In Google We Antitrust
Randall asks about antitrust issues, and both he and David think there aren’t many, at least in Google’s core search business. I tend to agree, for reasons they’ve laid out. Compared with the lock-in of using Windows and the network effects of a common set of operating system interfaces, web search is a wide open world. Anyone who comes along and offers better search is in a position to grab the lion’s share of the market, the way that Google itself grabbed it in the beginning of the decade. (For the record, I don’t think Microsoft’s deals with Dell and Verizon Wireless are a sign that Microsoft is competing effectively in its search offerings; they’re a sign that Microsoft has enormous piles of money to throw away on bad business decisions.)
The DoJ scrutiny of the Google-Yahoo deal was similarly off-base. The usual antitrust fear is that sellers will collude and raise prices. But the instant a web search company stops providing free search, it’s dead. Faced with this fact of the search marketplace, opponents of the deal argued that the companies would raise their prices to advertisers. That would be plausible, except that Google’s ad-pricing algorithm is based on an auction to potential advertisers; their competition with each other sets the price. And, of course, from an advertiser’s perspective, search ads are just one piece of the online advertising market; if the prices for search ads go up, advertisers will just find another way to annoy web users. There is at least one place where Google needs a good, careful antitrust review, though: Google Book Search
Planet Google has a nice chapter on how Google decided to start digitizing every book it could get its hands on, and how it ticked off authors and publishers in the process. Their lawsuits were pending when Planet Google went to press, but this October, the parties announced a proposed settlement. Not only will Google be free to continue digitizing and indexing books (the issue actually at stake in the lawsuit), it’ll also get the green light to sell individual e-books and subscription access to its entire collection. The majority of the revenue will go back to copyright owners.
The antitrust danger here is that the settlement puts Google in a highly privileged position for book search and book sales. Do you want to sell e-books of scanned out-of-print books the way Google will? Good luck with that; I hope you’ve put aside a lot of money for lawyers. The authors and publishers settled voluntarily with Google, but there’s no guarantee they’ll offer similar terms, or any terms at all, to anyone else. Google also gets some excellent deals with the new Book Rights Registry the settlement sets up to process payments to copyright owners. The Registry is empowered to negotiate on behalf of all authors and publishers, and it could unilaterally decide only to talk to Google.
The settlement hasn’t been approved by the court yet, so some of the harms are still speculative. But you don’t need to speculate very hard to come up with some. Google could set its e-book prices to undercut the entire used book market and drive most used book stores out of business. Google could offer low rates on subscription access until cash-strapped libraries discarded their (expensive-to-store) physical copies of books and then jack up the price once the libraries were dependent on it. It could use its unmatched collection of titles to offer bundles and tie-ins that no competitor could match.
I’m not saying that the book search project is a bad thing; in fact, it’s one of the best things to happen to publishing in a long time. Authors, publishers, and readers will all win. My point is just that the way the settlement is currently set up will give Google and the new Book Rights Registry far more power than accountability. The settlement needs more public attention than it’s been getting. Maybe we can convince Randall there’s a killer article to be written about it?
If not Google, who? If not now, when?
All of this Google-bashing is getting tiresome!
The AG-AAP settlement opens the door to bringing back MILLIONS of out-of-print books, and extending the lives of millions more "backlist" titles. Can we all agree that the end result is a good thing for mankind?
As we enter 2009, the conventional book publishing industry is reeling from a global economic crisis, preceded by years of failure to evolve more effective business models from an outmoded and wasteful architecture. Yet Google remains strong enough to commit the resources needed to achieve this historic leap in the evolution of the "printed" word.
I don't know another entity more capable or willing to make it happen. All of us who love the written word should applaud Google's efforts, and get on with the business of dragging the book world (kicking and screaming, if necessary) into the 21st century.
-- Danny O. Snow, Senior Fellow, The Society for New Communications Research and author of "Steal this e-Book!"
January 15, 2009 11:25 AM | Reply | Permalink
Thanks for your patience and sorry for the inconvenience!
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December 17, 2010 3:12 AM | Reply | Permalink
Google does not exercise a proper due-diligence regarding ad revenue abuse. They only go after the blatant and/or obvious abusers. It's not in their economic interests to eliminate all ad revenue fraud, as it decreases the number of click-throughs. This still makes them better than most other web-advertising systems.
First-tier web search engine business has become an almost impenetrable market for the little guy, but this is not Google's fault. Data on the web proliferates exponentially, and it takes a tsunami of capital flow to get the classic model up and running, as well as keeping its databases current. I'm still holding out a great deal of hope for the Majestic-12 search engine model. It uses a distributed workload model sort of like the SETI initiative to crawl the web, and has slowly ramped up to near a 250 million URLs crawled/day average. If it gets up and running, using good search algorithms, it will steal some of the profitability motivation for major search engines.
Google's free Blogger service is inferior to Wordpress.com's free blogger service. The only reason I have a blogger account at all is because it provides me with a throwaway pseudo, for providing easy commenting access on Blogger sites.
I much prefer using Yahoo's Javascript UI, to anything I've seen come out of Google Labs, excepting their python web mapper. It's a nice bit of software, but requires an even greater geekish quotient to implement that Yahoo's JS libraries. The Yahoo Javascript UI is clean frequently updated code with an extensive library, and Yahoo even serves them up free from a distributed network if site administrators prefer it. The documentation is far better than average compared to other commonly used Javascript frameworks.
I don't have a Gmail account. I have access to as many email accounts via web domains that I desire, and do not recommend any real business ever be conducted through a web-based email account. Gmail has of late become the first choice of spammers/phishers/hackers and their ilk, instead of HotMail. The same holds true for web-based office apps platforms. Who in their right mind is going to be throwing business docs back and forth between their desktop and a public web-site. Are they insane?
Picassa is pretty good, but so are many other free photo hosting websites. Google Earth is cool, but NASA's WorldWind is better for getting some types of geographical data. Google Books kicks ass. It's a world wide library, and anything written from right after the birth of the 20th century is public domain.
All in all, I do not think that Google comes anywhere close to being a monopoly.
Yet, it is still wise to always remember:
Sergey Brin Is everywhere!
January 15, 2009 12:12 PM | Reply | Permalink
On a fairly regular basis, Google makes major changes to their search algorithms and kills our small online business by making us essentially "disappear" for a period of from days to weeks. If we want to stay in the results, we have the choice to pay them. Otherwise, we're at their mercy. Google is FAR too powerful. If they can afford to put their own satellite in orbit, they need to be watched--very carefully.
Don't trust big corporations. None of them. Not even a non-monopoly that does no harm. Like Google.
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