Facts About Google and Competition

U.S. Senators On Google: “A Great American Success Story"

2011-09-22T12:57:00.000-04:00

A “Positive Force” Toward Small Businesses; Search Regulation Would “Impede Innovation, Entrepreneurship [and] Economic Recovery”

Here’s what U.S. Senators had to say about Google at Wednesday’s Senate Judiciary Committee Hearing:

Google is “a great American success story” and a “standard for innovation”

Senator Patrick Leahy (D-Vermont)

“[Google] has become an emblem for success in the new economy... Whether it is Gmail, Google Books, YouTube, or Google Travel, few companies have invested as much money and creative energy in online ventures - both successes and failures - to improve the online experience, as Google.”

Senator Richard Blumenthal (D-Connecticut)

“What a tremendous success story Google is, a great American success story, a great consumer success story.”

Senator Al Franken (D-Minnesota)

“I want to start out by saying that I love -- I love Google, and I said that the last time Google was here in front of my subcommittee, but I think it bears repeating. Google has utterly transformed the way we locate and use information. And I have a feeling that Google is going to continue to be among those setting the standard for innovation in this country for decades to come.”

Senator Charles Schumer (D-New York)

“Google and its competitors are building the infrastructure of the future economy and it's critical that technological growth not be unfairly constrained. That's how all markets work, but particularly in this area where innovation really matters and things change quickly.”

Google is “a positive force” and “pretty good” toward small technology companies

Senator Charles Schumer (D-New York)

“And every six months or so, I meet with some of the leading high -- the CEOs of the high-tech companies in New York, the growing -- the little ones... And I asked them, "What do you think of Google"? It was off the record... Four-fifths of them said Google is a positive force, much more positive than most of the other large companies they deal with. They said, "It helps us more than it hurts us." Their words, the consensus was... "Google is actually pretty good. We don't see them as rapacious."

Senator Amy Klobuchar (D-Minnesota)

“Google did a very good event in Minnesota. They reached out to some of our small businesses and helped them to set up websites, which was helpful. So I know that there's legitimate work being done with the small businesses.”

Further regulation may be “burdensome” and will “impede innovation, entrepreneurship... [and] economic recovery”

Senator Herb Kohl (D-Wisconsin)

“We recognize the incredible technological achievements of Google and the need to avoid stifling its creative energy.”

Senator Charles Grassley (R-Iowa)

“[Other Iowans] are extremely supportive of Google's products and services. They're concerned that the federal government is being overly aggressive and will place burdensome regulations on a company that is creating good jobs and innovative consumer tools. We should not be penalizing successful companies that are innovating, providing cost-effective and productive services, and creating jobs.”

Senator Charles Grassley (R-Iowa)

“[One Iowan] wrote that, quote, ‘further restrictions on successful businesses like Google are the surest way to impede innovation, entrepreneurship, ultimately threatening any sustainable economic recovery’?”

Commentators on the Senate Judiciary Google Hearing

2011-09-22T09:21:00.004-04:00

Schmidt “Responsive and Deferential”, Had “The More Convincing Argument”

Here’s what independent journalists and commentators are saying about Wednesday’s Senate Judiciary Subcommittee hearing on Google:

Schmidt Was “Prepared and At Ease”, “Responsive and Deferential”, “Calm and Cool”; “Has the More Convincing Argument”

AdWeek

“None of the senators were able to lay a glove on him or his company, and...he avoided making any major mistakes, and came off as prepared and at ease.” (AdWeek)

San Jose Mercury News

“For the most part, Schmidt appeared calm and cool as he fielded questions, and he argued that Google isn't using its dominance in search to stifle competitors. He also avoided sounding arrogant, smug or pedantic in explaining Google's business -- traits that seemed to trip up Microsoft founder Bill Gates when he testified before Congress in 1998.” (Mercury News)

Wall Street Journal

“Schmidt...emerged mostly unscathed from the company's most dramatic confrontation with Washington in its 13-year existence.” (Wall Street Journal)

Colin Gillis, Analyst, BGC Partners
“Gillis said...some of the senators were ‘gunning hard’ for Google but Schmidt handled himself professionally.” (Reuters)

National Journal

“Google Executive Chairman Eric Schmidt put on a show of confidence on Wednesday before a Senate Judiciary subcommittee, giving excruciating details of competitors from Yelp to Bing in testimony aimed at persuading lawmakers that the company is open, honest, and impossible to indict.” (National Journal)

Reihan Salam, National Review Online

“Schmidt...emphasized the many ways in which the environment in which operates is different from the world of the 1990s...I think that Schmidt has the more convincing argument.” (National Review Online)

Randy Picker, Univ. of Chicago Law School

“There was no meltdown there. Schmidt was responsive and deferential. Soft-spoken; disagreed when he needed to.” (Twitter)

Jeff Roberts, Paid Content

“While the dust is yet to settle, it is clear that Google held its own. Schmidt did not make any unforced errors and so the company came away from Washington as well as it could have hoped.” (PaidContent)

Greg Sterling, Search Engine Land

“Google’s Eric Schmidt, the first witness, came off better than most of the senators questioning him. One of his major themes was that Google creates jobs and economic value and regulation might impair job creation in the future...However mostly people spoke in slogans (“level the playing field”) and generalities. Nobody suggested that Google should be banned from placing its own content on [search engine results pages] or that it should loose control over the layout and content on the page.” (Search Engine Land)

Charles Cooper, CBS News

“Then again, the odds were stacked almost entirely in favor of Schmidt, who had the easy advantage in brainpower, facility with the subject matter and, ultimately, cool. Schmidt, sounding often like a geeky version of Casey Stengel, calmly responded to simple - honestly, sometimes simple-minded - questions with winding, coast-to-coast explanations that left his interlocutors with their eyes glazed over.” (CBS News)

Schmidt “Avoided a Gates-Like Disaster”; “At Every Turn...Message Seemed to Be: We’re Nothing Like Microsoft”

CNET

“Schmidt avoids a Gates-like disaster in D.C...He held his own against what appeared to several skeptical lawmakers.” (CNET)

Roger Kay, Analyst, Forbes

“[Schmidt’s] smoothness under congressional fire contrasted glaringly with the prickly way Gates handled himself in 1998...He made several references to Microsoft, both as a competitor and as a company that had itself been in the anti-trust hot seat more than a decade earlier. Essentially, he said, we are not like them.” (Forbes)

New York Times

“After Mr. Schmidt said that he agreed that Google could do a better job describing the changes it makes to its algorithm, Senator Richard Blumenthal, a Democrat from Connecticut, said he appreciated Google’s willingness to change and that it was different from Microsoft. (New York Times, Sept. 21, 2011)

Time Magazine - Techland

“At every turn, Schmidt's message seemed to be: We're nothing like Microsoft....In the end, Schmidt seems to have faced the grilling as best as he could: Polite, deferential, but pushing back firmly when he had to.” (Time)

Melissa Maxman, Antitrust Attorney, Cozen O’Connor

“Maxman said that was a good tone for Schmidt to hit. ‘It's the smart way to present it because the Microsoft inquiry didn't go all that well.’” (USA Today)

Critics “Failed to Establish that Google Has Harmed Competition”, “Found No Evidence of Google Antitrust Violations”, “Flat Out Lied”

Eric Goldman, Santa Clara Law School

“The most noteworthy thing is what didn't happen. The senators, obviously amply aided by Google critics, apparently have not found any smoking gun evidence of Google antitrust violations, just like all of the other Google critics have failed to do. “ (Politico Pro)

Keith Hylton, Boston University Law School

“But some legal observers said that rivals have so far failed to establish that Google has harmed competition rather than just competitors. ‘At this stage, all we know is that some rival firms have suffered as a result of Google's practices,’ said Keith Hylton, an antitrust expert at Boston University's School of Law. ‘But that doesn't tell us whether consumers have been harmed in any way.’” (Wall Street Journal)

Tom Tobin, Rochester Democrat and Chronicle

“Some of the complaints were puzzling, as they dealt with Google’s supposedly agnostic listing of seach findings.” (Rochester Democrat and Chronicle)

John C. Dvorak, PC Magazine

“Seriously, if we are going to go after Google for playing dirty, let's nab it for something other than the fact that its search engine is doing its actual job. I want to remind people that sites unwillingly crawled can simply add some text to the code. The stop-the-bot text will prevent a Google bot from reading the page. It seems to work and there are plenty of black sites all over the net that Google does not index...Like any other big company, no matter what the motto, you can be sure Google aggravates someone. The complaint that the company is shuttling search results to its own sites seems bogus. Let's find something real to complain about.” (PCMag.com)

