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May 11, 2009

Google's Competition is One Click Away

You might remember the strange incident from January that made Google's search results pages almost unusable for 30 minutes by flagging all the search results as malware. The incident is now Google's favorite example to show that its search engine is not a monopoly and competition is one click away: Yahoo's search volume has doubled before Google fixed the error.


A study from 2008 showed that 55% of the US Internet users have more than one regularly used search engine.


The two slides are from a Google presentation titled "Google, Competition and Openness" [PDF], obtained by Consumer Watchdog, an organization which claims that it managed to debunk Google's affirmations.

7 comments:

  1. They can rest easy that is for sure. This is the thing that keeps Google by not getting complacent.

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  2. One major point of Consumer Watchdog's rebuttal was that competition for advertisers is the monopoly that matters. One could argue that there is a network effect such that the more consumers using Google's search engine, the more powerful their advertising network, and therefore search engine user switching could break their advertising monopoly. But Google cannot make that argument in the context of this presentation because they have another slide stating that they benefit from no network effects. The rebuttal slide deck is a great read.

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  3. @Ted:

    "Network effects. This refers to a phenomenon where the amount that people are willing to pay for a service depends on the number of people that have already adopted a service. The classic example is a fax machine: the amount that I am willing to pay for a fax machine depends on how many of my correspondents already have one. But this doesn't fit the Google case either: my decision to use Google is irrelevant to other users. It's true that advertisers want to advertise where there are lot of users but that doesn't affect the amount that they are willing to pay on a per user basis. The value of a user to an advertiser depends on how likely he or she is to buy, not how many users there are."

    (Google Blog, Hal Varian, 2/25/2008)

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  4. Just for background, Google's been pretty public about this particular presentation. They've been briefing press, academics, advertising agencies, Congressional aides, and others, for example. They shared a copy of the original presentation, which I posted in my coverage of the story last week:

    http://news.cnet.com/8301-13578_3-10236007-38.html

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  5. In Spain Google has a 99% web search market share :-P

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  6. @Stephen: Your point is only somewhat valid. Google rushed out this presentation only after the consumer group got it's hands on the presentation and leaked it - the original and the marked up version.

    Sure, it's nice for Google to claim on their blog that they wanted the world to see what their lobbying effort was all about - in the spirit of "openness". But they really had no choice. The presentation (and the rebuttal) had already leaked.

    They shouldn't be criticized for that necessarily (the annotated version of their presentation is legitimately critical enough), but I doubt that the Google lobbying slides would have ever seen the light of day had they not already been leaked.

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  7. This is the same Consumer Watchdog that got a $100,000 grant from the Rose Foundation to do nothing but criticize Google, right? The same Consumer Watchdog who employs a guy who said this:

    http://online.wsj.com/article/BT-CO-20090515-717028.html

    Simpson defended the use of hearsay to make public allegations, arguing that it was appropriate for an advocate. "I don't see any obligation in particular to call up the other guy and get his side of the story," he said, adding, "We don't lie, but we put out the facts we think are interesting."


    Great .... get back to me when someone with credibility is saying these things.

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