
Should Google be broken up into baby Googs? - abennett
http://www.itworld.com/internet/105282/should-google-be-broken-several-companies
======
mdasen
I'd have to say no. Google has been supportive of open technologies and
interoperability rather than walling themselves off and keeping customers
locked in.

Don't like Gmail? Have your Gmail address forward to another address or access
your Gmail account via IMAP or POP.

Search has no lock-in other than being better than the competition.

Consider this: Google's video search returns results from YouTube _AND_ other
video sites. Since when does a company do that? Does eBay return results from
other auction sites? Hell no! That would give people the opportunity to use
whatever service they wanted and ruin the eBay monopoly. Does Facebook allow
you to chat with people on other XMPP services or friend people from other
services? Hell no! That would ruin their walled garden.

Google has been championing a lack of lock-in. Without lock-in, a monopoly
isn't exercising its power. Google could have made Google Talk like Facebook,
AIM, Yahoo, and MSN and not made it inter-operable. They chose open. They
consistently choose open.

Even one of the complaints - that Google favors its own services in search
results - isn't true. Try looking up a stock. Most of the time Yahoo Finance
comes in first (<http://www.google.com/search?q=goog>). Sure, they have the
nice little summary there, but Yahoo Finance is the first regular result and
they even have links in their special summary to Yahoo, MSN, CNN and others.

Now, Google does purchase ads for their services, but it is a real purchase.
Let's say I search for "shopping" and they decide to display an ad for Google
products rather than displaying another ad bought for that keyword. They lose
that money. Therefore, they're bidding at least equal to the price that the
other advertiser would have paid.

Heck, search for "shopping" and up comes Shopping.com first, Overstock second,
and Google Products third.

Search for "search" and Google is _SIXTH_! It's Bing, search.com, Yahoo,
Dogpile, and AltaVista before them.

Google has been championing the open web. I'm not always comfortable with
their policies or decisions. However, they have not been exercising monopoly
power.

~~~
DannoHung
How do they lose the money? I... what? Do they donate it to a charity or
something?

~~~
mdasen
As I said, they lose the money because that ad space isn't being sold to a
paying party.

Let's say you own a baseball stadium and a bar. You decide that you want to
put an ad for your bar in the baseball stadium - it will drive business to
your bar where you'll make money. Let's say that it drives $1,000 worth of
business to your bar every day. That's hard to measure, but assume you can
measure it. Someone comes along and says that they'll pay you $10,000 per day
to put an ad for their competing bar in that spot. You calculate that that ad
isn't worth $10,000/day to you - even taking into consideration natural
business to your bar which might now be drawn to a competitor. So, your bar
loses the $1,000 per day that the ad drives there plus you determine that
you'd lose another $5,000 per day from business that would naturally go to
your bar, but is now driven to your competitor. You'll sell them the ad. Why
would you sell them the ad? Because you make money.

If you decide to keep your own ad, you have to justify $10,000/day in expense.
It drives $1,000 in business and a competitor's ad would lose you $5,000 in
business for a total of $6,000. It doesn't make business sense.

In order to want to keep your own ad in that space, you have to believe that
you're gaining more than you would by accepting cash from your competitor. In
this scenario, you aren't - you'd be losing $4,000 per day. But if you
determine that the ad drives $11,000 worth of business to your bar, then you'd
be willing to "pay" that $10,000 for the ad. So, your bar pays your baseball
stadium $10,000 per day for the ad and the profits of the bar go up even with
that expense. However, if the bar becomes less profitable "paying" for that
ad, it's better to sell it to the competitor.

When another department of the same logically-owned company does something for
another department, it isn't free. If Google's search gives Gmail a freebie
ad, search is losing money. So, the gain in money for Gmail must be greater
than the amount that search is losing by not selling that ad to a competitor.
Therefore, from an internal accounting perspective, it makes sense for Gmail
to bid on the "email" keyword just like everyone else as part of their
marketing budget. If they're the top bidder, they get the spot. If they
aren't, they don't.

~~~
DannoHung
Why wouldn't they just make the ad area one spot longer when they put up one
of their ads?

~~~
mdasen
If you're going to be showing another ad, you could show another ad from
another company. So, you're still losing that money if you decide to put your
own ad there.

------
pavs
This is so stupid in so many levels.

One of the reasons "Bell System" was broken up in to smaller companies because
they had overwhelming majority on a technology and they were using their
monopoly and power in preventing any real competition in that market.

Google doesn't share the same type of monopoly Bell system did and there's a
lot of players in the search and advertising market. As a matter of fact
anyone with little cash and a good idea can enter this market anytime they
want and Google can't stop them from doing it.

This is also true for Gmail, ad-sense or any product Google has.

MSFT has a bigger market share in Personal computer OS than Google in any
market it operates and Microsoft actively conspires against any other company
trying to enter their market. They did it with Apple and Linux for as long as
I can remember.

Google has done more good for the internet and online-technology and they are
the single largest contributer to open-source software than any other company
in the world. Why the FUCK would you want to break them up?

There are genuine concerns about privacy, but Google doesn't tie anyone down
and they don't hold any monopoly. You can stop using their service anytime you
want and there are some very good alternatives out there.

------
byoung2
It wouldn't be as easy as breaking up Ma Bell into regional carriers vs long
distance because the internet doesn't follow geographical boundaries. It could
make sense in some respects to split Google into different companies based on
verticals like search, email, apps, mobile, advertising, payments, and
enterprise, but even then there aren't clear divisions.

Would Gmail, as a separate company, have to license Google Search technology
for inbox searches? And register as an AdSense publisher?

