Google Plays Dodgeball

July 10th, 2009 | Sources: Washington Post

Subjects: ,

Three times in the recent past, the Feds have fired fastballs at Google in the form of antitrust reviews. And they have very little to show for it.

First, the Feds gave a look-see at Google’s pending book-scanning settlement — a deal aimed at protecting book publishers which the Feds ardently believe have been rendered an endangered species by the search giant.

Then, government officials questioned the overlapping board membership involving the Google and another somewhat popular company, Apple.

wouldn'tharmaflyMost recently, they’ve questioned why Google and other normally business-aggressive tech companies suddenly get all Shirley Temple-like when it comes to snapping up each other’s prized employees.

All the attention has turned Dana Wagner, a former antitrust lawyer at the DOJ who joined Google last year, into a veritable spokesperson for the company. Wagner has been talking up public officials, academics and reporters pretty much non-stop in an attempt to quiet the storm. 

After highlighting the company’s foundation and “don’t be evil” corporate philosophy, Wagner’s mantra is that his company actually owns a 2.66% share of the advertising market.

Say what?

Wagner insists Google’s market is not search advertising, where it owns a 70% market share, but the entire advertising arena which includes everything from highway billboards to Oxyclean pitchmen. 

“We need to move past intuitive market definitions and actually look at how consumers, advertisers and publishers are shifting their spending,” Wagner told the Washington Post. “Market definition is job one, and hopefully people aren’t bringing too many preconceived notions to that.”

Never mind that Google maintains a 30% operating margin, which is all but impossible if the playing field were actually level. Or that when old friend Microsoft tried a similar tactic in the 1990s, the strategy was dismissed as disingenuous.

Google, of course, could just say nothing. There’s no law against puttin’ a whuppin’ on business competitors after all. That’s been the case ever since the Supremes ruled in favor of Aluminum Corporation of America in a case brought by the Feds 64 years ago.

shinealightonmeThe court held back then that in certain circumstances a company may indeed dominate a market using “superior skill, foresight, and industry.”

That’s pretty what we’ve done so deal with it, Google could say.

But the straight-up approach, Wagner knows, would invite the Feds to keep the Klieg lights on the Googleplex until the cows come home. Such is life at the top these days.


 

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