Stacey Higginbotham, GigaOM

“I’m not sure I can buy into the gatekeeper idea as a reason for Washington to intervene. If consumers can switch easily to a new search engine, Congress getting involved makes it seem like we are in danger of becoming a nanny state to protect specific business interests. And that makes me nervous...In fact, the biggest elephant in the room was a clash of cultures between the Silicon Valley culture of the free market — and using technology to create a better consumer experience — and Washington D.C.’s inherent cynicism and pandering to constituents.” (GigaOM)

Frank Reed, Marketing Pilgrim

“Nobody owes anybody anything in any of this. Companies like NexTag, Yelp and even Microsoft, however, are parading out under the banner of “Representing the Commoners” when all they really look like in the end is the guy who thinks that he should have had Google’s ideas and success rather than the version he has. And they feel that, as a result, the search engine owes them something. That’s just whiney and lame especially coming from companies that have benefited greatly from Google’s search engine to this point.” (Marketing Pilgrim)

Mike Masnick, TechDirt

“The most ridiculous testimony came from Thomas Barnett, a lawyer for Covington & Burling, who was representing a bunch of Google competitors who put together an operation called FairSearch. When asked about whether or not Google was a monopoly player, Barnett flat out lied, claiming that Google is dominant and can't be unseated ‘because it got there first.’” (TechDirt, Sept. 21, 2011)

Matthew Ingram, GigaOM

“Everyone likes to beat up on large companies...but being big is not illegal, and no one (or at least no one credible) seems to be arguing that Google achieved its market size through nefarious means. And simply being unfair to competitors isn’t against the law either. That leaves it to the government to prove that the company is somehow harming consumers by its behavior, and that is going to be a very difficult case to make.” (GigaOM)

Matt McGee, Search Engine Land

“I don't have a problem at all with Google showing its own properties (like Google Maps, Google News, etc.) in search results. Of course it does. The analogy that's been made is a good one, I think: We don't demand that the NY Times show articles on its front page from USA Today or the Wall Street Journal, so why should Google have to show other companies' properties ahead of its own?” (Sphinn)

Hearings “A Kind of Theater,” “Seemed Pretty Misguided”; Lack of Independent Witnesses “Is a Critical Flaw”; “People Seemed to Be Making a Big Deal Out of Nothing”

Greg Sterling, Search Engine Land

"Unfortunately the fact that the subcommittee didn’t include any third party analysts, observers, advertisers or search marketing agencies to testify — in other words (relatively) disinterested parties — is a critical flaw in the design of these hearings. Accordingly they emerge as a kind of theater and not so much a fact-finding inquiry." (Search Engine Land, Sept. 21, 2011)

Erick Schoenfeld, TechCrunch

“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.”

Erik Sherman, BNET

“The senators came brimming with television-ready outrage, not any particular desire to ask serious questions of Schmidt...I’m the last to say that Google is “good.”...But, really, making an antitrust violation out of the fact that people like using Google’s search engine? Maybe it’s time for Congress to focus on something more important — like the banking system, the terrible state of the country’s finances, a buckling middle class.” (BNET)

Jeff Jarvis, Buzz Machine

“Congress should follow Google's first law: "Focus on customers first." AKA citizens.” (Twitter)

http://twitter.com/#!/jeffjarvis/status/116591473759240192

Mike Masnick, TechDirt

“Well, the second part of the Senate's anti-Google hearings have wrapped up, and like the first part, they seemed pretty misguided. It was a lot of repeating things about how Google is big. There were some reasonable points that do bear more scrutiny, concerning some of Google's business dealings with partners, but, on the whole, people seemed to be making a big deal out of nothing.” (TechDirt, Sept. 21, 2011)

Whit Andrews, Analyst, Gartner

“This is just another cycle for Google. It has faced scrutiny before and artfully deflected it through real action and continuing to provide an excellent product.” (The Independent UK, Sept. 21, 2011)

Responses to Senate Hearing Witness Claims

2011-09-21T08:36:00.003-04:00

Below are responses to some of the claims made in prepared testimony for today’s Senate Judiciary hearing:

Jeffrey Katz, NexTag

CLAIM: “Google rigs its results, biasing in favor of Google Shopping and against competitors like us. As a result, Nextag’s access is more and more discriminated against.”

RESPONSE: We’re trying to provide our users with better answers, and we have found through our testing that when a consumer types in a query like “flat screen TV prices,” they want to see shopping results (plus, Bing and Yahoo provide the exact same kind of shopping results). Our algorithms are designed to give people the best answer, and we’ve designed a rigorous scientific process that is driven by user feedback. Google and NexTag are both vying to provide consumers with the most useful shopping results possible, and the great thing about the openness of the Internet is that consumers can easily switch from Google to NexTag if they don’t like the answers we’re providing.

CLAIM: “Google says that competition is just one click away, but that is like saying move to Panama if you don’t like the tax rate in America. It’s a fake choice because no one has Google’s scope or capabilities and consumers won’t, don’t, and in fact can’t jump.”

RESPONSE: We’ve seen first hand evidence that consumers can, will, and do jump. In January 2009, a bug in our search results caused all results to be falsely labeled as “harming your computer.” During that time, search traffic to Yahoo! surged by 50 percent as consumers sought alternatives.

Jeremy Stoppelman, Yelp

CLAIM: “Google is no longer in the business of sending people to the best sources of information on the web. It now hopes to be a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews. It would be one thing if these efforts were conducted on a level playing field, but the reality is they are not.”

RESPONSE: Sometimes the best, most useful answer to a query is one of the traditional “ten blue links.” But sometimes it’s a news article, sports score, stock quote, flight times, video, shopping results, or a map -- any of which we may place above or among the other results from across the web. Every search engine has shifted toward providing more answers directly in the search results -- because it’s what consumers want.
CLAIM: “We again asked that Google cease its practice of co-opting content from Yelp for its own benefit. Google responded by removing Yelp links from portions of Google’s web search product, providing a new twist on the same old false choice: if we chose not to help power Google Local, we could not appear in the “merged” portions of Google’s web search results. To date, consumers cannot find links to Yelp in Google’s merged results, belying Google’s public pronouncements that “the competition is just one click away.”

RESPONSE: Yelp's website continues to appear in organic web search results like any other site we index (for example, on relevant searches such as "restaurants" and "review site"). However, to meet Yelp’s demand not to use the content we crawl from Yelp for any of our local search services, their website no longer appears on results from precisely those local search services, including when those local results are on the google.com search results page.
CLAIM: “Is a consumer (or a small business, for that matter) well served when Google artificially promotes its own properties regardless of merit? This has nothing to do with helping consumers get to the best information; it has everything to do with generating more revenue.”

RESPONSE: In fact, most of the click traffic (roughly two-thirds of clicks) from our local search result pages goes directly to small business websites, and review sites make up the next largest percentage (about a quarter of clicks). Less than 10% of clicks from our local results page go to Google Place Pages.
CLAIM: “Today represents a rare opportunity for the government to protect innovation.”

RESPONSE: Unfortunately, what Yelp and other sites are proposing is that the government intervene in one company’s product design -- specifically by regulating search results. While competitors may like that, ultimately we believe that regulation of search results will make make search engines less useful for consumers.

Tom Barnett, Expedia and FairSearch

CLAIM: “Search is the critical gateway by which users navigate the web...As a result, search traffic is the lifeblood of innovation and development on the Internet, and search engines control the flow of that traffic.”

RESPONSE: Search engines are definitely useful, but consumers have lots of ways of finding the content they’re looking for. Google serves more like a GPS on the Internet highway—not an on-ramp. It helps people get around, but it’s not necessary. If someone knows where he wants to go, he can navigate to those destinations directly, whether it’s Craigslist, the New York Times websites, or icanhascheezburger.com. Consumers can also use a “map” (a list of links or portal like Yahoo’s directory), directions or recommendations from a friend (links from Twitter or Facebook friends), or even a mobile application (for example the NY Times or Yelp app).

CLAIM: “At this point, Google faces competition from only one general search engine in the U.S. -- Bing, which is a distant second.”

RESPONSE: This isn’t true. The Internet and the advertising space are both incredibly competitive, and Google competes against a broader array of companies than most people realize. In search, we don’t just compete against other general search engines (Bing, Yahoo), but new forms of accessing information, including specialized sites (Amazon, WebMD, eBay), social networks (Facebook, Twitter) and mobile apps. In ads, we compete for ad dollars every day against other forms of advertising, including TV, radio, newspapers, magazines, and online banner ads.

CLAIM: “Just last week, Google launched its own online travel search service. Notwithstanding the judicial decree and Google’s promise, the service excludes any link to online travel agencies, which are key options for comparison shopping.“

RESPONSE: We’re excited about the initial positive reaction to our new flight search tools. But like any other partner, Google needs to honor the airline’s distribution decisions. With the flight search feature, that means that we can only show airlines in the booking links. We will be exploring opportunities within the page to showcase the products and services from other relevant partners, including online travel agencies and metasearch sites.

