the question, "Is Google a monopoly?" into my search engine. (Wanna guess which search engine I use?) My query brought back 461,000 responses. Clearly, people have debated this question for quite some time, even as the company continues to grow ever larger.
But Google obviously doesn't agree that size and market dominance pose even remote antitrust parallels with IBM in the 1960s or Microsoft in the 1990s. The chief reason: the markets in question are very different. Earlier Friday, Google's general counsel, Kent Walker, and Dana Wagner, the U.S. competition counsel, got on the phone to explain why.
Kent Walker, VP and General Counsel
(Credit: Google)"The nature of the Internet is just a fundamentally different world from the sale of packaged software or the bundling of software with OEMs (original equipment manufacturers)," said Walker, "The standard line we have is that competition is just one click away,"
Walker offered what he called both a "structural" answer as well as the "behavioral" answer.
I agreed with much of his argument. The parallels with Microsoft are off. In Microsoft's case, the company got into trouble because it used its desktop monopoly to force companies to adopt Internet Explorer. Still, is there not a point --call it 70 percent market share or 90 percent market share, or somewhere in between--where Google opens itself to the title of monopolist, even if it got there by virtue of building a better mousetrap? Wagner took a crack at that question, countering that the magic number fascination "was a little bit of a red herring."
Google does acknowledge its role as a "disruptive company," but Walker suggests that the real battle is between desktop-based computing, including operating systems and productivity applications, and cloud-based computing. To the degree the latter trend emerges, he said, that spells trouble for Microsoft. "In a sense that's the real market, if you will," he said. "It's how do people use technology to do what they need to do. That can be search to find things more broadly on the Internet. But more broadly, it's to use the Internet, to use the network to share information to create new goods, tools and services."
But will advertisers see their rates go up as a result of the Yahoo-Google search deal? There have been reports suggesting as much. And of course, one of the filters regulators use for antitrust review is to what extent it hurts customers, or, in this case, advertisers. Not surprisingly, Wagner argues that advertisers' costs will head in the opposite direction.
Since antitrust decisions get decided in Washington, it's not surprising, then, to learn that lobbyists for Google and its rivals are shadowing each other in the corridors of power. Google's Walker suggests that most of the noise around competition issues is being generated by competitors like Microsoft--but also the cable and phone companies who don't like Google's position regarding Net neutrality.
Charles Cooper has covered technology and business for more than 25 years. Before joining CNET News, he worked at the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.
9knowing for sure Yahoo wouldn?t dare undercut them, because yahoo would be making up to $800 million a year from Google). Consumers are just going to suffer
This has nothing to do with search and everything to do with advertising. Yahoo will continue to provide their own search results, and place googles ads where they have none or their ads are more relevant. Look, if someone can build a better search engine than go for it. If it really is better, they will build a large audience and they can charge more for their ad inventory. Simple. Problem is that nobody has been able to do it. At least as far as I am concerned. Can they charge more per click than others? Sure. But they also possess the ability to better match searches with ads, hence cutting down on clicks that dont pan out for advertisers. Obviously it is worth it to advertisers.
1) Google controls the ad space
2) Google can "out monetize" any "internet service" by using their superior ad inventory
3) "internet service" does not include retail/commerce product-related sites
4) Google can therefore out-compete any up and coming web service
5) The money Google makes from the ads goes back into improving the service
6) The ads strengthen their other services, and the services strengthen their ads
7) The more services that display their ads, the more advertisers they get, and the more they can monetize services
8) Their strength grows unbounded in a feedback loop
9) The monopoly of the network is quite different and arguably superior to monopolies of lore, notably desktop/software monopolies
Examples:
Take the search space. Their ad dominance gives the funds to improve their search relevance, which grows in popularity and thus feedback into the ads.
Now they are seeking to beat wikipedia using knol, and their ad market dominance.
In my opinion, and I am no expert, this is potentially a monopoly like no other monopoly.
Google gets the users primarily because it is a verb. If Microsoft comes up with a verb for their search then their fortunes will change.
Netscape, Borland, Lotus, Wordperfect, Novell, on and on...companies who have been stomped on and vanquished by Microsoft...now Google is in their cross hairs....I guess they BOUGHT all you guys too.
and, yes, they do have a better mousetrap, inarguably, but it is very difficult for anyone to compete against them because of the amount of cash their ad monopoly generates, because a lot of that cash goes back into making the mousetrap better and better.
it is not clear if they are all about branding. they continue to for-the-most-part dominate in the three primary search engine metrics, and have never been definitively unseated in any one, much less all 3 (although yahoo's index is slightly larger, some argue it has less quality pages)
It will be a matter of years before they get their rears handed to them as microsoft did.
