What is Google up to?
In the technology world, Google is mostly seen as a good guy. Of course, its development of the working search was a critical contributor as was Apple with the personal computer and Microsoft with PC software. In none of the cases did any of those companies invent their key products; they just made them useful and lasting.
Google has spread its efforts in a broad range of efforts: Android, Google Glass, Wi-Fi blimps, community internet fiber service, self-driving cars. and who knows what else. The problem is these lines don’t make money and mostly, perhaps all, never will. Even Android, the world’s largest supplier of smartphone software, whose popularity and unprofitability share Google’s decision to give it away. All of these efforts generate lots of support for Goggle among techies.
Search matters. But the thing that really matters is search and its related efforts such as mapping. That’s where most of the revenue and all of the profit comes from. It is an area where Google is not restricted to colorful campus bicycles and cute offices. Google is tough, fierce, and probably just clever enough to stay on the right side of the law.
A great deal of information on Google search opportunity came in a 2012 Federal Trade Commission staff report that was released, sort of, in response to a request by The Wall Street Journal. Sort of because the FTC really did not intend to release the document and what it sent by accident was every other page. (I’m grateful to the efforts of Danny Sullivan of Marketing Land to publish text and comments on the report in a series of tweets.)
The FTC study found a number of cases where Google attacked its competitors, especially the “vertical” searches that focus on specific areas. One section dealt with a feud between Google and Yelp, particularly after Google’s attempt to buy Yelp. “Google agreed to remove–and did remove–Yelp’s content,” the report said. “However, after offering its own review site for more than to years, Google recognized it had failed to develop a community of users–and thus, the critical mass of reviews–that it need to support its local product. In an attempt to gain quick access to a large storehouse …” Unfortunately, the completion of the sentence ran onto a missing page. Other companies whose own search operations were seen as competitors by Google: Amazon, TripAdvisor, CitySearch and others. The staff found the pressure on verticals bothersome, but not enough to justify an FTC action.
Scraping suit. It was more prepared to take on Google’s use of content scraped from vertical searches: “Google’s threat also sent a message to the broader marketplace that Google could, and would, use its monopoly power over search to extract the fruits of its rivals’ innovation.” The FTC staff also found violations in Google’s requirement of “anticompetitive, exclusionary agreements” with web sites for syndicated search and AdSense plans.
The staff wanted to bring legal action against Google, but the FTC commission decided not to go to court and settled for a mild agreement instead. The Journal may have gone a little over the top with the story that suggested the decision may have been the result of close relationships between Google and the Obama administration: “Google’s access to high-ranking Obama administration officials during a critical phase of the antitrust probe is one sign of the Internet giant’s reach in Washington. Since Mr. Obama took office, employees of the Mountain View, Calif., company have visited the White House for meetings with senior officials about 230 times, or an average of roughly once a week, according to the visitor logs reviewed by the Journal.”
Google friendships. There certainly is a great deal of friendship between Google executives and administration officials. Several Google executives have held government posts and Megan Smith left a vice president’s job at Google to become the White House’s Chief Technical Officer. (( The idea of executives taking a role in the government is hardly new. General Motors CEO Charles E. Wilson declared what “was was good for our country was good for General Motors and vice-versa” when he was nominated as President Eisenhower’s Defense Secretary. Hewlett-Packard founder and CEO David Packard served as Deputy Defense Secretary under President Nixon. )) But the suggestion the FTC decision was a gift to Google buddies won a heated response from the commission. Chairwoman Edith Ramirez and Commissioners Julie Brill and Maureen Ohlhausen issued a response:
Today’s Wall Street Journal article “Google Makes Most of Close Ties to White House” makes a number of misleading inferences and suggestions about the integrity of the FTC’s investigation. The article suggests that a series of disparate and unrelated meetings involving FTC officials and executive branch officials or Google representatives somehow affected the Commission’s decision to close the search investigation in early 2013. Not a single fact is offered to substantiate this misleading narrative.
It could be that Google used its weight to get the statement issued, too. But that’s pretty unlikely. There are a couple of truths. Knowing how to stay this side of the law when you go close is vital. And making friends with the government is a good idea. Any big company with intelligence learned this from Microsoft.
But Google has also proved that, while it and its fans have a lot of fun with experiments that don’t make profits, remembering that it is tough search that makes the money. Lucky Google competitors get bought; the rest are likely to be eaten.