CLAIM: “Further, the Google service utilizes a new version of ITA software that, now that Google owns ITA, is available only to Google, also continuing to undermine choices for consumers.”

RESPONSE: Under the terms of our consent decree (page 16) Google is not required to provide to other companies any technology that we develop exclusively for use in Google services. We committed to continuing to license ITA’s QPX software to airfare websites on commercially reasonable terms, and maintain that commitment. Furthermore, Kayak said just last week, “We’re confident in our ability to compete, and we believe our flight search technology is superior. We recognize Google is a formidable competitor but they haven’t been successful in every vertical they’ve entered.”
CLAIM: “Users expect search results to be returned in order from most relevant to least relevant. As discussed above, when Google places links to its own products (e.g., News, Product Search, Places) in one of the top positions without any indication that these are “unnatural,” hard-coded links, the result is deceptive to the user.”

RESPONSE: There’s no evidence that these type of results are deceptive to user. In fact, Yahoo! and Bing provide the same exact type of results at the top of their results pages, which demonstrates that all search engines have found that users find these type of results useful.

CLAIM: “In the absence of a competitive search advertising marketplace, the prices Google commands for advertisements are higher than they otherwise would be. Just as in the offline world, higher advertising prices are passed along to consumers in the form of higher prices on goods and services.”

RESPONSE: Google’s advertising prices are set by advertisers themselves, who bid what they’re willing to pay per click, and Google places no restrictions on advertisers moving their own ad campaign data to other platforms. In fact, the vast majority of our advertisers use advertising services from other online search engines in addition to Google’s. Barnett provides no evidence whatsoever that consumer pay higher prices because of Google’s policies.

CLAIM: “Google’s tactics foreclose the ability of other sites to compete on the merits and to achieve the scale necessary to succeed. Without search traffic and the resulting revenues, these sites are unable to deliver innovative content and better services to consumers.”

RESPONSE: Google was built for users, not websites, and Google doesn’t “owe” traffic to any website any more than the Drudge Report “owes” links to the New York Times or the Washington Post. The fundamental openness of the Internet means that any site with a strong offering can find users.

Search Startup Blekko: “We’re Not Afraid of Google, Why is Washington?”

2011-09-20T21:11:00.000-04:00

Rich Skrenta, CEO of search engine startup Blekko, had this to say about Wednesday’s Senate Judiciary hearing:

Blekko's not afraid of Google, why is Washington?

Eric Schmidt will appear before a senate committee tomorrow to defend Google against claims that it has abused its position in the marketplace.

Apparently the prize if you win really big: you get to pitch your startup to congress.

The former tech darling has begun to assume the same status of “startup grown too big for its britches” that was once hung around the neck of its nemesis Microsoft.

But we don’t need federal intervention to level the playing field with Google. Innovation and competition are far more powerful instruments to battle companies that have grown powerful and influential. Which has been more detrimental to Microsoft's business? The lawsuit brought by the Department of Justice in the 90s, or the innovative products Apple has brought to the marketplace?

The success of Google should be applauded on Capitol Hill, not derided.

Let’s let entrepreneurs, technology and good old-fashioned innovation deal with Google. Consumers will always be the winners in that scenario.

A Guide to the Senate Judiciary Hearing

2011-09-19T23:15:00.000-04:00

Here’s a viewer’s guide to the Senate Judiciary Antitrust Subcommittee’s Google hearing on September 21:

When you hear, “Google is a gateway to the web and controls what people see,” remember...

Using Google is a choice. Sure, Google has lots of users, but Google is more like a GPS for the Internet -- a helpful guide, but not necessary to get around
Why do people use Google? Because it gives them the answers they’re looking for.
Unlike technologies of the past (like browsers or operating systems), the Internet is fundamentally open, which means if consumers don’t like the answers Google provides, they can switch with one click to sites like Bing, Yahoo, NexTag, Amazon, Yelp, Facebook or any other website.
AOL and MySpace were called “gatekeepers” once too...

When you hear, “Google favors its own content,” remember...

Google ranks search results to deliver the best answers to users, and that is the only consideration – not political viewpoints, and not advertising dollars.
Sometimes the best, most useful answer to a query is one of the traditional “ten blue links.” But sometimes it’s a news article, sports score, stock quote, flight times, video, shopping results, or a map -- any of which we may place above or among the other results from across the web.
Every search engine has shifted toward providing more answers directly in the search results -- because it’s what consumers want. Microsoft and search experts agree.
Can you spot any differences how Bing, Yahoo! and Google answer these queries?
“samsung bd-p1600 prices” : [Bing result] [Yahoo! result] [Google result]
“chinese restaurants san francisco” : [Bing result] [Yahoo! result] [Google result]
(we can’t either...)

When you hear, “Google’s search ranking changes hurt a certain website or caused them to lose traffic,” remember...

Google makes more than 500 changes to our search algorithms every year, and each change is designed to improve the quality of our search results for consumers. Consumers come to search engines to help them sift through all the information on the web, and not every site can appear at the top of the results.
We have a rigorous scientific testing process to assess how consumers respond to potential algorithm changes.
We understand that it’s frustrating for websites when their sites fall in the search results. That’s why we provide a huge amount of information to websites about how to improve their performance.

When you hear, “Google deters other companies from innovating,” remember...

The Internet is the ultimate level playing field. Google’s success in search hasn’t stopped companies like Facebook, Twitter, Groupon or LinkedIn from finding huge audiences online. Google’s success hasn’t stopped the explosion of mobile apps as a new way for people to consume information.
Google has affected innovation in positive ways. Android has sparked new innovation in mobile devices, while our web browser, Chrome, helped jump-start innovation in the stagnant browser space.
Google’s programming tools have allowed new businesses to be created. For example, a business called MapMyRun.com allows you to track your running routes, utilizing Google Maps to power its service.

When you hear, “Google is hurting small businesses,” remember...

It’s just not true. In fact, Google’s search quality team has worked hard to develop algorithms that surface small and local business home pages (sometimes ahead of large review sites) when someone is searching for them.
We continually keep small businesses in mind when we test out new algorithms and evaluate possible improvements to the algorithms.
The biggest problem small businesses face is not being online in the first place (63% of small businesses don’t have a website). Google is helping solve that problem through our “Getting America’s Business Online” initiative.

When you hear, “Google used third party reviews improperly for its Place Pages,” remember...

Partly in response to business conversations with third party review websites, Google changed its Place Pages in July to no longer include review snippets from third party review sites (Google never showed whole reviews from other sites). Independent analysts said that this change “Essentially...gives Yelp and Trip Advisor their wish...”

Google still wants to be able to provide high-quality local business information to consumers, which is why we acquired Zagat.
If consumers don’t like the answers that Google is providing about local businesses, they can switch to Yelp, TripAdvisor or other sites with one click

When you hear, “Google limits choice in the Android mobile operating system,” remember...

Android is open source, and any phone manufacturer can use it for free. That’s led to more choice and competition in the smartphone space.
Google doesn’t require phone manufacturers who use Android to pre-install Google apps. If they choose to pre-install Google apps, that doesn’t stop consumers from installing apps from Google’s competitors.

For more, visit http://www.google.com/competition/

Internet “Gatekeepers”: A History of Exaggerations

2011-09-19T11:18:00.001-04:00

Some critics and competitors call Google a “gatekeeper” to the internet. But Google is not the first -- and won’t be the last -- tech company to be branded with this title. Where are these fomer supposed “gatekeepers” today?

The Players	The Concerns	The Outcome
AOL and Netscape merger, 1999	“If it goes through, the software nearly everyone uses to surf the Web will be owned either by Microsoft or AOL. These are the wrong companies to wield so much influence on the future architecture of the Internet... they would be the gatekeepers for commerce, and they would have the public pay to communicate with each other, or even to debate each other or socialize.”	As of March 2008, Netscape Navigator no longer exists.
AOL and Time Warner merger, 2000	“[Critics] see it as a merger of two of the country's largest information gatekeepers. The combined company would have a huge distribution network -- AOL's Internet business and Time Warner's cable network -- plus a stable of content that includes top-line magazines, movie studios, book publishers and TV networks.” “AOL Time Warner will be like an air-traffic controller, deciding who gets landing rights and who gets gates.... They can make sure that their services and content get preferential treatment.”	The merger was unwound in 2009 after record losses. “To call the transaction the worst in history... does not begin to tell the story.” (New York Times)
MySpace, 2005	“MySpace has 41 million registered users and ranks 19th on the list of most-visited Internet sites... Its 24 million unique visitors in October exceeded the combined traffic on Facebook (9 million), Xanga (8 million) and Friendster (1.4 million). That makes MySpace the prime gateway to marketing's dream demographic: 14- to 30-year-olds.”	In May 2011, MySpace had 35 million unique monthly visitors; Facebook had 157 million. MySpace was sold in June 2011.

