Wednesday, 6 May 2009

Why Is Google Trying To Be Nice?

Google has been in the press a lot lately after its spat with content providers like newspapers and then there was the launch of Streetview in the UK which did not go entirely to plan. So why is Google launching a 'charm offensive'? Is there something we should know?

When You're No. 1 There's Only Way To Go

It's pretty typical that when a company gets to No. 1 in it's market everyone wants to take a swipe at them. Just as when Microsoft first got there, people have started to get irked by Google's market dominance. There is, for example, an ongoing lawsuit over its efforts to digitise millions of books - a tentative settlement has been reached with cheesed off authors and publishers but anti-trust has raised its head and asked whether Google is able to profit from the arrangement.

Angry authors are not the only irate people. Advertisers are up in arms as they feel they have no bargaining power because Google controls over 70% of the search ad space. Lately there has been a case in New York which complains Google used its market position to destroy competition from rival search providers. It seems like Microsoft all over again - what happened to those squeaky clean nice guys who started this all? Where has the 'Coolness' gone in Google? Does every market leader HAVE to become big and nasty and the object of hate and suspicion?

Nasty By Default

It's a fact that when you're market leader, everything you do in order to maintain that position will in some way affect the competition. It's human and business nature for small players to try to get a share of the market and grow and they have to fight hard often to get some chips in the game. The problem arises though when market leaders become virtual monopolies. At that point, they effectively own the market and, if unrestricted, can dictate terms for all others while locking out new players by changing the rules. Microsoft has become a master of this and over the years it has seen off would-be new companies by bundling in alternative products into their operating system or by buying them out.

What Google has seen is the obvious result of making it big - regulators are ganging up on them and trying to question all that they do. Some of this is over-sensitivity to certain things while other concerns are very genuine. If I were an author struggling to get published and the only way was to use Google, then I can see that I might get a few bob but the lionshare by a mile would go to Google as they have the power to grab eyeballs.

And no matter what anyone says if you don't pay you don't get seen. Just this morning I checked on my website's traffic figures. I have the basic Google traffic package which is nothing and my ranking is 1 out of 10. It has been so for nearly 3 years. The ranking is based on the number of back links into the site. In the last year, I know for a fact that there have been over 500 new back links added on various sites linking to my website, yet the ranking has not moved one iota. You can find me on search if you look carefully, I have this blog which is linked to the site but it makes not a jot of difference.

Thankfully, I am not uptight about it but when I 'Google' other companies in my business it always irks me that the adverts seem to coincide with the 'Naturals' - the common inference is that you rise up the 'Naturals' if you pay. This makes sense - the more you pay for adverts, the greater the traffic to your website and then you will rise up the 'Naturals'. But after 3 years and umpteen thousands of hits and all those back links to my website, I have not moved at all.

Funny that.

Regulators On The March

Google got stymied on an ad tie up with Yahoo! last November. Streetview was taken down in the UK for a few days after complaints about invasion of privacy. There was even a feint rumour that the US Administration should break up Google for the good of the internet but I don't think there was any truth in that. To some extent, Google is a victim of its own success. It can't fund its competitors but it wants to grow. Almost anything it will do will be on a grand scale and almost certainly invoke criticism from one regulator or another.

Google Fights Back

Google has opted to fight back using 'charm'. It has an internal mantra of 'Don't be evil' but sometimes it's so hard not to ruin the business of a competitor because you want your piece of the action and when you control the whole search arena it is not just a piece, it's pretty much all the cake.

So the PR engine is in motion. Company executives are talking to advertisers, reporters, academics, and lawmakers to explain why, even though it's a virtual monopoly, it should be loved not feared. The problem is, as we know with companies like Microsoft, the more they try to charm you, the more you begin to suspect they are up to something nasty.