How would Google Search broker a deal to be the primary search engine on
Android phones produced by Google Mobile? And would Google Checkout be able to
integrate with the app store?

~~~
theBobMcCormick
That might be problematic. I was under the impression that most of those
"verticals" don't actually make a profit. Adsense is the primary revenue
engine for the whole company.

More importantly, it seems a little pre-mature to talk about anti-trust action
against Google when they _are_ facing pretty robust competition for pretty
much every one of those verticals.

~~~
agentultra
It's just frustrating that they're constantly entering every vertical.

They don't completely dominate and eliminate the competition (in most areas),
but they are building an impressive portfolio of acquisitions.

Probably not an anti-trust case... but it's going to be something. And we'll
figure out the laws and legislations necessary to regulate it when it happens.
Until then I will remain shamelessly paranoid of the company.

~~~
yanw
What's wrong with it entering 'every vertical'? If they have something to
offer it's only good for consumers as they introduce choice by adding a new
player to that vertical, it's still a free market. Paranoia alone isn't a
solid ground for antitrust allegations.

------
ryandvm
It seems to me that Google has been much more responsible with their power
than other tech titans like Microsoft and Apple (of late). Apple is doing
things with iTunes/iP.d/iPhone that would have made Microsoft blush.

Besides, what are you going to break Google into? One profitable advertising
company and 30 loss leaders?

------
techiferous
It seems too early to me. I know that Google is the leader in several spaces,
but I can think of alternatives. If I don't like Gmail, there are other email
providers. If I don't like Google search, there's DuckDuckGo! ;) I always
thought problems began when a company became a monopoly and there was no real
choice (kind of like Windows some years back). Am I wrong?

------
acg
Gary Reback has recently been involved in the Open Book Alliance, I wonder
whether this is part of a larger negotiation that is going on over book
rights.

------
kp212
I've been thinking maybe it should be due to its control of advertising, but
like the first post its too soon right now. Lets see how the next "boom" cycle
in advertising plays out. That being said, I feel if any company should be
broken up into baby G's right now it would be Goldman Sachs. I think that
would be a great message to the rest of the financial industry.

~~~
patio11
Google's total stranglehold on effective online advertising for firms with
less than $100k to spend is an annoyance to me -- I wish they had some
competition.

Google having total, unchallenged dominance of navigation on the Internet:
that is a threat. You could swipe the URL bar from all browsers tomorrow and
most people wouldn't even notice. Turn off Google for five minutes and the
Internet _stops_. Google's ability to do that to individual sites,
selectively, at their sole and unchallengeable discretion, has me go from
disquieted to terrified some days.

~~~
RyanMcGreal
Google isn't actively blocking other advertising companies from competing;
they're just the winner in a winner-take-all market.

Similarly, Google dominates internet search but doesn't block other companies
from offering competing products.

Interestingly, a Google search for 'search engine' does not return Google
itself in the top ten results:

<http://www.google.ca/search?q=search+engine>

------
bbuffone
Break it up into what? Google has lots of projects but they have a limited
product (money making things) portfolio. I don't think many their products
would be viable as seperate units.

The privacy policy that people don't like is easy to solve, don't use it.
Except for search, there are many other viable products in each space.

------
MikeCapone
I wrote something about this a little while ago:

[http://michaelgr.com/2010/02/15/why-google-is-not-like-
micro...](http://michaelgr.com/2010/02/15/why-google-is-not-like-microsoft-or-
facebook/)

It's about how Google has different incentives than companies like Microsoft
and Facebook; in short, they have incentives to make their customers happy
because for most of their products there's very little friction that keeps
users from switching, while others have incentives to create more lock in and
bigger walls to keep people from switching. Making customers happy because
kind of secondary after you've reached a certain mass with this business
model.

------
ZeroGravitas
You can read Microsoft's take on why Google are a worrying monopoly here:

[http://microsoftontheissues.com/cs/blogs/mscorp/archive/2010...](http://microsoftontheissues.com/cs/blogs/mscorp/archive/2010/02/26/competition-
authorities-and-search.aspx)

~~~
pavs
More reasons why I hate MSFT. Lying, unimaginative, opportunistic, unoriginal
scum of a company.

------
jswinghammer
Anti-trust is a farce used by politicians against political enemies. No market
monopolies exist at all. The only way they are even possible is with
government intervention in a market. If you never want to use Microsoft
software again that's your choice. If you don't want to use Google that's your
choice too. Technology is probably the only example of a free market out there
right now and I'd like to keep it that way.

The specter of break-ups plagued the car industry and made them very
bureaucratic and now we're paying the price for that. I'd hate to see that
happen in technology.

~~~
pavs
Market monopoly exists. Monopoly doesn't mean sole player in the market,
Monopoly means overwhelming share AND control on the market with little to no
competition.

Google doesn't have control or overwhelming share in any market they operate.
They have large share in some of the markets.

Some good examples of monopoly in market: Monsanto, Microsoft, De Beers,
Ticketmaster.

------
yanw
Antitrust lawsuit again Google while the Comcast/NBCU merger goes through?!
what bizzaro fucked up scenario is this. If you want to leave Google just put
another URL in your browser's address bar and export your data through DLF.

Regarding the search results if you don't agree use another search engine,
when looking for someone on Facebook you don't get their MySpace profile also
you can't 'socialize' with them unless you have an FB profile, these
allegations are ridiculous and probably propelled by other corporation with
vested interests.

Google lobbies for net-neutrality for fucks sake, they're not the devil!