Flight Search: Good for Competition and Consumers

2011-09-14T17:56:00.003-04:00

Consumers and Experts on Google’s New Flight Search Tools:

“Ultra Fast Indeed!” “Rather Powerful”; Other “Companies Will Rise to the Challenge and Offer Different Solutions”

Earlier this week, Google unveiled its new flight search tool (google.com/flights) for consumers, based on Google’s acquisition of travel company ITA Software. Here’s what consumers and experts are saying about these tools:

Greg Sterling, Search Engine Land
“Google has made what amounts to a promising down payment on more ambitious travel search tools with its new Flight Search, debuting today.” (Search Engine Land)

Aaron Ritoper
“Google’s product further validates the space and shows that Meta search is a key consumer service that people want...Travel search still has much room to develop, and users will appreciate how some companies will rise to the challenge and offer different solutions.” (Tnooz)

Wired
“Google debuted its long awaited flight search Tuesday, achieving Concorde-like speed in returning airfares to would-be flyers...Results from flight searches show up almost instantly — which comes as something of a miracle, given how accustomed we’ve all become to ten second-waits to find a cheap fare to Boise, Idaho. (Wired)

Tom Costello
“I’m so stunned that I might smile!” (Tnooz)

John Pope
“Fast isn’t the word for it though, it’s ultra-super-sonic-speed-in-the-extreme.” (Tnooz)

Lifehacker
“Google Flights Search Is a Powerful, Intuitive, Lightning-Fast Tool for Finding Cheap Tickets” (Lifehacker)

J.P. Hart
“Ultra fast indeed! (Tnooz)

Andrew Tipton
“It’s rather powerful: as long as the origin airport is one of those shown on the map, and the destination airport is reachable via a domestic flight on one of the major airlines (AA, AS, B6, CO, DL, F9, UA, US), the search results come back instantaneously...Colour me impressed.” (Tnooz)

Peggy Lee
“Wow! And Fast yes.” (Tnooz)

Larry Smith
“The Limits slider graph is sweet.” (Tnooz)

New video: Under the Hood of Google Search

2011-08-29T13:12:00.001-04:00

In the world of search, we’re always striving to deliver the answers you’re looking for. We put together a short video that gives you a sense of the work that goes into the changes and improvements we make to Google almost every day. While an improvement to the algorithm may start with a creative idea, it always goes through a process of rigorous scientific testing. Simply put: if the data from our experiments doesn’t show that we’re helping users, we won’t launch the change.

Microsoft and Experts Agree: Search Is Evolving Beyond Links

2011-08-05T11:56:00.002-04:00

Analyst: Google and Microsoft “In an Arms Race...To Make Search More Intelligent”

In the past few months, Microsoft and its anti-Google organization FairSearch have criticized Google for including maps, shopping results, and videos in search results -- even if those are the best answer for users. But over the past several days, Microsoft engineers and independent experts have agreed that search has been evolving from just a tool for finding websites, into providing consumers with better answers.

Search Engines Already Providing Richer Answers on Search Pages
“Google and Microsoft’s Bing are able to answer some specific searches -- such as “Mariners score” -- with relevant information on the results page. You can search for “Seattle weather” and and immediately get a forecast, without navigating to someplace like Weather.com.... [Computer scientists Oren] Etzioni envisions a world -- just three to five years from now -- in which search engines scour the Internet based not on keywords, but on extracted information.” (Seattle Post-Intelligencer, August 3, 2011)

Microsoft’s Head of Search: Criticizes Search Engines for Being “Still a Web Site Finder”
Microsoft’s president of the Online Services Unit, Qi Lu, told the New York Times that search engines are evolving beyond “ten blue links” into providing richer types of answers for users -- whether that answer is flight results, a video, a map, shopping results, or even a seating chart:

“In short, Mr. Lu describes a vision of a search engine that is part intelligent software assistant and part mind reader. ‘Search is still essentially a Web site finder.’ Mr. Lu says. ‘It’s all nouns. But the future of search is verbs -- computationally discerning user intent to give them the knowledge to complete tasks.’”

“In Bing, the most visible evidence of the decision-engine concept is the ability to aggregate and present specific kinds of information in a search result. Microsoft has invested in travel services, for example. Type “flights to San Francisco” into Bing, and below a few blue-shaded links to ads is a Bing Travel flight database.”

Microsoft Search Executives: Searchers “Want to Complete Tasks Within Search,” Rather Than Be Sent to Websites
In an interview with PaidContent, Bing’s search director, Stefan Weitz, said:

“When they do a standard search, people end up using five to 10 different resources in the completion of these tasks. But, according to our research, 58 percent of heavy users want to complete tasks inside the search engine. That’s a big jump from a few years previously. Google found the same thing recently. So we’re taking Bing to a place you can actually accomplish things and do things, rather than send you off to those sites.”

Qi Lu agreed with this sentiment at Microsoft’s recent Financial Analyst Meeting:

“Search is a means to an end. We want our product to go substantially beyond just finding information, go all the way to help the user make decisions and complete tasks.”

Microsoft’s Head of Search: Bing “Is Now a Credible Alternative to Consumers, to Advertisers”
At the same Financial Analyst Meeting, Lu also expressed “a high degree of confidence” that the Bing is very competitive:

“We've been materializing the benefits of the strategic goals for this partnership [with Yahoo], particularly in search quality. Because when you combine the search tasks together... our product gets better and better, benefits both companies, and it benefits consumers, because we, the combined traffic up 30 percent, almost 30 percent United States, is now a credible alternative to consumers, to advertisers.”

“We can say our search quality at the baseline is on par with our competitors. And even more importantly, the pace of improvement, the speed at which we were improving our quality is faster against our competitions... we do have confidence, a high degree of confidence that we'll be very, very competitive in our product quality, and be able to sustain and accelerate the pace of innovation.”

“So, if we add these things together, take a recap for the last 27-plus months, we come from a long way. We started the journey when we were a distant third in a three-way race. We had less than 7 percent market share. Now our platform is truly a credible alternative in the United States, and we have a quality product, a good brand.”

Experts: This is Where Search is Headed
Experts agree that Google and Microsoft are competing over who can provide better answers and help users complete tasks:

Esther Dyson, Technology Analyst

“There is so little context in current search, and what Microsoft is trying to do is present users with context and structure, more a map of the world of information instead of just ranking it, especially in specific subject areas like travel and health. Microsoft is trying to beat Google at this different game.” (New York Times, July 30, 2011)

Oren Etzioni, Computer Science Professor, University of Washington

"Instead of poring over long lists of documents that contain requested keywords, users need direct answers to their questions."(Nature, August 2011)

“Both these companies are making important steps to make search more intelligent. It’s an arms race.” (New York Times, July 30, 2011)

Leading Economics Bloggers: No Case Against Google

2011-08-03T13:46:00.003-04:00

A new survey released by the Kauffman Foundation asked leading economics bloggers whether the U.S. government should file an antitrust suit against Google. 93% said there was no need for a suit:

This follows a January survey by Rasmussen showing that 77% of people oppose government regulation of search results.

New York Times: Bing “Now a Scale Player” in Search

2011-08-01T17:23:00.000-04:00

If you haven’t seen it yet, check out Sunday’s New York Times profile on Microsoft’s Bing and how it’s competing in the search engine space. Two things worth noting:

Microsoft’s head of search Qi Lu comments on how search engines are evolving beyond “ten blue links” into providing richer types of answers for users -- whether that answer is a video, a map, shopping results, or even a seating chart:

“Search is still essentially a Web site finder.” Mr. Lu says. “It’s all nouns. But the future of search is verbs — computationally discerning user intent to give them the knowledge to complete tasks.”
Laura Desmond, CEO of ad agency Starcom MediaVest, notes that Bing’s share of its clients’ search clicks has grown over the last nine months, telling the Times, “Bing is clearly behind Google, but now it’s a scale player as well.”

