
What An Antitrust Case Against Google Might Look Like - vaksel
http://www.techcrunch.com/2009/03/01/what-an-antitrust-case-against-google-might-look-like/
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timf
" _abusing its monopoly position by overcharging corporations for access to
consumers_ "

I guess I don't understand the problem here. If you advertise with Google you
aren't barred from advertising elsewhere. This is like saying the Superbowl is
abusing its popularity by charging high prices for ads. There are plenty of
other places to buy advertising on the internet.

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mixmax
The American antitrust law (as I understand it, I'm not a lawyer) allows you
to create and have a monopoly. What's illegal is using your monopoly in one
market to muscle your way into another. The classical case is Microsoft having
a monopoly on operating systems, and abusing that to dominate the browser
market.

As I see the argument made by the author he is saying that Google has a
monopoly on search, and that they are using that monopoly to dominate the
advertising market.

~~~
timf
" _he is saying that Google has a monopoly on search, and that they are using
that monopoly to dominate the advertising market_ "

That's also what I thought he meant. The problem is that search isn't a
market. They dominate the search based advertising market because they
dominate search (which is not a market in and of itself, it's free content
that gets eyeballs like a TV show).

And in my opinion at least they are great at their ad distribution business
(where the ads go on other people's sites) because of their high value brand,
not from some sinister tactic they are able to inflict because of their
dominant search engine.

~~~
alyx
It is interesting to me when people say that "search is not a market". So
pardon my ignorance but if search isn't a market, why (in the case of
antitrust clauses against Microsoft) are browsers a market?

Can somebody explain what constitutes a market?

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scottdw2
Given that Eric Schmidt was, only about 2 weeks ago, actively campaigning in
favor of The President's stimulus package I find it highly unlikely that the
US Justice Department will be going after Google. This could change if Google
does something egregious, or there are significant changes in the 2010 mid
term elections. However, I don't find it likely.

Also, I think it more likely that companies would pursue action in EU courts
rather than US courts, because the EU courts have been more receptive to this
type of thing.

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mattmaroon
I wish TechCrunch had more content like this. Then we really wouldn't need the
New York Times.

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vaksel
I think we'll see more and more Guest Posts with quality content in the
future. To me at least, it looks like Arrington is setting up the company for
a future sale, and since right now Techcrunch=Arrington, he has to distance
himself from writing. So that leaves a lot of free space that they need to
fill up.

~~~
mattmaroon
What makes you say they're gearing up to flip?

~~~
vaksel
Companies tend to avoid things that rely heavily on one "superstar", by
stepping out of the limelight, Arrington is making Techcrunch stand on its own

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dpatru
It strikes me as extremely ironic that the government, an organization which
uses force to fund massively wasteful, unaccountable bureaucracies, should be
concerned that Google, a organization which does not charge most of its users,
is gouging consumers.

~~~
anatoli
> a organization which does not charge most of its users

But the problem is, they are gouging (some of) their customers. It's just not
the end users, it's the businesses.

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jhickner
_"Google is abusing its monopoly position by overcharging corporations for
access to consumers."_

Aren't google adwords basically bought at auction? I don't see how you could
accuse google of overcharging.

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gojomo
And when the DOJ is done with Google, Facebook will get similar scrutiny.

~~~
gasull
From the article: _Google is earning enough from sponsored search to subsidize
almost all of other businesses, including gmail, Google Office, Latitude,
gDrive, and others._

I don't think Facebook is subsidizing other businesses with its profit.
Actually it doesn't have any profit yet.

~~~
gojomo
It will take years for the DOJ to be done with Google. Give Facebook some
time!

I agree with Facebook board member Marc Andreesen's assessment: Facebook could
be profitable and make over a billion in annual revenue whenever they choose.
Instead, they're forgoing that for bigger riches -- and even more entrenched
market power -- down the road. Facebook understands the game they're playing.

Facebook users face higher switching costs than Google search users. And
individual features in Facebook -- photo sharing, status streams, comment
threads, group utilities, invitations/RSVPs, instant-messaging, etc. --
already compete against multiple other companies.

When Facebook turns on their revenue spigot -- whatever it turns out to be --
they will look a lot like Google, in the same ways the article highlights.
They will be subsidizing a bunch of free services, to the detriment of
potential competitors, to defend their master proprietary asset -- the social
graph plus a critical mass of users -- and the massive revenue that flows from
it.

~~~
ericwaller
I'm curious, do you know when Andreessen said that? Because two years ago I
would've believed it, but now I just don't buy it.

Beacon was supposed to be their adsense and look how that turned out. I don't
doubt facebook's potential, but I do doubt that there's a switch that they're
just waiting for some magic user count to flip.

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gojomo
_...when Andreesen said that?_

About 10 days ago, in the Charlie Rose interview. TechCrunch has a transcript:

[http://www.techcrunch.com/2009/02/20/andreessen-on-
charlie-r...](http://www.techcrunch.com/2009/02/20/andreessen-on-charlie-rose-
i-am-creating-a-fund-full-video/)

~~~
ericwaller
Thanks for that.

According to Alexa, Yahoo gets a little less than twice Facebook's traffic.
Yahoo's revenue for 2008 was $7.22B. So yeah, $1B+ for Facebook from
conventional ads is probably reasonable.

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johnbender
Microsoft enjoys something like 90% market share on the desktop, and they're
worried about Google's 70(ish)%.

