Magazine article Information Today

The Challenge of Being Google

Magazine article Information Today

The Challenge of Being Google

Article excerpt

It must be challenging to be Google these days. On one hand, it is a huge and very successful company. In barely 15 years, Google has gone from a tech startup founded by a couple of graduate students to being one of the most dominant forces in the information industry. Its market capitalization is more than a quarter of a trillion (that's "T" as in trillion) dollars, making it bigger than tech-pioneer Microsoft. Google is ranked No. 73 on the 2012 Fortune 500, as measured by its annual revenue, amid long-established names including DuPont, Deere, and Philip Morris International.

In its core search business, Google commands a 67% market share for search engine use in the U.S. and around the world, according to a recent survey. It has also expanded its technology portfolio well beyond its original search engine services to develop widely used products and services such as the Android smartphone platform, as well as consumer apps and services that include Gmail, Google Earth, Picasa, Google Translate, and the Google Chrome web browser. The company plays a role in content creation and hosting information services such as Google Scholar and the Google Books project, along with its ownership of YouTube. Purchasing Motorola Mobility, LLC and developing the Chromebook computer have also brought Google into the hardware business. Finally, it has also been moving into enterprise- and cloud-computing arenas through its Google Apps services and Google Search Appliance.

'Don't Be Evil'

Yet not a week goes by without a headline appearing in the media about legal complaints, investigations, or settlements of investigations against Google. For a company that started with the motto, "Don't be evil," Google seems to be making a lot of people mad.

Google's most recent annual report indicated that more than 87% of its annual gross revenue (about $43 billion of just a bit more than $50 billion in total revenues) comes from the sale of advertising on its search and other platforms. (This is actually down from recent years when about 97% of its revenue came from advertising.) The company relies heavily on advertising and has been very aggressive about expanding not only the amount and placement of its advertising, but its sophistication as well. Sophistication is involved in Google's ability to relate targeted advertising in response to searches, emails, and various other services.

Complaints and Advertising

It is this connection between advertising (and advertisers) and Google's services that drives many of the complaints and investigations against Google. Chief among the complaints and resulting investigations is that Google favors companies that advertise with it through premium placement in the search results and through favorable (and, allegedly, restrictive) advertising contracts. Google also developed or obtained its own content, and as that happened, similar complaints arose that the company presented search results that favored its own content over competing content. While favoring yourself or your customer over competitors and noncustomers is not necessarily unlawful, when it is done with deceptive intent, or in a way that restricts competition, it may violate antitrust laws.

On Jan. 3, 2013, the Federal Trade Commission (FTC) closed an investigation of Google's search practices, finding that Google's Universal Search was not illegal (see news breaks.infotoday.com/NewsBreaks/ Google-Reaches-Settlements-WithFTC-Over-Search-Patent-Practices-87097. asp). …

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