IMHO Google is becausing the Microsoft 2.0.
1) the ad group. the ads should be made equally available to all companies, so everyone can monetize their web services at the same rate. this will help level the landscape.
2) the search group. their search is already very powerful, and, like ads, can also significantly enhance the value of other web services. so it should be carved out.
3) all the other services. news. maps. groups. orkut. etc.
i can make up my own definition of why an automobile is actually a plane, but it wont really jive with what the true definition of what an automobile is. So your reasonoing of why google is a monopoly is moot.
They dominate the market and there is an extremely high barrier to entry for any new comer.
They are using their dominate position to expend in to other areas further increasing the barriers to entry and to capture and contain their market share. This action itself is not illegal until you are deemed a monopoly.
The only question remains... "Does absolute power corrupt absolutely?" By this I mean that Google used to have as its mantra that "we're not that guy" referring to Bill Gates and his megalomaniac monopoly fight. (Unlike IBM which rolled over, Microsoft fought in court where the legal expense was less than what it was making, so they could continue to fight and remain a monopoly.
So has power corrupted Google?
In the mapping industry, there's the google cars doing their own street views and mapping of the world. Are they going to put Teleatlas and Navteq out of business? (Both now owned by TomTom and Nokia respectively)
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by akalaniz
November 26, 2008 11:06 PM PST
- My day job is at Los Alamos National Laboratory. Like Google, I'd like to help make the world a better place, so I coupled a very powerful data correlation/prediction engine I built before coming to LANL to an Excel/VBA macro which scrapes Google Search volume from a (or your) dictionary, as well as an Excel/VBA macro for scraping pairs of phrases to compare relative volume. (Download Excel files at http://precisiondatamining.net/ ) I then have "the" Fortran 90 engine find all significant correlations in the Google Search volume data (plus weather data, financial data, etc.) and generate predictive models for future Google Search volume for a given search phrase, or for energy demand, etc..
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Reply to this comment
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(19 Comments)At http://precisiondatamining.net/ you will finds lots of links to Word dcouments about applications of the technology to SEO (search engine optimization), Energy Demand Forecasting, Threat Reduction Alarming, Genomics and Proteomics for advancing the pace of development of individual molecular medicine.
If you have a worthy cause, and you can prove yourself legitimate, I would consider either giving you the Fortran 90 executable, or running it for you and sending you its manifold kinds of correlation and prediction dumps, including multivariate models in multiple function bases.
CHECK THIS OUT FOR YOURSELF----What Geico should know:
(Who would have thought that "writing resume" or "cheap car insurance" mimicked each other? Maybe Geico would like to know. http://www.google.com/insights/search/#q=writing%20resume%2Ccheap%20car%20insurance&cmpt=q) I'm interested in threat reduction applications, energy efficiency, etc. Go out and use the data for your internal purposes--be better, do better, run better, understand better.
The Excel Macros run in C:\0_Main (you can change the macro)
Two files are produced:
inDeck.txt The weekly Google Search Volume data. Import it with Excel and graph it, or whatever. Use the delimeted, and space options when importing a text file.
inHead.txt, a header for the F90 executable telling it how many data streams were captured, and how many weeks of the Google Insights file are to be used starting from 4 Jan. 2004--currently 256 weeks.
Example: GoogleInsights.xls Dictionary Worksheet explained:
There are 17 phrases to try to scrape from Google Insights--some may have zero or insufficient data. There are 256 weeks worth of data--but since I write to Excel 2003 in rows, you can only pull either the first 255, or 2 thru 256 weeks. (You could modify the macro to write to colums for Excel 2003 or older) Excel 2007 doesn't have this problem. 5 is for the F90 code, telling it to use a 2^5=32 week sliding window while looking for correlation. Warning: The most stable platform seems to be XP with Excel 2007. Excel 2003 doesn't really close files when told to do so by VBA, and hence, the macros will eventually crash. Not so for Excel 2007.
17 255 5
nuclear
great satan
israel
hezbollah
uranium
plutonium
scientology
atomic weapons
nuclear weapons
bombs
anfo
atom bombs
anarchist cookbook
pipe bombs
suicide bomber
iran
iraq
By viewing this simple macro you can see how to modify it as Google Insights puts out more weeks.
By viewing the pairs macro, you can tinker to try all the way up to 5 search phrases, the Google Insights limit.
If you want, I can even show you how to modify the macros to scrape only one particular country.
Dr. Alex Alaniz, Ph.D.
If you have a worthy cause, I would consider either giving you the Fortran 90 executable, or running it for you and sending you its manifold kinds of correlation and prediction dumps, including multivariate models in multiple function bases.