Advertisers and Ad Agencies: “Government Regulation of Google...Would be a Disaster"

2011-07-25T12:14:00.007-04:00

Google is “Quite Transparent,” “Has Revolutionized” Small Businesses

Since the Federal Trade Commission launched its review of Google’s business, advertisers and ad agencies have been weighing in with their thoughts:

Small Businesses: “Government Involvement...Would Suffocate” the “Ever Changing...Online Advertising Arena”; “The Government Has it All Wrong”

Ross Twiddy, Director of Marketing, Twiddy (vacation rental company)

Corolla, North Carolina

“As a small second generation family business on the Outer Banks of North Carolina, Google’s advertising system has revolutionized our vacation rental business Even though the Outer Banks of North Carolina is a small area, we’re competing on a national level for summer vacations, and we’re able to host more summer family vacations than ever before. In our experience, I cannot see the logic in government involvement as I believe this would suffocate the resources required for the ever changing and sophisticated online advertising arena.” (Blog, July 10, 2011)

Kevin Bross, Etrailer.com
Wentzville, Missouri

“No company we have dealt with has ever come close to offering as many resources for improving our business as Google...They offer tools and data that help us to better help our customers. We don't use Google because we have to, we use Google because we want to....Customers don't use Google because they have to, there are many search engines. They want to, because it works.” (Corporate Blog, August 11, 2011)

Quinn Moo, President, Joy Jewelers

Torrance, California

"Since my firm began advertising with Google in 2002, Google has become increasingly transparent, not less so. There is no reason for the FTC to regulate the paid and organic search results that appear on Google." (Statement, July 25, 2011)

Linzie Venegas, Sales and Marketing Manager, Ideal Shield (industrial parts company)

Detroit, Michigan

"Last year, we received over one million advertising impressions on Google, but we only paid when people clicked on our ads. With direct mail, I would have paid for all of those impressions, regardless of whether people opened it or not. With Google, we’re not locked in like we would be with a quarterly print ad schedule, even if it's not working for us. And we use Google Analytics to help us design our website and develop our advertising. It seems like the government has a lack of knowledge about what Google actually does and how it helps businesses." (Statement, July 29, 2011)

Tom Nightingale, VP and Chief Marketing Officer, Con-way (freight and logistics company)

Ann Arbor, Michigan

“To say that Google has revolutionized our advertising strategy would be an understatement. To say that Google has abused its power would be entirely inaccurate in my view. In short, Google’s model works, it represents the best of the free market and innovation and as an advertiser and a user myself I certainly don't support any action by the federal government to intervene in Google's business.” (BtoB Blog, August 2, 2011)

Mark Aistrope, CEO, Meeting Tomorrow (audio-visual service)

Chicago, Illinois

“Based on the early reporting of what’s being alleged I think the government has it all wrong...Google, more than any other company I know, has helped drive measurable productivity gains in the US economy and around the world, allowing companies to do more with less, and grow and create jobs. Google is a productivity multiplier for Meeting Tomorrow—both as advertiser and as search users. Google ads provides us with the most efficient and cost-effective way that I know of to reach customers in the market for our services. Google allows us to stretch our marketing dollars farther than any other advertising medium or other means of acquiring customers.” (Blog, July 25, 2011)

Rich Craig, Owner Rent-A-Relic (rental car company)

Oakland, California

"The rental car industry is dominated by large corporations, and while Rent-A-Relic has been able to compete by providing good value and great service, it has sometimes been difficult to break through in our advertising. Then I started a Google AdWords pay-per-click campaign and the playing field has really leveled out. I know that more new customers are willing to contact us and eventually rent cars from us because our pay-per-click listing is similar to the listings for the national brands. Given how well it's worked for my business, I certainly don't see any problems here that the government needs to address." (Statement, July 27, 2011)

Cheryl Richardson, Chief Operating Officer, Concept To Promotion (marketing services company)

Benton Harbor, Michigan

“I own a small business in a small town, and Google AdWords has allowed me to expand my reach to large corporate customers. The success of Google advertising is due to the incredible metrics and the ability for advertisers to choose their level of online participation and at what costs. You can't get that with print ads! This is fair business at its finest, and regulation is not needed.” (Statement, July 27, 2011)

Louis Green, President and CEO, Michigan Minority Supplier Development Council

Detroit, Michigan

“Google has been an amazing partner in maximizing the competitiveness of minority businesses and in leveling the playing field for small business owners. The success they have enabled in the communities we serve has transformed companies, neighborhood, careers and lives. Google is a success enabler, and I don’t think the federal government needs to do anything about that except get out of the way.”

Rich Masterson, Chairman, CampaignGrid (online ad platform for candidates and causes)

Fort Washington, Pennsylvania

“The fact that Google has become a worldwide leader should not make us feel threatened; it should make us feel proud. Our Government would do well to think about ways of encouraging success stories like Google, not spend taxpayer money on multi year investigations into something as innocuous as advertising. Consumers and advertisers have a choice and if Google violates the trust of either then the market will respond accordingly and it will require neither years of investigation or the using precious taxpayer funds of a country already overburdened with national debt.” (Blog Post, July 15, 2011)

Ad Agency: “If Google Screws Up, It Will Lose Advertisers’ Business in a Heartbeat”

Robert Murray, Global CEO, iProspect (digital marketing agency)

Boston, Massachusetts

"Our firm helps businesses large and small manage their search advertising campaigns, and based on our experience we just don't see the need for the federal government to get involved in policing search or online advertising. The online advertising space is dynamic and highly competitive -- with new formats like mobile and social competing for advertisers' attention -- and if Google screws up, it will lose advertisers' business in a heartbeat." (Statement, June 22, 2011)

Nick Shah, Co-Founder & CEO, Ampush Media

San Francisco, CA

“We use Google’s search advertising tools as well as other internet advertising platforms to identify consumers who are interested in furthering their education on behalf of our university clients. Instead of Google fixing a price for valuable search queries, Google designed an auction process where the advertisers set the price; Google’s ability to engage in monopolistic price gouging is eliminated through this system design. Google also allows smaller, newer advertisers to compete on the same playing field as large, established advertisers. Google’s products and services do a lot to facilitate competition in many industries including education marketing, and there are many other high-flying media & technology companies that compete pretty squarely with Google. Depending on the outcome, the FTC investigation could potentially hurt competition in the internet advertising industry by handcuffing one of the many important players. I hope that does not happen. I’d prefer to see a fair fight.” (Statement, August 22, 2011)

Search Advertising Agencies: “No Antitrust Case...Due to the Way Pricing is Set...in Paid Search”

Craig Macdonald, Chief Marketing Officer, Covario (online advertising agency)

San Diego, California

“[Google is] quite transparent when it comes to how they determine Quality Score, and advertisers who do not benefit from this understanding either have not put in the work, or are simply unhappy with the result (they are bidding on irrelevant keywords, which hurts quality score, which raises price – those are the publicized rules of the auction – play or don’t play)....Our position then, as it is now, is that there is no antitrust case in paid search due to the way pricing is set in the market for paid search keywords.[…] Google provides a service to the market – it organizes information more efficiently than anyone else out there right now, and makes it available to consumers and to advertisers. And they should be allowed to do so unfettered.” (Multichannel Merchant, June 27, 2011)

George Michie, CEO, Rimm-Kaufman Group (search marketing agency)

Charlottesville, Virginia

“Government regulation of Google or the search industry would be a disaster for consumers and advertisers alike. Legislating organic search algorithms would destroy the incentives to innovate, and is completely unnecessary as Google's incentive is to provide results that the users want. If Google fails in that, users are one click away from a different search experience with a different engine. The notion that somehow advertisers are hostages to Google is also absurd. There is an ever expanding array of advertising opportunities online and off; Google has grown to be a major player precisely because the advertising works so well for both advertisers and consumers. Moreover, advertisers have complete flexibility in how they buy advertising from Google. Advertisers determine how much they are willing to spend for each click on each ad. The price is not set by Google, it is set by the advertiser. Google is a platform on which advertisers compete with each other. May the best companies win and may government stay out of the way!” (Statement, July 15, 2011)

Industry Experts: “If No Consumers Are Harmed,” What’s the Problem?

