Google vs. Microsoft: Just a 'PR Stunt'
Quick background: In April, Google sent a 50-page white paper to the US Department of Justice asserting that Microsoft was violating its 2002 antitrust settlement by not allowing outside desktop search engines (such as Google's own Desktop Search application) to be installed in Windows Vista. Microsoft initially denied the claims, saying that users could indeed use Google's application instead of their own, if not very easily, and assistant attorney general Thomas O. Barnett sided with the Redmond camp, writing a letter to state attorneys asking them to drop their investigations.
Then last week Microsoft agreed to make changes to the search application in Vista that would make it easier for consumers to install an outside default desktop search program. Google, however, wasn't impressed. Monday, the search giant appealed directly to a federal judge saying that Microsoft had not done enough to mitigate their concerns.
Jonathan Zuck, president of the Association of Competitive Technology, called the intervention by Google a "PR stunt" (though as the Financial Times notes, his group generally sides with Microsoft), and I tend to agree. The Justice Department had already reviewed and dismissed Google's complaint, and Microsoft had agreed to make concessions in an attempt to appease Google.
I don't have a Vista machine or an OS X machine in my house to check (I have 5 computers that run Windows XP -- not very helpful in this situation), but I chatted with a couple of friends who use Apple computers and they told me that OS X works essentially the same way: Apple's Spotlight search is installed by default and can be changed if the user desires. I'm not an antitrust expert, but it seems to me that if a practice is considered anticompetitive, then no company would be allowed to utilize it. Since Google's CEO Eric Schmidt sits on Apple's board, not naming them in the complaint to the Department of Justice makes the whole thing feel a bit disingenuous to me.
Further, as Search Engine Land pointed out in May, users of Dell computers who mistype URLs (i.e., http://microsoft without the .com) are being redirected to pages laden with Google ads, as a result of a deal between the two companies. Search Engine Land's Danny Sullivan argues that this practice makes Google appear hypocritical, especially given that the pages are served via a piece of software that is not clearly named and difficult to uninstall (removing the Google Toolbar that comes pre-installed apparently will not stop them).
Microsoft is not immune to the antitrust accusation bug either. In April, they urged the US government to investigate Google's planned acquisition of online ad giant DoubleClick on antitrust grounds (the US Federal Trade Commission will be investigating). They argued that DoubleClick would give Google an unfair competitive advantage in the ad market. While I think both accusations, at least initially, have merit -- the government should investigate anything that could potentially be anticompetitive -- I also think they make each company look a bit petty. Especially Google, who has persisted after the government essentially dismissed their complaint, by taking the unorthodox step of appealing directly to the federal judge charged with keeping tabs on Microsoft.
What do you think? Is Google's antitrust complaint justified or just a PR stunt? How about Microsoft's? Leave your thoughts in the comments below.
Update: I want to issue a retraction for part of my post above. While I still feel the ultimate conclusion that the actions of each company feel petty to a consumer like myself, I was wrong regarding one part of my post. The great thing about writing a blog is that if you make a mistake, your readers always make sure you know about it.
After speaking with a pair of law school professors (one from the University of Chicago and another from the University of Wisconsin), and to Jonathan Zuck, of the Association of Competitive Technology, who was mentioned above, I think I have a somewhat better grasp on antitrust law. I was under the mistaken impression that if a practice was deemed anticompetitive (such as bundling software that was hard to replace and limiting consumer choice), it would be disallowed regardless of market share. However, the current set of competition laws in the US apparently greatly rely on the market power of a company before they kick in. Further, Microsoft has to additionally abide by the settlement from their earlier antitrust case in 2001.
So my notion that Google appeared to be side-stepping an identical issue with Apple while targeting Microsoft, was wrong, at least insofar as the law is concerned. I think ultimately I tend to take issue with the laws on the books. I find it somewhat discouraging that smaller companies may be able to utilize business tactics that are generally considered to be harmful to the consumer (such as, for example, blocking third party applications in favor of their own) due to their smaller market size. But I also want to thank our readers for keeping me honest.
