The Effects of Technology

Googles, Monopolies, and the Internet

It has been suggested that Google is abusing it's "silent monopoly" of ad-words . Ok, back up. All of these claims need to be substantiated and explained. So let's give it the old inductive reasoning workout (as all good conspiracies require) and see what we think. Does Google illegaly utilize it's high traffic search engine to give itself a competitive edge in other fields?

Google and a monopoly.
So Google has a monopoly on the search market, eh? I think we are forgetting another competitor, who also strives to capture talent and innovation, and who also try to make money. A monopoly has to be a clear-cut, enforceable title. So what has Google done that would substantiate claims of monopolistic behavior? Do they:

-dominate the market?
Not really, there is still very heavy competition from other companies, such as Yahoo! and MSN. So to say that Google controls the market is simply skewed, and only looks at the fact that they have the most successful advertising business.

-abuse their position to gain edge in other fields?
This is a somewhat valid point. Should Google have the top ad spot for their own secondary products (services other than web search) over their competition. For instance, from the Slashdot article:

Google holds the top advertisement (Adword) slot for the following key words: intranet, spreadsheet, documents, calendar, word processor, email, video, instant messenger, blog, photo sharing, online groups, maps, start page, restaurants, dining, and books.

While none of these are Google's primary service, they still give themselves the top stop in advertising. Some would say this is an unfair use of Google's market share giving them competitive advantage over other companies in fields not directly related to searching. Tragically for these arguers, there is one fatal flaw in this argument. A monopoly has nothing to do with market share. Just because Google gets a large chunk of internet searches (here are some comparative stats, which you will notice Google is ahead in all of them) does not make them monopolistic. Competitors still exist. Anyone can choose which search engine to use, and if another search engine comes out with something that tops Google's searching capabilities, they very well maybe beat Google out. It remains a highly competitive market. Therefore, I say these claims become insubstantial.

-violate laws?
Here's where things get confusing. As Google provides more and more services, should they be able to give themselves the top ad spot regardless of how much their competition pays? Unfortunately, things are going to remain fuzzy here. The deal is Google is providing a superior product. That is why this is becoming an issue. If their search function sucked, no one would care if they had the top ad-spot. However, now that everyone sees Google's success, everyone wants a piece of the pie. Personally, I would hate to see Google forced to give everyone an equal spot because, frankly, Larry and Sergey made that spot exist, so why should someone who hasn't made that possible benefit from its existence? Of course, Anti-Trust laws, if they ever do become applicable, will say differently. But it is my belief that if someone has worked hard to achieve something, they shall be the reapers of that success.

So should Google be accused of abusing their search traffic to leverage competition in other markets? Absolutely not. There is little evidence to support the theory of Google as a monopoly. Additionally, until Google begins flagrantly abusing its position, there is little that anyone would be inclined to do to change the situation. Why fix what isn't broken? So as it stands, Google will continue to provide a superior product and enjoy the fruits of it's own labor. Case closed.