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Google's dominance grows: Part III countdown to 50% share antitrust dominance

The evidence continues to pile up that Google is well on its way to achieving a 50% share of the search market, a significant antitrust threshold where a company is considered "dominant" and subject to "stricter scrutiny" for potential anti-competitive practices.

  • Google's ~50% market share is highly relevant to the Net neutrality issue because:
    • Search is now the leading Internet access technology, and
    • Google's national and international scale and market share dwarf the potential gatekeeper role of any U.S. broadband player.

Microsoft's recent earnings call showed how badly Microsoft is doing in search.

  • One sentence from Chris Liddell, CFO of Microsoft captures it:
    • "We still expect to get revenue per search equal to where we were a year ago by the end of this year."
  • Huh? They hope to be as good as they were a year ago a year from now? Sounds like they are implying they have fallen a couple of years further behind Google.  

My previous blog about Yahoo explained how they were falling behind Google.

However, what's most interesting is what Google said in its most recent earnings call. Founders Larry Page and Sergy Brin and CEO Eric Schmidt explained that they are making great strides with their "partnerships."

  • What they euphemistically call "partnerships" is buying distribution or extending market reach through vertical integration or bundling. Not a big deal to antitrust when you have a competitive market and less than 30% market share but a problem when you have a "dominant" share of 50-90+%. 
    • The YouTube acquisition gives Google-YouTube 57% of the video sharing market segment.
    • They are investing in audio distribution relationships, and in deals with newspapers and with books.
    • They have ~65% share of the international search market.  
  • Page also explained that they continue to invest in: response time, size of index, document update frequency, complexity of algorithm, and sophistication of algorithm.
    • All of this will enable Google to handle more queries faster than #2 Yahoo and #3Microsoft.
    • Both the Yahoo and Microsoft earnings calls made it clear that both Yahoo and Microsoft are still trying to catch up to where Google was a couple of years ago.
    • Google's lead is widening and will continue to for the forseeable future.
      • The only question in my mind is, will that share slow down at 70%? 80%? or 90% share of the search market?
  • We should think about running an informal pool to guess when the, the media ownership folks behind the SaveTheInternet, wake up and figure out they have been sleeping with and giving comfort to the biggest media concentration enemy they have ever seen.
    • Right now, I guess they've got this Stockholm syndrome thing going on....