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That's a good perspective on the whole situationJosh. I think Google is just being the spoled brat in this whole matter, especially since they weren't even a Plaintiff in the ruling. They were just feeding the States information to help get the ruling they desired, then when it didn't get the ruling it wanted, decided to jump in after the fact to try and get it's way.
My following of the whole thing can be found at http://geekinparadise.com/2007/06/25/google-vs-microsoft-desktop-search-round-2/
Cheers!
Posted by: James | June 26, 2007 2:27 AM
Google isnt really being a spoiled brat - they are protecting themselves for the future when Microsoft will turn on websearch from the Start menu. Imagine when Vista is 70-80% market share and hundreds of millions of people, if not billions, are conducting desktop searches - Microsoft would be able to significantly drive up its search market share.
Posted by: Jamie | June 26, 2007 2:46 AM
The big fight, here as elsewhere, is between Google and Microsoft, over who can produce the coolest 2D and 3D global mapping platforms.
Posted by: Sam Adam | June 26, 2007 2:46 AM
Geez, you *really* don't know much about anti-trust law do you? This:
"Apple's Spotlight search is installed by default and can be changed if the user desires. I'm not an antitrust expert, but it seems to me that if a practice is considered anticompetitive, then no company would be allowed to utilize it."
is inane. A primary purpose of anti-trust law is to prevent the abuse of other companies (and individuals) by one company that has a dominant share of the market.
Microsoft has already been deemed by the courts to be a monopoly under anti-trust law. Which means they have limitations on their actions, designed to prevent abuse of non-monopolies in the the same space, that the non-monopolies do not have. E.g. not using their OS dominance to force a particular browser or media player -- or desktop search solution -- on consumers. Simply put, Apple is not a monopoly, so it does not have such restrictions.
Posted by: Greg | June 26, 2007 3:06 AM
Josh,
Vista has indeed problems with Google Desktop. I've tested it personally and I do believe MS are intentionally altering Google software's performance under Vista. There is a visible degradation of speed of searches as well as inexplicable crashes.
Posted by: Milko D. Georgiev | June 26, 2007 4:04 AM
I liked the old Google. The current google is just too corporate. There's nothing wrong of course to churn out more money, but don't advertise your company "do no evil" because they sometimes indeed "done a little evil"
@Milko: There's a big possibilities that Google Desktop interfer with some of Vista's command set. There's nothing that a new release couldn't mend.
Posted by: Oskar Syahbana | June 26, 2007 4:21 AM
I liked the old Google. The current google is just too corporate. There's nothing wrong of course to churn out more money, but don't advertise your company "do no evil" because they sometimes indeed "done a little evil"
@Milko: There's a big possibilities that Google Desktop interfer with some of Vista's command set. There's nothing that a new release couldn't mend.
Posted by: Oskar Syahbana | June 26, 2007 4:21 AM
Google Desktop is not only Desktop Search. It is a deskbar with gadgets. At first the product was named Google Desktop Search, then the "search" word was removed. So how could be deskbar compete with desktop search?
Posted by: TanNg | June 26, 2007 5:28 AM
I understand that the back and forth between Microsoft and Google may seem petty now, but Google is protecting its long term interests. Microsoft could chop Google's search dominance off at the knees with Vista's new desktop search capabilities. Regardless of which search is better or more accurate, the vast majority of Microsoft users are not going to switch to another product because what is built into Vista is convenient, regardless of what is better. This is how Internet Explorer got such a huge market share. At the time there may have been browsers of equal or better quality, but it didn't matter because the average Windows user never got further than the Internet Explorer icon on their Desktop. Right now it may be hard to wrap your brain around Microsoft bagging the search title, but as time progresses and more people move to Vista (whether they are upgrade users or new users who get stuck with it when they buy new hardware), the impact on Google would be profound if users were defaulting to Vista's search simply because it was already present.
I don't know who gave you the idea to throw Apple's Spotlight into the mix in this article, but obviously you did not consider market share, and you may need to revisit the definition of a Monopoly. Even though Apple is gaining market share at an impressive rate, it's still a drop in the bucket compared to the amount of Windows users out there. Furthermore, Microsoft still owns the Desktop in most large corporations. Apple's OS X would have to edge out Windows in the number of Desktops that it is installed on before it got into the Monopoly ballpark. As long as Apple doesn't start selling OS X independent of their hardware, I doubt that it would ever be in danger of being called a monopoly.