Chris Boggs, President, Search Engine Marketing Professionals Organization (SEMPO) and Director of Search and Media Thought Leadership, Rosetta

"It's no exaggeration to say that Google's innovations in search advertising have led to the growth of the search engine marketing industry, which today employs thousands of individuals. It's distressing to see some of Google's competitors paint a negative picture of Google, since the Google that I know has created job and economic opportunities for thousands of search advertising experts. I'm concerned by the notion that the Federal Trade Commission might use its investigation of Google to regulate search results or search advertising, especially if they don’t fully understand the industry and the current state of the ecosystem’s evolution.While I may not agree with everything that Google does, I think it would set a terrible precedent and hinder growth if the government were to start messing with Internet content. We have seen this happen in other nations, quickly resulting in international uproar and claims of unwarranted censorship. I encourage everyone in the digital marketing industry to stand with Google – mostly because I believe in the right of any publisher to determine what ii places on its Web site, and to develop a competitive free market advertising solution to cater to its visitors. If Google can be “told” what to do, who’s to say that the next step isn’t me having to send my blog posts by government regulatory team prior to publishing them." (Statement, September 26, 2011)

Robert Barocci, President, Advertising Research Foundation

“As advertising researchers, we look at the media environment and consumer media behavior - how people use online and traditional communications – and ad effectiveness. Adjusting for quality, as Google and nearly all search engines do, adds relevance, so that consumers see ads that best match their interests – a key to effective advertising. Google and its competitors include nearly all discoverable sites in their organic results for free, they do not force advertisers to pay for exposure as paid media requires. As I’m writing, proliferating media options for consumers and advertisers, such as social media and mobile communications, are changing the search marketplace through market forces, empowering anyone to locate and share information of all types for their friends, family, colleagues and strangers, perhaps providing the most relevant search results. In our view, antitrust review and action appears unnecessary, irrelevant to consumers, and potentially stifling of innovation in media and society.” (Statement, August 23, 2011)

Joe Rosenbaum, Board Member, Interactive Advertising Bureau

“At the end of the day, if consumers aren’t harmed, if no unfair competition has occurred, if no barriers to entry exist, and if no control is exercised because of dominant position—the question we must all ask is whether the government is simply targeting each 800-pound gorilla in each decade, or whether some wrong must be set right.” (Legal Bytes Blog, June 30, 2011)

Microsoft and FairSearch: Distorting the Truth About Google and Search

2011-07-17T12:06:00.002-04:00

Microsoft and its anti-Google organization FairSearch are distorting the truth about Google and how search and search advertising works -- and making assertions without any evidence whatsoever. Here’s the truth:

Microsoft/FairSearch Claim: “A website‘s ability to compete depends largely on whether it appears on search results pages in response to users‘ queries and, more importantly, on where it appears within those results.”

Fact: We built Google search for consumers, not websites, and consumers don’t need Google to access the web. Google serves more like a GPS on the Internet highway—not an on-ramp. It helps people get around, but it’s not necessary. If someone knows where he wants to go, he can navigate to those destinations directly, whether it’s Craigslist, the New York Times websites, or icanhascheezburger.com. Search engines are popular and useful, but they’re just one of many ways to navigate the web. For example, according to Compete.com, NYTimes.com receives only 18% of its traffic from Google, while TMZ.com receives more traffic from Facebook than from Google, and Politico.com receives more traffic from the Drudge Report than Google.

Microsoft/FairSearch Claim: “As a result of its dominance in search and search advertising, Google can control where users go and what sites they find.”

Fact: Using Google is a choice, and there are lots of other choices available to you for getting information: other general-interest search engines, specialized search engines, direct navigation to websites, mobile applications, social networks, and more.

Microsoft/FairSearch Claim: “As described more fully below, consumers are misled by Google‘s manipulated search rankings and by its deceptive and preferential display of its own sites in response to users‘ queries.”

Fact: This is false. Microsoft and FairSearch provide no evidence whatsoever that consumers are misled by Google’s search results. Furthermore, Microsoft and Yahoo both show their own specialized shopping results when users enter a product query, or show their own maps when a user enters an address or local query.

Microsoft/FairSearch Claim: “Further, Google‘s exclusionary conduct denies revenue and traffic to sites that compete with Google, hindering the ability of those sites to bring more innovative online content and better services to consumers.”

Fact: This is false. Microsoft and FairSearch provide no evidence whatsoever that Google has acted to harm competitors. Google doesn’t “owe” traffic to any website, just as the Drudge Report or Huffington Post don’t “owe” links to any particular website.

Microsoft/FairSearch Claim: “Websites lose critical traffic when Google steers users to its own or preferred partners‘ sites and forecloses the visibility of rival sites.”

Fact: Microsoft and FairSearch provide no evidence whatsoever that users are misled by Google’s search results. And of course, every website would like to be at the top of Google’s results, but Google doesn’t “owe” any website a particular position.

Microsoft/FairSearch Claim: “[Website publishers] also pay Google an ever-higher percentage of the advertising revenues that their sites generate for non-search (i.e., content and display) ads served by Google.”

Fact: Website publishers don’t pay Google; rather, when Google places ads on publisher’s website, Google shares the lion’s share of the revenue with the publisher. Google disclosed in May 2010 that publishers in its AdSense program receive 51% or 68% of the revenue (depending on which program they use); those percentages have not changed.

Microsoft/FairSearch Claim: “Advertisers pay ever-higher fees to Google and have little choice but to accept Google‘s terms, such as its restrictive policies that prohibit advertisers from using their data freely on other ad platforms. Those fees are passed on to consumers in the form of higher prices.”

Fact: Google’s advertising prices are set by advertisers themselves, who bid what they’re willing to pay per click, and Google places no restrictions on advertisers moving their data moving their own ad campaign data to other platforms. Furthermore, Microsoft and FairSearch provide no evidence whatsoever that consumer pay higher prices because of Google’s policies.

Microsoft/FairSearch Claim: “Google now displays non-algorithmic results at the top or in the middle of the results page in a manner that does not clearly flag for consumers that these results are placed there artificially by Google – frequently with links to Google‘s own pages.”

Facts: These results are also delivered via algorithms, and are identical to how Bing and Yahoo show local search results. When we organize local information we organize search results around particular businesses. Local search results cluster web results in an efficient display, packing in 30-40 web links on a single results page. This makes it easier for people to scan the results page and compare businesses. In our testing we’ve found this saves users an average of two seconds to find the place they’re looking for. Our search results are good for businesses and review sites too. Google sent 27 billion clicks to local businesses in the last year alone.

Microsoft/FairSearch Claim: “The result is to induce users to click on the artificially placed links regardless of whether those links are the most relevant to the user‘s query.”

Fact: Google doesn’t “induce” any of our users to click on anything. Users click on whatever they find useful. Furthermore, Google’s results doesn’t contain any “artificially placed” content -- we provide the answers that we think users will find most useful.

Microsoft/FairSearch Claim: “[Google’s search] algorithms can be programmed, however, to exclude, penalize, or promote specific sites or whole categories of sites.”

Fact: Our algorithms attempt to serve and protect consumers by making sure they see the most relevant results. For example, a site called DecorMyEyes was ripping off its customers and believed negative reviews of its business were helping its Google rankings. We built an algorithm to ensure that businesses that are bad to their consumers aren’t rewarded in the Google results -- that’s an example of improving the search results to help consumers.

Microsoft/FairSearch Claim: “[Google’s Place Pages] enable Google to earn advertising revenues and to deprive the other website of user traffic.”

Fact: Review websites receive a tremendous amount of traffic from Google, and that traffic has consistently grown over time. As of March 2011, Google sent approximately 44 million clicks per month to Yelp; 36 million clicks per month to TripAdvisor; and 13 million clicks per month to Citysearch. Comparing February 2010 to February 2011, Yelp saw a 63% growth in referral traffic from Google, TripAdvisor a 9% year-over-year growth, and Citysearch a 5% year-over-year growth.

Microsoft/FairSearch Claim: “Google is now seeking to coerce TripAdvisor into acquiescing to this use by tying the removal of TripAdvisor content from Google Places pages to the exclusion of all TripAdvisor links from appearing in Google‘s dominant algorithmic search engine results.”

Fact: This is false. Google hasn’t sought to coerce TripAdvisor into anything. TripAdvisor, like all websites, can remove its content from the web index using the robots.txt protocol, which disallows Google from indexing the content of the page. Webmasters could also use robots.txt to disallow crawling of all their pages or particular pages. A webmaster can, for example, allow Google to crawl the primary page of information about a particular place and prevent us from crawling subsequent pages containing reviews.

Microsoft/FairSearch Claim: “Google handicaps each bidder with a quality score. The lower a quality score, the higher a price the advertiser has to bid to win the auction.”

Fact: Microsoft and FairSearch’s criticisms are hypocritical. Every search engine — Google, Yahoo and Bing — uses quality scores to ensure that consumers see relevant ads.

Microsoft/FairSearch Claim: “Google adopts policies that prevent the development of software that would enable advertisers – and small advertisers, in particular – to use and compare Google‘s prices and returns on investment with those of Google‘s competitors.”

Fact: Google has no such policies. Advertisers control their own ad campaign data, and have full ability to export their ad campaign data either through comma separated value (CSV) export, or through our AdWords Application Programming Interface (API). Advertisers can use Google AdWords Editor to export their ad account data – including ad campaigns and keywords in a common CSV format. In fact, Microsoft provides detailed instructions and videos on how advertisers can export their campaigns from Google to Bing.

Microsoft/FairSearch Claim: “Google prevents advertisers from synchronizing updates or other changes to their ad campaign data across multiple platforms. Google also imposes limits on advertisers‘ ability to port their Google AdWords data to any other ad platform using third party tools that would make the process simple or even automatic.”

