InsideGoogle

Has Google Crossed The Line? Microsoft, Yahoo, AT&T Say Yes

As I just posted on the InsideMicrosoft blog, Microsoft has issued a statement suggesting the government get involved regarding Google’s purchase off DoubleClick, and be concerned that Google is building a competition-averse monopoly. As reported at Paid Content, Yahoo and AT&T are also raising concerns (all tried to buy DoubleClick and were vastly outbid by Google), especially about the fact that combined, Google and DoubleClick will own 80% of publisher advertising services.

I’ve already written a lot at InsideMicrosoft, and it isn’t remotely pro-Google. I believe Google is on a bad path (and if you’ve been paying attention, I’ve been saying this for two years), becoming the next Microsoft, if not worse. Google is an arrogant company, always has been, and seems almost determined to do nothing to protect its image and appear as anything but. With this purchase, Google has officially shoved major corporations out of the way in an effort to gain market share and prevent other companies from competing, and that is a huge mistake.

The one thing, short term, that is going to hurt Google the most, is that it vastly overpaid for DoubleClick. Double-Click was made private less than two years ago for $1.1 billion, two divisions were sold off for $540 million, and what was left was being shopped around for $2 billion. Google threw in an extra billion dollars to beat back the competition, and when solid business gets traded away for aggressive market grabbing, the government is none too happy.

What was supposed to be a multi-party negotiation/bidding war ended abruptly because Google is swimming in cash and wants to win at all costs. In the 1990s, Microsoft was the same way, aggressive, rich and powerful, but even it didn’t have the arrogance of Google. Google got this way far faster than Microsoft did, and it could be heading towards and even more severe endgame.

I’d like to believe Google is better than this. I’d like to believe that Brin and Page are two young, idealistic guys who just want to build a better algorithm and a great, happy company. I’d like to believe Google wants to learn from the mistakes of Microsoft’s past, knowing that no monopoly can escape government intervention, particularly when your competitors are every major media-related corporation in the country (Viacom, News Corp., GE, Microsoft, Time Warner, Yahoo, Disney) and can bring down a publicity nightmare machine that will tear you to shreds within months.

What’s Google’s plan? What has Google done to prove it is interested in innovating, not resting on its laurels, not throwing money at the wall, not choking off competition? Google has taken zero risks in its search engine in many years. Google built Gmail on the idea of outspending the competition in storage space. Google Search has not seen a version 2.0, ever, in the history of the company, and the reason is because it would likely risk Google’s market share and divert too many resources from other projects.

Microsoft Windows is a monopoly. It moves slowly, takes few risks, is enormously expensive, new features are hard to come by, and it is by all accounts an albatross. Microsoft works its ass off to improve Windows, and yet it falls behind Mac OS in so many ways. Yet, in the nine years since Google Search hit the internet, Microsoft has shipped five versions of Windows, and no one can argue that things haven’t changed considerably more between Windows 98 and Windows Vista.

What’s different between Google Search 1998 and Google Search 2007? Is relevancy a lot better? I remember being damn satisfied with Google’s results in 1999, when I first started using it, and I can’t say it’s revolutionized itself since. So, Google’s been dealing with spam, adding spell checking, side services, tie-ins, changing the interface colors once, tweaking and tweaking.

Am I saying there’s something wrong with Google Search? Hell no, it’s great! My point is that Google will never revolutionize its search engine until it has to, and as long as its market share is as big as it is, and growing, Google Search will continue to look the same, act the same, and be the same. Without competition, there is no incentive, and that is the arguement antitrust regulators are going to make.

I don’t want to be writing about the Google antitrust hearings. I don’t want that story to ever happen. I don’t want Google to screw up the great company they’ve built. But as long as they continue down this path, dropping billions of dollars on market share, squeezing out competitors, buying their way into your PC (don’t forget the billion dollar Dell deal) and overall killing competition, I can’t say it won’t happen. Microsoft paid a huge price for its actions in the 1990s, and there’s no reason to belive Google won’t pay the same.

April 16th, 2007 Posted by Nathan Weinberg | Controversy, Yahoo, Microsoft, Search, General | 5 comments