The truth is, when it comes to revenue, Google is a one trick pony. Online advertising is it. (Google captures 70 percent share of search ad revenue and about 30 percent all online advertising.) For all the cool projects coming out of Google Labs, none makes money.
Google makes it easy for customers to switch to competitor’s products and, unlike other technology giants in years past, the company has not been accused of anti competitive tactics.
I was for antitrust actions before I was against it. I liked the idea of breaking up Microsoft. I wouldn’t today. And I wonder what will come of the Senate hearing into Google’s market dominance.
Erick Schonfeld makes this excellent analogy:
As I watched the Google antitrust hearings last Wednesday, with its gotcha moments and Senators pontificating about the dangers Google poses to society, it struck me that what I was watching was theater. And not just any theater, but monopoly theater. I am borrowing from the concept of security theater: “a term that describes security countermeasures intended to provide the feeling of improved security while doing little or nothing to actually improve security.” In the same way, talking about Google’s monopoly power and what the government should do about it provides the feeling of improving competition while doing little or nothing to actually improve it…
Even if Google is abusing its monopoly powers, then what? Any remedies imposed on Google could be worse for consumers than the uncertain consequences of keeping Google unchecked. If Google had to pass every change to its search engine through an antitrust filter that could really screw up search, something which most of us depend on every single day.
The Senators seemed aware of this possibility, asking repeatedly what Google itself would propose for a remedy if an antitrust court ruled against it. Senator Al Franken suggested the possibility of a voluntary technical committee to provide oversight, to which Google’s outside lawyer Susan Creighton responded (quite correctly): “Google already changes its algorithm 500 times a year. I think a technical committee would be too slow to keep up with changes in the market.”
The hearing was monopoly theater. It was also farcical at times. The Senators kept trying to define Google and search in 2004 terms of ten blue links that take consumers away from Google. But search is very different today. Increasingly, Google is trying to give you the right answer in the results themselves. And you know who else does exactly the same thing? Bing. Telling Google that it needs to go back to the 2004 version of itself while Bing and others can keep experimenting with new ways to deliver information to consumers would just hamper innovation in search.
The government and antitrust lawyers can only look backwards. Technology changes so fast that any remedies they impose would be the wrong ones. Look at what happened to Microsoft. It’s monopoly power was eroded by the Internet and Google and (more recently) mobile computing, all unforeseen forces during its own antitrust trials in the 1990s. The same will be true for Google. Search could be displaced by social as the primary way people discover information on the Internet, or maybe some entirely new technology will take hold that nobody is even talking about yet. Monopolies on the Internet simply aren’t as enduring as they used to be.
Similar opinions from Mike Masnick at TechDirt and Matthew Ingram at GigaOm.