Survival v. Antitrust (AKA, Remember The Browser)

My CrunchFund partner and long time colleague MG Siegler is having what appears to be a multi-day seizure over Google’s unsurprising move to integrate Google+ social results into Google search. Says Siegler: “Google is almost asking for an inquiry into potentially anti-competitive practices (and it’s coming). Which is insane.”

No, not insane.

Anyone with a passing interest in U.S. antitrust law knows that the government is theoretically good at punishing companies that engage in anti-competitive behavior, such as leveraging market control in one product to help another product compete. But the government is terrible at preventing these actions from happening, unless you think the threat of eventual punishment is enough to deter it. It isn’t.

In the 90’s Microsoft went from dismissing the Internet entirely to putting Netscape out of business. By the time settlements were reached in 2001 and later, Netscape was just a nice memory for most of us. Everyone, and that means everyone, was using Internet Explorer. See my long video interview with the antitrust attorney, Gary Reback, the man who spearheaded the push to break up Microsoft in the nineties, here.

Microsoft survived. Netscape didn’t. And the government couldn’t do anything at all to stop that.

Today, Google search is Microsoft Windows and Office. And Facebook is as much of a threat to Google as Netscape was to Microsoft.

Of course Google is going to do anything it can to survive. Facebook data is already integrated into Bing, and Twitter’s using the “don’t give the milk for free when you can make them buy the cow” strategy by withholding its own data from Google (look for my upcoming post on why Google will eventually realize that they must acquire Twitter at any cost). That’s a dark place for Google to be.

On a much smaller scale Google has been up to this for ages (see my April Fools post last year about Google Places). Now they’re trying to put off the Age of Facebook. The only chance they have is to use their commanding lead in search to do that.

Will the government come along and knock some heads together in a few years? Maybe. But this is a much more nuanced situation that Microsoft’s execution of Netscape. That could take years and years, and the government may question Facebook’s willingness to throw data to their shareholder Microsoft while withholding it from Google (see John Battelle’s post for some color on that).

But what the government does or doesn’t do years down the road is of little concern for a company fighting to stay at the top. It’s so much less important as to not even be part of the decision making process. So get used to Google+ in your search stream, it’s here to stay.

31 thoughts on “Survival v. Antitrust (AKA, Remember The Browser)

  1. Couldn’t agree more. I just don’t see anyone forcing Google to integrate data they don’t have access to. In my opinion they probably would. A thing worth mentioning is that the Google search results page now actually looks like a freaking mess. Which may actually be Google’s bigger problem down the road. On the other hand, it’s not that the new Twitter search or Facebook’s silly search attempts are any better. Time to switch do DuckDuckGo ;)

    • Michael Arrington says:

      the extent to which Google is willing to screw up search illustrates how important social is to them.

      • PatDDixon says:

        I agree, the search page is a disaster, and NOT giving me the results I really want, without searching deeper. The flip side, I appear in top results for my own benefit elsewhere, but what I want from search, is somewhere in the scramble.

      • Yeah, one would think that. Still, the way it’s implement makes you wonder if they just didn’t know how to make it ‘good’ and wanted to get something out there.

      • Ric says:

        MA I’m surprised you miss the obvious here. part of why they can do it and will continue is that everyone screams no fair and half again as many of those will scream that the new arrangement will serve as a detriment to their search accuracy. This again will let Google point out that since their searches arent as accurate anymore … they are actually encouraging competition directly within search for the first time in company history!

        Think of the slack jawed dimwitted reaction from any investigators getting a response like that … priceless!

    • -

      these are (simply) the (well known) Google “methods” … of which I know something for DIRECT (and very bad) experience … just follow the GLXP link on my new site StolenIdeas.Org to know more

      fortunately (for the competition between companies) the Google move to integrate Google+ social results into Google search should NOT HELP so much its “social clone” to compete with Facebook, since (in my opinion) its GFlop+ is already dead due to its very poor number of REALLY ACTIVE users

      I believe that GFlop+ will be closed within this years because its only a pure cost for Google and has no future

      -

  2. PatDDixon says:

    LOL, multi-day seizure for sure…brotherly love comment…I agree with you, it’s business. Period.

  3. Melvin says:

    Finally, someone who backs the argument I’ve made months ago: http://melvinmt.com/23/google-is-not-the-underdog-its-the-new-internet-explorer-2

  4. NG says:

    There is no way that Facebook or Twitter will ever, yes I said ever, replace or overtake Google in terms of search. Google excels at search beyond anyone. Just compare the results of Google and Bing. It’s not even close in terms of relevance.