Posted by: Elise | June 26, 2007 5:36 AM
@#4 and #9:
As I said, I am not an antitrust expert, but the text of the Sherman Act prohibits anyone who "shall monopolize, or attempt to monopolize." It seems reasonable to me to assume that if a practice is deemed anticompetitive (i.e., would lead to a unlawful monopoly position), then it could not be utilized by any business.
I don't find it a jump to think that if the US DoJ decided that Microsoft's implementation of their desktop search was anticompetitive and limited consumer choice, then Apple's implementation (if it is indeed the same) would also be prohibited. If something is an attempt at monopoly and violated the Sherman act as a result, than market size should have no bearing, as far as I can tell.
If anyone out there is an antitrust lawyer you can feel free to correct me, but the way I read the law, that word "attempt" makes a world of difference.
Anyway, my point was that claiming Microsoft is anticompetitive for doing something that essentially your closest partner does seems disingenuous.
Posted by: Josh Catone | June 26, 2007 9:21 AM
You need to think about these things in terms of big politics, marketing and free PR. Then most of these things start making much better sense.
Posted by: Zip Drugs legal discount online pharmacy | June 26, 2007 9:38 AM
What Google should do instead of bickering about Microsoft's hold on the desktop is to create their own OS. Sure, this is harder than crying foul about Microsoft. Google is shady when it comes to the no evil bull crap.
2 years ago I inadvertently clicked on a search result. walla, $4.54 for 1 click. Feeling bad, I emailed Google adsense support explaining them what happened. Support replies with a polite email saying that I be careful and not do this again. They did not heed my request to refund the advertiser. I got paid. The advertiser lost $4.54.
Ethics my ass. No one can questions Google's integrity. Because we for the most part tolerate wrong doings from people in authority far more than that little guy, who would be deemed a scammer all over the blogosphere and scamonline websites.
If you are smart, you will know that Microsoft will be long standing on the Internet horizon and Google will be marginalized to a has been.
Keep this post for the record books. Google like San Francisco may be on firm ground, but it is also standing on the fault zone and the advertising boom quake will occur sooner than later.
There are plenty of viable search engines ready to take over Google. Who will rule your desktop in 10 years?
We all know he answer!
Posted by: Chris | June 26, 2007 10:08 AM
@Milko -
I am not a lawyer, but as far as I've seen, Google makes no claims that Vista interferes with GDS. Any crashes you experience or slowness are likely the result of GDS' poor quality (on any OS). Either that, or a problem with your machine itself. There's certainly nothing in Vista that is "targetting" GDS.
The complaint around performance seems to be this:
1) Google wants to be able to turn off the Windows Search indexer, as having two indexers running is definitely going to reduce performance.
2) Google is complaining that by disabling the Windows Search service, the user experiences reduced functionality in the OS.
In my opinion, it's a pretty ridiculous claim. They want to turn off a system component without losing functionality that relies on that system component.
Further, there are well documented APIs for managed Windows Search, including the ability for a program like GDS to remove locations (like, say, your hard drive) from the indexing scope. Doing so would be preferrable for the user (versus disabling the service outright) because it allows applications that depend on the Windows Search service, like Outlook 2007, OneNote, and others to function normally... without any disk contention issues or performance degredation.
However, that doesn't make for an attention-grabbing headline. Nor does it let them manipulate the courts to gain an unfair advantage over their primary competitor. "PR Stunt" is one way to put it, "stall tactics" and "abuse of the justice system" are others.
Posted by: Brandon | June 26, 2007 10:26 AM
Reading further, I found this from the US assistant attorney general in 1999 (Joel Klein):
Given that, it would seem that it would be okay for a smaller market share company to engage in practices found anticompetitive for its large market share competitors. Proving "market power" has, it appears, become more important in recent years. Though that seems absurd, to me.
