Google explains: We're not a monopoly, not by a long shot

Company's top lawyers say rivals are largely responsible for the static, suggest that the old measurements regarding monopoly don't apply to very New Economy phenom.

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 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.

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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."

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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."

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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.

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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 .

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About the author

Charles Cooper was an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet.

 

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