The building blocks of Google's market power/search dominance

The NY Times unearthed a fascinating and extremely important piece of antitrust-relevant information in its great article today: "Firefox and the anxiety of growing pains." 

  • The NYT obviously wrote the article because it exposes a comical and ironic juxtaposition of an Open Source company like Mozilla, which is passionate about transparency, having cut a secret and lucrative royalty deal with Google, which is passionate about the "secrecy of its arrangement and agreements."

However, why this article is such a gem and is so important, is that it provides missing link evidence of why Google has become such a dominant search engine so fast, and why that domination is destined to increase. 

Microsoft-Aquantive increases Google-Doubleclick antitrust focus

I believe Microsoft's purchase of Aquantive will have the effect of increasing antitrust scrutiny of Google-DoubleClick.

  • Listen to this quote in today's Investor's Business daily in an article by Patrick Seitz "In ads, Microsoft chooses a $6 Bil Buy-in":
    • "Microsoft believes consolidation in the ad sector will continue and that there ultimately will be only two meaningful companies in online advertising, says Matt Rossoff, an analyst at independent research firm Directions on Microsoft."

Let me count the ways that quote gives antitrust authorities the willies:

  • First it is their job to not allow industries to become duopolies or acquire market power through acquisition. If that occurs naturally, it is not a problem, but "acquiring" market power is illegal.
  • Second, Microsoft, an expert in market power, is reportedly the one that sees this market trending to two players.
  • Third, to the extent that most all of the business model of the Internet is being driven by the advertising model and Google's spectacular success at that model, Microsoft is indicating that the Internet business is destined to be controlled by two entities that the Government allowed to consolidate.

I can hear the Antitrust authorities sharpening their pencils and flexing their mouse clicking fingers now.

Broadband mapping is a transparent pro-regulation policy scheme

I personally think the Markey proposal to spend $36 million for a "national broadband map" is a monumental waste of taxpayer money and really bad "policy".

  • We don't have even a "national" broadband problem, we have more broadband facilities based competition and investment than any nation in the world.
  • We may have a rural broadband lag, and if a map is needed at all it could only be justified for rural areas and it would only cost a fraction of the $36m.
  • If Chairman Markey proposed a rural broadband map I would be much more muted in my criticism.

However, there is a not so hidden agenda lurking here.

  • A "national" broadband map is a transparent political scheme to re-define the issue so pro-regulation and pro-net neutrality proponents can define away "competition" and current policy success with a stroke of a pen.
  • If they can define away satellite and the 5 national wireless providers as broadband competitors, they can smugly say "I told you so" broadband is really a monopoly/duopoly and declare  competition policy a failure!
  • Then they could have a policy basis for mandating net regulation, subsidies and net neutrality!

The reason they want a national broadband policy is that they want a one-size-fits-all national policy like net neutrality which ensures everyone gets the same broadband service regardless of different needs, wants or means.

  • These "nationalized" regulation visionaries, then can create a role for Big government programs where there is none now.

It still amazes me how Chairman Markey and his fellow Big Government/net neutrality proponents can not see that competition and not regulating the Internet has been a fabulous, albeit imperfect success for the United States.

Broadband mapping is trojan horse for Big Govt. net regulation

Calls by House Telecom Chairman Ed Markey and other Big Government proponents for better "broadband mapping" is simply a "trojan horse" for regulating the Internet. and more government intervention in the marketplace. 

Mr. Markey knows that calling for better data is generally an easy way to build consensus around an issue while staying "under the radar."

  • He also knows that he can skew the process to his policy liking by rigging how the new "map" is supposed to be drawn.

Make no mistake about it, this is Chairman Markey's first step in a grander scheme to have Big government play a much bigger role in the Internet and the digital economy. 

Dismantling Google's reasons why NN should not apply to them

I was able to ask the only question from the audience of the Educause net neutrality panel today.