Fact: This is false — Google places no limits on advertisers. Google does place some co-mingling limits on third parties who sell the AdWords API, in order to provide advertisers with similar experiences through the AdWords program. Each ad network offers different features to enable advertisers to target specific types of ads to the right audience. These features are typically not compatible with one another. In our experience, user interfaces that copy data between different ad networks create incentives for developers of those interfaces to build the lowest common denominator of the features of all ad networks, for the sake of compatibility and portability. Such a lowest common denominator approach would prevent advertisers from taking advantage of some of the unique features we have built within AdWords. Again, these restrictions only apply to third party tools, and there are no restrictions on advertisers’ direct use of the AdWords API.

Microsoft/FairSearch Claim: “As a Harvard Business School professor has stated with respect to Google‘s restrictions on advertising data portability, the 'net effect . . . is to reinforce the tendency of small to medium-sized advertisers to "single-home" – to use only Google AdWords to the exclusion of competing platforms.'”

Fact: The “Harvard Business School professor” is Ben Edelman, a paid Microsoft consultant.

Microsoft/FairSearch Claim: “In addition to government investigations, several private cases have been filed against Google under both under Federal and State law.”

Fact: As reported in 2010 by the Wall Street Journal, these lawsuits have been filed against Google by Microsoft’s antitrust law firm, Cadwalader.

Bloomberg Editorial: “Do we want the U.S. government constantly fiddling with Google’s algorithms?”

2011-07-14T12:06:00.001-04:00

Check out Bloomberg’s new editorial about the FTC investigation, arguing against “a drawn-out antitrust suit”:

The protracted rituals of antitrust, however, were built for a world in which monopolists stymied innovation, jacked up prices, stifled competition and arm-twisted customers into buying extra goods or services they didn’t need. It’s not that simple in high tech.

Google hardly acts like a classic monopolist. It innovates furiously, having made 500 refinements to its search-engine algorithms last year alone. Google gives away most of its products. Google’s easy-to-use AdWords and AdSense products have helped thousands of businesses get started. And for all its supposed market clout, Google has launched its share of flops, such as Google Health.

Read the whole thing here.

Commentators: Google Is Not Microsoft

2011-07-12T11:07:00.002-04:00

Here’s what antitrust experts, journalists and others are saying about the oft-repeated but mistaken analogy between the FTC investigation of Google and the Microsoft case of the 1990s:

Comparisons are “Plainly Ridiculous”

The Economist

“Yet even if Google has to make some concessions in the end, talk of its predicament being the same as Microsoft’s in the 1990s is plainly ridiculous. By embedding only its own web browser into its Windows operating system, Microsoft deliberately restricted users’ choice in the hope they would become addicted to its products.” (The Economist, June 30, 2011)

Glenn Manishin, Antitrust Attorney

“[U]nlike the historic AT&T and Microsoft monopolization prosecutions, which were based on plainly anti-competitive conduct taken by monopolists to squelch competition, the concerns of travel and other so-called ‘vertical’ competitors of Google is that the search giant has what they term the ‘incentive and ability’ to harm competition in the future. U.S. antitrust law, to the contrary, bases liability on actual practices, not the potential for future bad acts. Google is most definitely big, but in America big alone has never been bad, let alone illegal.” (National Law Journal, July 4, 2011)

Joshua Wright, Professor, George Mason Law School

"As an outsider I would say that obstacle is far higher for them today with Google than it was back then with Microsoft.” (The Guardian, June 23, 2011)

David Balto, Former Policy Director, Federal Trade Commission

“Google is not like Microsoft. Google's conduct today is not like Microsoft's conduct during the 1990s. The markets in which Google competes are vibrant, competitive, and rapidly evolving. Any analogy between a potential antitrust case against Google and the antitrust case against Microsoft ignores the underlying facts and is a misguided over-simplification of the complicated nature of the on-line search market.” (The Huffington Post, June 30, 2011)

Clint Boulton, eWeek

“...I and others find it hard to believe it when Gary Reback, who helped prosecute Microsoft, says this is "Microsoft redux" and that it "is almost exactly the same case." (eWeek, June 28, 2011)

Kathy Kristof, CBS MoneyWatch

“Unless there is some evidence of coercion that we’ve yet to hear, this is not the same as the 1990s Microsoft antitrust case.” (CBS BNET, June 23, 2011)

Bianca Bosker, Technology Editor, Huffington Post

“Yet some experts counter that the nature of the technology involved makes it difficult to compare Microsoft's antitrust lawsuit and the FTC's reported investigation into Google.” (The Huffington Post, June 23, 2011)

No Lock In

David Balto, Former Policy Director, Federal Trade Commission

“Additionally, unlike Microsoft's operating system product, whatever power this 65% share confers to Google is moot because search consumers face zero switching costs! You can't have monopoly power if it is costless to switch to an alternative...Consumers have choices that are mere keystrokes away. Bing, Yahoo!, Ask.com all have measurable share of the core search market and there are also a number of niche search sites such as WebMD, Kayak, and Wikipedia. Unlike the cost of buying and installing a new operating system, users need only type "bing.com" into their browser's address bar to use a different search engine.” (The Huffington Post, June 30, 2011)

Robert Cyran and Jeffrey Goldfarb, Reuters Breakingviews

“In essence, Microsoft had a true monopoly, abused its position and government intervention was the only immediate cure. Google’s situation is more complex. The firm claims only about two-thirds of the search market in the United States. Rivals also accuse Google of putting its services first. For example, its own maps might turn up in search results. But customers can easily use other search engines or type in a Web site address directly, and search doesn’t appear to be a utility in need of regulation.” (Reuters, June 30, 2011)

Glenn Manishin, Antitrust Attorney

“The only thing that keeps Internet users returning to Google — which unlike AT&T or Microsoft has no technological means to lock consumers into its site or services — is running faster than its competitors. Antitrust law should intervene in that race only if Google acts to trip a competitor — if it cheats.” (National Law Journal, July 4, 2011)

The Economist

“Google is also addictive, but in the way that chocolate is, not in the way that cigarettes are. People love Googling, but they can easily give it up.” (The Economist, June 30, 2011)

Clint Boulton, eWeek

“Fairly or not, DOJ Vs. Microsoft set the standard for modern high-tech cases. Except in this case I would argue Google had the foresight long ago to architect its business so that consumers are not locked in to anyone software platform (as people were with Windows) or browser (as people were with Internet Explorer).” (eWeek, June 28, 2011)

Herb Hovenkamp, University of Iowa law professor

"There's no lock-in with a Google search engine. If you want to have six different search engines all on your desktop, you can do that. It's all free. That's a very different situation than Microsoft was in. ... It was very hard to escape from the Microsoft operating system, but here the escape costs are zero." (The Huffington Post, June 24, 2011)

Kathy Kristof, CBS MoneyWatch

“For those who don’t remember, back in the late 1990s, when you got a computer loaded with a Windows operating system, it was “bundled” with Microsoft’s Internet Explorer browser. Microsoft strong-armed its vendors into making it difficult for consumers to get access to the then-leading browser, Netscape Navigator, as a way of driving Netscape out of the business and unfairly capturing a dominant market position, according to the antitrust case...Google, which now offers its own browser called Chrome, clearly does not pressure anyone to use either its browser nor its search engine when we access the web from our homes and offices. When I open up the Chrome web browser, it’s just as easy to get to Microsoft’s search engine, Bing, as it is to get to Google.” (CBS BNET, June 23, 2011)

Bianca Bosker, Technology Editor, Huffington Post

“In the 1990s, there were few alternatives to Microsoft's Windows operating system -- rival computer and software manufacturer Apple, for example, was near bankruptcy in 1997 -- and disconnecting from the Microsoft ecosystem was costly, time intensive and complicated, requiring companies to overhaul systems and retrain personnel. By contrast, users can stop using Google's search engine at any time. Switching is free, requires simply typing a different web address into a browser and requires essentially no new skills.” (The Huffington Post, June 23, 2011)

Services are Free

David Balto, Former Policy Director, Federal Trade Commission

“For consumers Google's services are almost completely free. Indeed, it is the fact that the services are free that Google search has transformed the nature of retail competition. Contrast this to the Microsoft case where the cost of Windows 95 was $200 retail and $100 for an upgrade. Consumers' pocketbooks do not see Google as any type of monopolist.” (The Huffington Post, June 30, 2011)

No Harm to Consumers

Thomas M. Lenard, President, Technology Policy Institute & Paul H. Rubin, Economics Professor, Emory University

“With Google, there is the threshold question of whether the company has actually violated the antitrust laws. While the FTC may know things we don't, there is thus far no evidence in the public domain that Google is guilty of violations similar to those of which Microsoft was convicted a dozen years ago. (Forbes, June 28, 2011)