On the other hand, in Eastman Kodak vs. ITS, Kodak had just 20-23% of their market (photocopiers) but I believe they were found to have used anticompetitive tactics. (Also, this was in the late 80s - early 90s).
It still does not seem unreasonable to me that anticompetitive business practices would be forbidden for use by any company. (I don't believe small market share companies are allowed to engage in price fixing, for example.)
The purpose of antitrust laws are to (from the DoJ) "prohibit business practices that unreasonably deprive consumers of the benefits of competition, resulting in higher prices for inferior products and services." It would seem that blocking consumer choice on any level might fall under that definition, regardless of market share.
Posted by: Josh Catone | June 26, 2007 10:36 AM
That might seem fair in this situation, but applied broadly, it'd cripple entire markets. Software's a good example. If you were to apply those restrictions to all companies, every piece of software would have to be built in such a way that every operation can be enabled or disabled, and every piece of functionality can be modularly replaced without code changes by a competitor's product. Every little bit of the application would need to run as some type of service so that other running applications can communicate with that running application in order to replace functionality with their own.
Doing any less could deprive consumers of the benefits of competition, should a competitor ever arise for some feature of your product. Not building like that from the start would mean being forced to re-release the product ("Windows N") with the new interoperability so that the competitor can replace the feature. It'd be a mess; nobody could ever code that way.
Posted by: Dan Grossman | June 26, 2007 2:02 PM
Please see the updated post above. Thanks, everyone.
Posted by: Josh Catone | June 26, 2007 8:20 PM
Nice article
Posted by: Robin Wauters | June 27, 2007 1:34 AM
Believe me, this whole Google vs. Yahoo thing will be nothing but a side show compared to what Microsoft is going to do.
http://www.versuri32.com
Posted by: Yokathama Verusli | June 27, 2007 4:28 AM
Aside from the legal issues, to the bigger picture, I'm pretty confident that 30 years from now, Google will not exist, and Microsoft still will. Google is a one-hit wonder, and everything they do relies on online ad sales. Take away their #1 advantage in search advertising, and they won't be getting the exclusive deals with big sites, won't be able to fund all their projects and research, and will eventually end up as all the previous #1 search engines have.
Search itself is a bad market to build a company this big around. Nobody wants to search. You go online to buy something, to find people, to research.. you don't go online with the goal of reading lists of links. That's just how you get there today, and it won't be how you get there in 10 years. There's no reason Google has to be the one to find the better way to do what we want to do with our computers. Microsoft, or some other company entirely, has a better chance of that since they're not so focused on improving their list of links. At MS, it's just one tiny branch of a much bigger business constantly looking to improve how people use technology.
Posted by: Dan Grossman | June 27, 2007 11:02 AM
Dan, frankly speaking I have the strong feeling you sound little partial on Google's fate. Expecting Google to disappear because search will is like saying that IBM had to disappear, because no one uses printing machines anymore. Google has an enormous creative potential on disruptive business models. Microsoft has demonstrated several times its incapacity on understanding some key global trends - such as Internet & browsing, then on search engines.
However, I'm little concerned on something different - the most appealing aspect of Google has always been their slogan "do no evil" (prima non nocere - lat.). Unfortunately, when business went big they quickly forgot their roots. Nevertheless, like in politics, having just one superpower make the world a less secure place.
Posted by: Milko D. Georgiev | July 5, 2007 5:30 AM
Hurray..!
We had a very long chat on this thread. Around 100 replies for these with different views.
But finally no conclusions made....!
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Posted by: Sanghala | July 10, 2007 3:24 AM
I personally do not understand how Microsoft became, and remained, so popular. The OS and applications they develop are lousy! The only time I ever used Windows was in college, when I had to, because that was all they had at the time. Since then, I have used nothing but Macs, at work and at home and I will never use a PC again, if I can help it.
I believe that Google will keep a competitive edge simply because the people who run the company are sharp and very good at what they do. They are also customer driven, not "competitor threat" driven like MS.
If Google united with Apple and took over the market, the world would be a better place, but the only way Apple would be able to do that is if they opened up and sold their OS software separately from the hardware, which seems to be something they are unwilling to do ...
Posted by: Melissa | July 11, 2007 12:09 PM