Google believe that Microsoft did not do much of a job on their charm offensive as they mishandled complaints around 10 years ago. In the big case of abuse of power surrounding Microsoft's browser there was, at one point, talk of authorities breaking up Microsoft as it did not seem to handle the complaints seriously enough. Google thinks it has learnt from this and feels it needs to pay attention and lobby those who are making such policy decisions. 'Have them on your side and there will never be an issue on break ups.'

Google is attempting to 'explain itself better' in the wake of criticism. It's just as well as, in February, a small search company called TradeComet launched a suit against Google. TradeComet, which relies on selling keywords to trigger adverts, purchased thousands of words from Google in order to drive traffic (oh, haven't we all tried that - to get anywhere it costs millions). But, it is claimed, when Google realised that TradeComet was a threat, by spooky coincidence the same keywords shot up in price. You might think that if a word becomes more popular then that makes sense and you would be right - but the price increase was tenfold. Inevitably, within a few months, TradeComet's monthly traffic declined by a staggering 90% and they lost $millions in revenue. It was Netscape all over again. Google's response was that they did not 'Think there was merit in TradeComet's claim'. Ouch.


Google's attempts to digitise millions of books is at the heart of a copyright issue. Someone writes the words, Google profits. You might say that so does WH Smith by distribution and selling the books - after all authors would not sell much if all they did was stand on street corners with a pile of their books. But the issue is that Google has such a stranglehold on the content presentation market through its search engine that all authors, if they want to sell their books, must use Google. If that is the case, then every author will be competing to get seen and so the more they pay, the better their chances of being read and selling their books.

It isn't a great deal different to the way books are sold today and everyone is upset by new methods. Eric Schmidt, CEO of Google, recently criticised newspapers for being out of touch and that they have to adapt as Google does so much for the presentation of their product. But what it means is that the standard of reporting will be impacted if more of the profit goes to Google just because they have the stranglehold on the distribution.

They could become the modern 'Internet Teamsters' - if you don't pay us a percentage, you don't get read.

In the meantime, by digitising the books and redistributing them, authors lose control of the copyright. They no longer will get paid per view by selling the books but will probably sacrifice the potential gains. Moreover, this could signal the death knell for companies like who have done so much to revolutionise books and decrease the prices as they do not, yet, negotiate directly with major authors.

Google claims that any author is just a click a way and that claims over its search dominance are overstated. They now even dispute independent industry sources on web search when they rate Google with over 70% which is really silly.

In a separate round of scrutiny, Google's policy of allowing advertisers to buy a competitor's brand name as a keyword has been criticised. This is often seen when you 'Google' a particular product by its tradename, then up pops adverts from a competitor as they no longer purchase keywords associated with that industry, they simply purchase the tradename as the keyword. It means they skew their own ratings by doing so. There is also a claim that this is trademark violation.
It's a story yet to play out.


Arguably, the biggest area of concern about Google is privacy and personal data. Google has vast quantities of our data gathered through search. It has launched iGoogle and has its GoogleApps which will store all our user-generated content in 'The Cloud', as it is known. The argument is that as Google dominates the market, we will all have less choice on where to store our data.

Many companies who believe their own products or services can keep user data more secure are being pushed out of the picture by Google's dominance. This also means that Google can use the information collected to its own exclusive advantage. What would be stopping it from profiling people and sending customised adverts or following them around on the web and then make personal offers to them? As they bought DoubleClick, the internet ad agency, they have the perfect vehicle for exploiting this. It may not happen - but the fear is unquestionable.

Google For The Future

Nobody doubts how fantastic a company Google is. It has revolutionised search on the web, it has made sure that superior technology has triumphed over Microsoft and we have got the best out of the web so far instead of what Microsoft would give us. But in doing so, it too has become a monopoly.

In answering the cases against it, Google has sought to deflect the suspicions of its activities by saying they are stoked up by its competitors. That's a bad sign as it seems that Google has also acquired the paranoia of a monopoly and lost touch with the world that does care if choice gets limited or data misused.

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