Geoffrey Manne, Antitrust Professor, Lewis & Clark Law School & Joshua Wright, Antitrust Professor, George Mason University Law School

“The focus of any antitrust inquiry must always be on consumer harm--not harm to certain competitors. We are skeptical that any such harm can be proven here. Google today is not the Microsoft of 1998, and even if it were, subsequent history has demonstrated that consumers are better served by letting rapid technological change play out in digital markets than by heavy-handed antitrust remedies.” (Tech Freedom, June 24, 2011)

David Balto, Former Policy Director, Federal Trade Commission

“There is a fundamental difference between the evidence of anticompetitive harm in Microsoft and Google's alleged exclusionary conduct. In Microsoft, there was a mountain of evidence that Microsoft's conduct led to significant rivals being severely handicapped and excluded. In Google's case, there are merely anecdotal and speculative claims of exclusion and harm, mostly offered by those with an affiliation to Google's competitors.” (The Huffington Post, June 30, 2011)

What Consumers and Internet Users are Saying About the FTC Investigation of Google

2011-07-12T11:05:00.000-04:00

Consumers Choose Google

@Stephenie816 I CHOOSE to Google #theresnogunbeingheldtomyhead RT @google: Supporting choice, ensuring economic opportunity:goo.gl/HJM1J 6/24/11

@joelinux117 @google should not have to be the subject of an antitrust lawsuit... it's your choice to use Gmail/Maps/Voice/etc, and it's free 6/24/11

Technology Logs: “Yes, users have the choice, and majority of them chose Google simply because they always find the information that they want.”

“Google Responds To FTC Inquiry: “Using Google Is A Choice,” TechCrunch, 6/24/11

@rafaelbran That's why we love you so much @google, because we've chose to. :) 6/24/11

@cyrowski @google I'm a #Googler by #Choice! #FTC, should I use #AltaVista instead? bit.ly/knML1O 6/24/11

haikued2m: “Folks, Google is used more as a search engine because it is better, by far, than the rest. I have 4 search options that I use, but the best by far is Google. And ‘they didn't bring anything new to the technology’...ok..smart guy...why didn't someone else develop a google capability and form a hugely successful company. Get real.”

“Google confirms FTC probe: Translating what the company really means,” ZDNet, 6/24/11

DCMetroGuy: “Google is where they are .... because they provide a good service. They are fairly non-intrusive with their products, and work pretty much on an opt in model. Alot of companies slide things onto peoples computers when you go to their website, You do not necessarily know they are putting things on your computer. Google products and add-ons usually have several notices anytime they are updating or changing anything on your computer. They got to where they are by providing products and informationn people want and CHOOSE to use. Yes they are huge, but it is because people have chosen to use them.”

“Google Confirms FTC Antitrust Investigation,” Huffington Post, 6/24/11

nimbus2020 2020: I have been using Google from since beginning. If I had felt at any time that the results are intentionally tempered, I would not have been using such a service. Have they made mistakes, surely yes (remember things like buzz etc), but are they anti-competitive and dishonest, I will be shocked if that is proven.

“FTC probe could be hard, costly battle for Google,” ComputerWorld, 6/24/2011

Nirvana-bound: "’The other possibility is that Google’s search engine is more popular because it is better.’ BINGO! Who in their cotton-picking minds can deny that? As for the controversy facing them, I call it a storm in their 'search engine' cup. Will pass over. More power to unfettered Googling!!”

“Google's enemies: The search giant’s antitrust headache gets bigger,” The Economist, 6/30/11

On the FTC’s Review

Sean Flaim: [...] there has been no specific articulation of any reason for the investigation other than Google is a large company who may have market power, which I don't think is a foregone conclusion. Inevitably such fishing expeditions will be sure to find some evidence of "guilt" for Google playing hardball here or there, but without proving damage to consumers, of what use is that?

Using antitrust law to effect a form of ex-ante regulation on Google's conduct seems precisely backwards to the primary goals of antitrust law.

“The FTC makes its Google investigation official, now what?” Tech Liberation Front, 6/24/11

@MatthewWhatley I really hope the #FTC doesn't destroy #Google after this anti-trust investigation. Why ruin a good product to let other worse products in? 6/25/11

bluelinerci: How is it that the FTC investigates Google...a company that is really only guilty of being successful. They have plenty of competition and Internet companies can fall faster than any traditional company...Yet, Ticketmaster is unfettered with their monopolistic ways?

“Google To Antitrust Enforcers: What's Up?,” TPM, 6/24/11

Bob: “FTC is going to look mighty funny when they find out, after they pull their heads out from their arse that google is used by choice and not out of compulsion by end-users. Sheer waste of tax payer money.”

“GOOGLE: Yes, We’re Under Investigation, But we Don’t Know Why,” Business Insider, 6/24/11

@egpierro FTC going after @Google #lawsuit seriously?! more waste of tax money... aren't we a free market economy after all? #survivalofthefittest 6/24/11

ChristopherIstvan: “Our countries businesses suffer more and more to the hands of our countries politics. Google offers great services and help many web developers, search engine marketers, small, medium and large companies advertise services and products. People need to make a stand on this issue!”

“FTC launches investigation of Google,” Los Angeles Times, 6/24/2011

@ronito_cruz #FTC launching antitrust inquiry against @google. Two wireless companies running the market and regional telecom monopolies apparently ok. 6/24/11

coolrepublica: “Yeah that investigation puzzle me as well. If Google can be investigated for doing things to their site to keep them in business than it means that the Apple antitrust investigation is not too far behind. But this is has Microsoft's hand all over it.”

“GOOGLE: Yes, We’re Under Investigation, But we Don’t Know Why,” Business Insider, 6/24/11

Linux Geek: “The unholy alliance of M$, Apple & Co. + corrupt government officials are fighting against Google and free market principles. Google, unlike M$ or Apple brought real innovation in US and created millions of jobs and business opportunities.”

“Google confirms FTC probe: Translating what the company really means,” ZDNet, 6/24/11

@Dubai_CEOs Am I the only one that thinks the anti-trust allegations against @google are rediculous? Keep doing what you do. And do it harder 6/24/11

whoshooter: “For all you anti-Google folks, I have a question about your "monopoly concerns"....How much money has Google EVER asked you to pay using their search engine, maps, or Youtube? HOW MUCH - Zero. That is where the FTC is wasting their time. MSN's antitrust case was valid - not this one.”

“Google Confirms FTC Antitrust Investigation,” Huffington Post, 6/24/11

DTree: “Indeed, some of these "competitors" would be better of spending money on creating *better* websites rather than on litigation. Google algorithms reward good websites with top search rankings... it is is a purely objective form of measurement. These plaintiffs need to wake up and start spending their resources in the right places. “Google Confirms FTC Antitrust Investigation,” Huffington Post, 6/24/11

@remtonar It seems nonsensical 2 accuse @Google of market manipulation; most of its services are free. 2 c a real monopsony look at @Apple. 6/24/11

Douglas Gawtry: I will never understand this anti-trust mentality of our government. You don't have to search with google, you don't have to own an android phone,.... So why would the company get in trouble for some sort of monopoly? There is plenty of competition for everything google does. Leave them alone and spend my tax dollars on something more worthwhile.

“Google Confirms FTC Investigation; Will States Launch Inquiries, Too?,” PCMag, 6/24/11

CForest: Another reason Google is facing anti-trust attention is that it is starting to encroach on Microsoft’s $22B Office suite monopoly. We have already used syncdocs.com to move all our Office and Sharepoint data to Google Docs cloud. Many others will follow. You can bet Microsoft’s lobbyists will be working hard in Washington...

“Google's enemies: The search giant’s antitrust headache gets bigger,” The Economist, 6/30/11

Big Isn’t Bad

m2skd:“Consumers benefiting from google search is not allowed apparently.”

“Google Responds To FTC Inquiry: “Using Google Is A Choice,” TechCrunch, 6/24/11

gwailo247: “Google doesn't spend millions/billions to acquire companies because they suck. They usually buy companies because they are good investments, and they then usually put money into making them better. Same with Microsoft and (at least in the old days) with Yahoo.”

“Google says trustbuster concerns are 'unclear',” CNet, 6/24/11

@TheDudeDiogenes I generally distrust companies, but I trust @Google more than I trust our government. 6/24/11

willyampz: “A business is especially obligated to be out for itself first - and society benefits in the form of jobs. Where things go wrong is when a company or individual enriches themselves AT THE EXPENSE of society. In my opinion, I see Google as being one of the more ethical companies, and gives back so much for free. Of course, they CAN do that because they are ad-supported.”

“Google confirms FTC probe: Translating what the company really means,” ZDNet, 6/24/11