DOJ vs. Google: Will it happen? Unlikely - as government would lose
There's a potential anti-trust fight looming on the horizon. The target: Google. It's a mega-sized company that many are beginning to become leery of. Already many are beginning to wonder just how much bigger Google can get without microscopic scrutiny by the U.S. Department of Justice. Google's market capitalization is now hovering around 188 Billion U.S. dollars ($589.35/share - as of Dec 10th, 2009), 6thlargest market cap in the U.S. behind (in ranking order) Exxon, Microsoft, Wal-Mart, Apple and JP Morgan.
Google is already on the DOJ's radar screen with its book scanning deal with publishers around the world. The German government is reviewing its options carefully before signing off on the project. DOJ will be satisfied so long as there is no creation of a monopoly of the data or publishing rights being violated.
Google dominates in two primary categories, Internet Search and Advertising revenue. Google and affiliates rank #1 in all 4 primary internet spaces that Nielsen ratings track.
Top 10 Global Web Parent Companies, Home & Work
October 2009
| Rank | Parent | Unique Audience (000) | Active Reach % | Time Per Person (HH:MM:SS) |
| 1 | 353,880 | 83.75 | 2:52:53 | |
| 2 | Microsoft | 317,671 | 75.18 | 3:13:13 |
| 3 | Yahoo! | 237,342 | 56.17 | 2:20:27 |
| 4 | 199,961 | 47.33 | 5:47:04 | |
| 5 | eBay | 159,424 | 37.73 | 1:51:02 |
| 6 | Wikimedia Foundation | 147,584 | 34.93 | 0:15:36 |
| 7 | AOL LLC | 134,635 | 31.86 | 2:22:51 |
| 8 | News Corp. Online | 120,681 | 28.56 | 1:07:49 |
| 9 | Amazon | 117,255 | 27.75 | 0:24:16 |
| 10 | InterActiveCorp | 114,749 | 27.16 | 0:12:48 |
Top 10 U.S. Web Parent Companies, Home & Work
October 2009
| Rank | Parent | Unique Audience (000) | Active Reach % | Time Per Person (HH:MM:SS) |
| 1 | 156,635 | 79.66 | 2:34:50 | |
| 2 | Microsoft | 138,773 | 70.57 | 2:06:16 |
| 3 | Yahoo! | 134,745 | 68.52 | 3:06:11 |
| 4 | 107,482 | 54.66 | 6:09:48 | |
| 5 | AOL LLC | 91,205 | 46.38 | 2:30:32 |
| 6 | News Corp. Online | 79,817 | 40.59 | 1:28:46 |
| 7 | InterActiveCorp | 71,310 | 36.26 | 0:16:52 |
| 8 | eBay | 66,191 | 33.66 | 1:25:29 |
| 9 | Amazon | 63,372 | 32.23 | 0:26:11 |
| 10 | Wikimedia Foundation | 62,084 | 31.57 | 0:17:07 |
Top 10 U.S. Online Video Brands, Home & Work
October 2009
| Rank | Brand | Total Streams (000) | Unique Viewers (000) |
| 1 | YouTube | 6,632,964 | 105,923 |
| 2 | Hulu | 632,662 | 13,472 |
| 3 | 217,765 | 31,594 | |
| 4 | MSN/WindowsLive/Bing | 183,556 | 17,301 |
| 5 | Yahoo! | 173,482 | 24,265 |
| 6 | Fox Interactive Media | 160,698 | 13,142 |
| 7 | ABC Television | 136,348 | 5,642 |
| 8 | Turner Sports and Entertainment Digital Network | 119,850 | 5,741 |
| 9 | ESPN Digital Network | 109,799 | 8,625 |
| 10 | CBS Entertainment Network | 103,741 | 6,973 |
Top 10 U.S. Search Providers, Home & Work
October 2009
| Rank | Provider | Searches (000) | Share of Searches |
| - | All Search | 10,218,842 | 100.0% |
| 1 | Google Search | 6,759,395 | 66.1% |
| 2 | Yahoo! Search | 1,574,891 | 15.4% |
| 3 | MSN/Windows Live/Bing Search | 986,747 | 9.7% |
| 4 | AOL Search | 310,178 | 3.0% |
| 5 | Ask.com Search | 176,744 | 1.7% |
| 6 | My Web Search Search | 101,436 | 1.0% |
| 7 | Comcast Search | 51,995 | 0.5% |
| 8 | NexTag Search | 35,088 | 0.3% |
| 9 | BizRate Search | 30,690 | 0.3% |
| 10 | Yellow Pages Search | 30,422 | 0.3% |
Google is on track for approximately 24 Billion dollars in gross revenues, 65+ percent of those being generated by website advertising links. The entire television broadcasting industry doesn't bring that sum of revenue. Little wonder why Microsoft wants to edge into this space as Yahoo's erosion in this space continues.
As Google continues to expand into new opportunities and applications it has not deviated away from its core business and continues innovative marketing solutions available to companies to advertise their products. Google is starting to see some pressure from advertising positions available to marketing departments. Microsoft has placed a bet and bought a significant share of Facebook at an opportune time. With Facebook now surpassing the 350 Million subscriber market, it becomes a valuable property in which to advertise inside of. Facebook’s revenues, which the company does not disclose but which could reach $500 million this year, are still dwarfed by those of Google. It would appear that they will have a ways to go before catching up - if at all, particularly when compared to Google's advertising Goliath-sized presence.
That creates concern among many: Is Google simply getting to big? What government options are there to have some kind of oversight?
Anti-trust is not a possibility within the advertising industry, at least not right now. DOJ is not about to tell marketers where they have to spend their money and that they can't do business with the #1 search engine company in the world. It would be impossible to 'break up' the company using this argument.
It can't regulate what Google charges for advertising either since there is no competitor trying to lock in what it costs to generate revenue with them and set prices. The only chance DOJ would have is if Google made exclusive deals for advertising space with specific companies and not allow others into that area. From their perspective that would be dumb move to even contemplate let alone do, after all why would they want to?
Google will have to be careful with respects to its content group such as the e-Book project and others. Google's foray into publishing such as scholar.google.com will be under the microscope. Since Google does not charge for access to the content, it's likely DOJ would have a difficult time creating a case and it's close to a final settlement with publishers on E-Books. Google's general practice is ensuring that everything it does avoids the appearance and practice of exclusion.
Google's new application development in wireless, collaboration tools and other software applications are open source and thus there's no smoking gun for oversight in those spaces either. Google's strategy and tactics seem well positioned to weather any government interference and there's little anyone can do about it.
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