It may be a measure of Google's dominance that some of the most important events for the company next year will likely take place in courtrooms and government offices.
The Web giant is under investigation both domesticallyand abroadfor allegedly abusing its powerful position as the leader in Internet search. And rivals are suing Google and its partners as the company expands into markets where they're already competing.
So even as Google works to improve its search engine and bolster emerging businesses such as its Google+ social network, it will be worth keeping tabs on the regulators, lawmakers, and judges who will play a significant role in the company's business going forward.
Here are five things to look for in 2012:
1. Antitrust decisions in the U.S. and EU
Regulators both in the United States and abroad are closing in on Google. The Federal Trade Commission began a "formal review" of Google's strategies for building its search business, as well as the tactics it's used to bake search into its Android mobile operating system. The European Commission is investigating whether Google has unfairly manipulated search results by lowering the rankings of competing services and elevating its own offerings in unpaid results. And the Korean Fair Trade Commission is gathering information about Google allegedly limiting access to rival search engines on its Android mobile operating system
Those inquiries may well come to a head in 2012. It seems likely that U.S. trustbusters will want to resolve the matter before the presidential election, in part because the possibility of a new administration could lead to a different approach with regard to applying antitrust law to search.
European regulators have been looking into Google's tactics for more than a year now. That investigation is said to be approaching a ruling. The European Commission is also reviewing Google's pending bid to acquire Motorola Mobility, and regulators there recently suspended that review until Google produces additional documents that the agency said are essential to its evaluation.
The challenge for regulators, if they determine that Google has acted unlawfully, is coming up with an appropriate solution. They could make it more difficult for Google to acquire companies. The bigger fear for Google, if it gets slapped, is a remedy that restricts its conduct regarding search. That may well mean some sort of regulatory structure over the way Google generates search results.
2. Google steps up patent defenses
Google continues to be embroiled in patent litigation. Oracle has sued Google, while Microsoft and Apple have either sued or threatened to sue companies that make devices that run Google's Android and Chrome operating systems. Google has largely struggled to combat the challenges, leading the company's chief legal officer, David Drummond, to blog about "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents."
Whether Android infringes on patents will ultimately be decided by the courts. But the biggest challenge for Google is that it's put itself in the vulnerable position of having a relatively tiny patent portfolio with which to defend itself. That's because, in intellectually property litigation, a company with a patent threatens to sue, or actually sues, another company that it believes has infringed on its innovation. The common defense is for the accused company to find one of its own patents that the accusing company has infringed upon and threaten a countersuit. That gives it the ammunition to propose cross-licensing deals that keep both companies out of court.
Google's thin patent portfolio has made it a bigger target. That's one key reason, Google Chief Executive Larry Page said, why the Web giant is purchasing Motorola Mobility. Sure, the company is a key Android customer. But it's also a huge holder of mobile-device patents, something that should help Google protect itself against future litigation. Google will likely continue to acquire patents in the new year to bolster its defenses.
3. Making search more social
Bradley Horowitz, one of the top Google+ executives, recently said, "We've shipped the 'Plus,' now we're beginning to ship the 'Google.'" His point is that simply creating the social network wasn't the goal. The company is busily weaving other Google properties and technologies--such as YouTube, videoconferencing, and integration with the Android mobile operating system--through it.
But watch for Google to use the knowledge it gleans from those on the social network to make search more relevant. The more Google learns about users, through the comments or companies that they click on the "+1" tab, the smarter Google search results can be for those users. There's a good chance that users will want to read news articles, for example, that their Google+ connections have liked. The more Google+ learns about users, the more it can translate that information into more relevant search results.
Ultimately, Google is aiming to do more than provide Web surfers with links. It wants to answer their questions. Right now, it can predict what queries users are after before they finish typing the words. It can provide weather forecasts and answers to mathematical equations rather than simply issuing links. Going forward, Google wants to anticipate searchers' needs without them having to explicitly ask each and every time. Google+ will help give them more tools to do so.
4. Further Android fragmentation
Google's mobile-phone fortunes have soared on the back of its Android mobile operating system. Since launch in 2007, Android has leapfrogged Research In Motion's BlackBerry and Apple's iOS to become the most widely used smartphone operating system. But with several device makers creating Android phones and tablets, and even tweaking the operating system to fit their needs, the user experience often varies from device to device.
Take the slick Motorola Droid Razr, a trim, snappy phone that runs Android 2.3, dubbed Gingerbread. Shortly after it debuted, Google released Android 4.0, known as Ice Cream Sandwich, and Samsung released the Galaxy Nexus, running the latest version. The Droid Razr? It's still on Gingerbread. Eventually, it will get Ice Cream Sandwich. But it's unclear when.
Fragmentation isn't a problem until one version of an Android device can't run the latest operating system, or a cool new application designed for it. Google acknowledged the challenge at its I/O conference in the spring, saying it would work with manufacturers and wireless carriers to develop guidelines to help get updates to devices more quickly. But it's not really clear that Google will take the issue seriously because the Android market continues to grow.
5. Chrome market share climbs
A little kerfuffle emerged earlier this month when Web research firm StatCounter noted that Google's Chrome 15 was more widely used in the last week of November than Microsoft's Internet Explorer 8. The tumult, of course, is caused by the fact that Internet Explorer has long been the browser leader. And when you add up all the versions of IE in use, it's far and away the top browser worldwide.
But there's little doubt that Chrome share is on the rise. And that's crucial for Google because the browser gives the company the ability to push the Web standards it favors as they emerge. What's more, Google seems to be moving beyond the notion, floated when Chrome launched in 2008, that its browser was primarily about enabling people to see Web pages faster.
These days, Google is encouraging developers to create Web apps for Chrome that users can get through the Chrome Web store. Already, users can add Angry Birds, a scoreboard from Major League Baseball, and Rdio's music streaming service. As Chrome grows, expect that business to follow.