  • After introducing myself and disclosing that NetCompetition.org is funded by broadband companies, I asked Rick Whit of Google the following very important questions:
    • "If non-discrimination is an important principle of the Internet, why should it not apply to all Internet access technologies in a neutral way?
    • And why shouldn't net neutrality apply to all internet access technologies that have the potential to block content like:
      • Microsoft's ~90% share of the browser market; or
      • Google's 65% share of the search market in the US and Google's 75% market share in Europe? 

Mr. Whit's first weak line of defense was that the term is really "network" neutrality implying it was not about "Internet" neutrality.

  • Oops! Seems Mr. Whit is so new to Google that he hasn't had the time to read Google's very own brief: 
    •  "Guide to Net Neutrality for Google Users

      "Net neutrality" is an issue that will shape the future of the Internet.

      What is Net Neutrality?

      Network neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet. The Internet has operated according to this neutrality principle since its earliest days."

My takeaways from the Educause net neutrality panel

I attended the Educause conference panel today because they made a big deal about how they were going to launch a new white paper with a new compromise on net neutrality that would be "more reasonable."

  • When I arrived and asked about the availablity of the new net neutrality white paper, I was disappointed when informed it was "delayed indefinitely."
  • Seems like this white paper is in the same purgatory of indecision, and "keystone kops-ville",  that the relaunch of the online giant coalition is, the former ItsOurNet coalition which is reportedly now the "Open Net Coalition".
  • Seems like the net neutrality movement is going through a whole lot of handwringing about what to do next.
    • It kind of reminds me of when a barking dog finally catches the passing car. Now what to do?

I was also amused that Educause, this academic oriented forum, did not even attempt to present a balanced panel that represented both points of view on net neutrality.

Outstanding FTTH council video on Net Neutrality/Internet Exaflood

I just rewatched the outstanding Fiber to the Home Council's video on the Internet Exaflood.

  • I blogged about it before and will probably blog about it again in the future, because it is the best single five minute explanation, for novices and experts, of how the Internet is changing and improving.

If SaveTheInternet and FreePress was truly interested in a free and open debate on net neutrality they would want to send this outstanding informational video out to their email blast list.

Frontline's Hundt thinks US wireless is too monopolized!

I was shaking my head in disbelief when I read Comm Daily on Reed Hundt's interview on CSPAN's The Communicators series. 

Key quotes:

  • "Hundt is vice chmn. of Frontline Wireless and he used his C-span appearance to challenge the FCC to set rules that will allow Frontline to carry out its business plan."
  • "The wireless industry, which largely grew from auctions held while Hundt was Chairman, has become too consolidated, he said: "Monopolies don't work that hard to compete." Competition is necessary for innovation."

Excuse me? wireless monopolies?

Google sells out Thai free speech just like they sold out Chinese

The New York Times reported that "Google has agreed to block four video clips on its YouTube Web site that the Government of Thailand said insulted its king."  

  • The end of the NYT article explains that the military coup leaders in Thailand "have also used the strict laws about the monarchy to stifle criticism of themselves or their actions."

This is not the first time that Google, which waxes eloquently about how net neutrality is needed to promote free speech, has hypocritically stabbed free speech in the back for its own expedience.

Uh oh for Google trademark case goes to jury trial ...facts hurt

Reuters reports that "a federal judge ordered Google to face a jury trial in a trademark infringement suit that aims at the main source of the company's revenue."

  • The Federal judge previously had denied Google's motion to dismiss this case.

Why does this matter?

  • Google does not want to go to trial on any of the legion of IP theft lawsuits they face... because they fear discovery by clever trial attorneys who will try to get access to executive emails that will show that use of other companies intellectual property for free is standard business practice at Google.
  • Google also fears that they can't buy off everyone, because if one company, like American Blind and Wallpaper Factory, does not succumb to Google's settlement bribes to make the case go away...
    • it will embolden other companies, whose IP has been violated by serial IP thief Google... to come out of the woodwork to testify or file class action suits against Google.

I also discovered a new and relevant fact in my ongoing research -- that I believe will be used succesfully against Google in this case.

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Q&A One Pager Debunking Net Neutrality Myths