    Search is hard and incredibly expensive to perfect. Google already has a huge headstart. Those who keep saying that all Facebook has to do is enable search and Google will be in trouble are kidding themselves.

    • Michael Arrington says:

      no, but social can disrupt search in the same way (well, actually in a different way) that the browser disrupted Windows. In the mid 90s buying a mac just wasn’t a reasonable decision. Now it’s the best decision, because of the Internet and browsers working as virtual machines.

  5. Proof positive history does indeed repeat itself. The impending war also offers nothing but opportunity for entrepreneurs prepared to provide users solutions outside of the nuclear states.

  6. racerrick says:

    As long as Facebook and Twitter don’t allow Google to integrate public updates, then I can’t see how the feds can get involved.

  7. Raj says:

    Well said Michael; balanced and most probably the correct point of view. The problem with Google right now is that it believes it can do anything if it wants to (and probably it can) and therefore getting into trouble with everyone else (Facebook – G+, Twitter – G+, Apple – Android, Msft – Chrome and Google Docs and yeah search). That poses a huge risk to it’s future sustainability where it’ll need a separate office to house lawyers alone. However at the same time if it survives, it’ll flush many companies down the drain who are used to rent seeking business models. And that is exactly what is making it so many enemies.

    And I agree when you said it’s not necessarily with evil intentions. Probably today we realize Microsoft was not really evil in 2000s, evil looks more like this: http://techcrunch.com/2011/12/09/apple-made-a-deal-with-the-devil-no-worse-a-patent-troll/. And purely as a consumer I believe if Google fails it’ll be worse for all of us. I like to use fine products but I love it when the seller doesn’t treat me like a rBST treated cow.

  8. Only the paranoid survive, this is why Intel and Microsoft are still here.

    At least with Google there is a bona fide choice. That wasn’t the case when Microsoft had a vice grip on everyone’s desktop.

    All this posturing over free products. Me likes.

  9. Jose Ali Vivas says:

    Hi Michael,
    I am just little disagree with the comparative between Google ~ Windows + Office and Netscape is like Facebook. Why? Because Google does not force anyone to use his search engine [ Google disrupt Hotbot and Hotbot beat Altavista]. The search engine space is different than the OS space. At least not yet. With Windows OS dominate the OS world. Let’s see what happens with Chromium OS and Android, still “Clopen”.

    • Michael Arrington says:

      Microsoft didn’t force anyone to us its operating system, either. Everyone just did.

      • Peter Frandsen says:

        The forced the manufacturers big time – that gave the consumers no choice. And switching search engine is a lot easier than switching os (if it is not pre-installed)

    • Michael Arrington says:

      I mean, I get what you’re saying, that you couldn’t buy a computer without windows, with some exceptions, and people can just jump over to Bing or wherever instead of Google. And I guess Microsoft had more room to screw around with Windows before people would bail on it, but the analogy is still pretty strong.

      • Karl Schneider says:

        Microsoft’s case is very different.

        Microsoft sold an OS that came pre-packaged on computers, an OS which included a variety of included software. Microsoft was able to use this as a trojan horse to get a first crack at potential customers. To compound the problem, they had a strong monopoly in the OS space, and offered rebates to OEMs in order to stifle competition.

        They controlled every computer, used it to promote their own software to customers, and then fought tooth and nail to stop anyone from getting in the way. They used one monopoly (OS) to protect a second monopoly (Browser). The government wasn’t able to do anything more than slap MS on the wrist despite these issues.

        Google doesn’t sell access to it’s search site, it’s freely available. The monopoly that Google holds is much more of a monopoly of consumer choice than was Microsoft’s. Users are freely given an option to choose their search provider in numerous instances, many which provide a competitor to Google as the default. There are also far more Google alternatives than there were Windows alternatives, and the barrier to change is only the will to change.

        Google does have a monopoly, a natural monopoly, and they are using their monopoly to push their own interests in other sectors, just as Microsoft did. Yet, where Microsoft was protecting a second monopoly, Google is promoting a product that’s competing against another competitors natural monopoly. The hard cost to use Google is $0, the hard cost to change is $0, and Google has far stronger competitors. There is absolutely no chance that our incompetent government will be able to get even close to anything outside of a silly face saving settlement which changes nothing of consequence. Nor do I believe they should.

        Google knows this, as do you given your article.

  10. I don’t get all the fuss about “social” being integrated to Search.

    When I search for a keyword, sometimes I want the most objective result, sometimes the one that would be recommended by my friends, sometimes I want to know if there’s any breaking news about it, sometimes I just want an information and sometimes I want to book or buy….

    So, “Social” is just 1 part of the whole game. For me, the big battle is to make search a more relevant and (at the same time) friction-less experience. Search engines should be able to understand what we are looking for. And I’m not always looking for things recommended/made/said by my friends…

    (sorry for my english…)

  11. No Name says:

    “At least with Google there is a bona fide choice. That wasn’t the case when Microsoft had a vice grip on everyone’s desktop. ”

    Who stopped you from buying a Mac or Unix /Linux desktop instead of Windows? Oh, the Pinkertons paid by Bill Gates.

    This just proves for everyone to see that Google is more than willing to game search. Most in the business already knew this though.

    So Arrington, should Google be able to get away with “most relevant results” nonsense now when even the worst Google Plus post will outrank the best story from WSJ? Knowing Google they will make it so 5-10 Google+ posts show first, essentially killing organic traffic to publishers.

    • Michael Arrington says:

      “So Arrington, should Google be able to get away…” – my point isn’t about what google should or shouldn’t get away with. It’s about the fact that the antitrust laws aren’t able to prevent “bad” behavior, just punish it. And when you’re fighting for your long term survival, possible future punishments don’t really factor into the decision making process.

  12. JP says:

    Comment re: Netscape. It wasn’t only Microsoft squashing Netscape, in large part Netscape did it to themselves when they came out with the bloated Communicator (version 4, if I remember correctly). That’s when everybody ran for the exits and jumped Netscape.

  13. Levi says:

    As an avid fantasy sports player, as well as avid follower of world news, Twitter search is hands down the best option. This social stuff is a red herring – the bottom line is Google core search product sucks when it comes to real time and, ahem, we live in a real time world now. If Twitter had the guts and brains they would take their search product, fill it out, and then make THAT the focal point….you would see immediate and dramatic effects on Google’s market share…..

  14. Great dose of common sense in the face of something akin to sensationalist flame-bait.

    Google’s situation may correlate to Windows + Office/IE, but I think it differs significantly, and that it may very well differ enough in key areas to make an antitrust ruling unlikely if not impossible. The ‘monopoly’ tag was relatively easy to pin on MS, but I don’t see how it can be definitively pinned on Google here, and the company must be aware of this.

    MG speaks of Google as if its status as a monopolist is natural and unquestioned and even admirable, seeing as he, um, ‘compliments’ them for it — a sure sign of nonsense being spun. But he provides no proof of said monopoly.

    Google is doing some things that are extremely controversial, but as long as “exclusive control or possession of something” doesn’t apply — and it doesn’t — then I don’t see how they can be stopped or even penalized.

  15. on.ali says:

    Google could have implemented this better in my opinion.

    It could have made it’s case stronger, by still showing simple Facebook and Twitter links alongside some data rich content from Google+.

    For the customer it would have had the same or similar impact of not having FB or Tw at all.

    Google could have just said, look, we are displaying what we got.

    That would have actually forced at least Twitter to strike a deal with Google.

  16. Peter Frandsen says:

    Why is uncrunched not on Google+?

  17. Abiel Abuy says:

    I’m sure before they’d implement the Search+, they (Google) at least consulted with their lawyers.

  18. Sam 22 says:

    Often overlooked (because making simple arguments gets more readers) is that Google and Facebook are drastically different entities and designs. Facebook is (mis-named) “social.” Google is a communication platform (frankly, far more social, but, let’s differentiate the two and stick to “communication and search”).

    Google, like Microsoft, have a platform that is sustainable over decades. Facebook is the flavor of a generation and could vanish like MySpace in the blink of an eye.

    For Google NOT to index Google+ it would delivering dishonest Search results. Google+ is a legitimate source for info in any Search query. Twitter as well, but, yes, they can wall themselves off and demand some high dollar amount for access (or acquisition) since they really don’t have any other sustainable business model.

    If you go back in time to anti-trust regulations, where, for instance, movie studios could not own movie theaters, you’ll see that was eventually unwound decades later without destroying the social or economic fabric of the Nation.

    It’s fascinating how (generally) everyone wants to keep the Government out of any internet regulations, unless it has to do with Google. A tad hypocritical?

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