More Antitrust Woes for Google

After repeated antitrust skirmishes in the U.S., Google now faces a preliminary antitrust inquiry in Europe. Three European Internet companies are complaining that Google unfairly applies its search ranking on these competitors so that their results ranks lower.

Google denies the charges and in fact immediately questioned the firms’ motives. From a post on Google’s European Public Policy Blog

Given that these complaints will generate interest in the media, we wanted to provide some background to them. First, search. Foundem – a member of an organisation called ICOMPwhich is funded partly by Microsoft – argues that our algorithms demote their site in our results because they are a vertical search engine and so a direct competitor to Google. ejustice.fr’s complaint seems to echo these concerns.

The European Commission has notified us that it has received complaints from three companies: a UK price comparison site, Foundem, a French legal search engine called ejustice.fr, and Microsoft’s Ciao! from Bing. While we will be providing feedback and additional information on these complaints, we are confident that our business operates in the interests of users and partners, as well as in line with European competition law.

And it added later in the post:

Regarding Ciao!, they were a long-time AdSense partner of Google’s, with whom we always had a good relationship. However, after Microsoft acquired Ciao! in 2008 (renaming it Ciao! from Bing) we started receiving complaints about our standard terms and conditions. They initially took their case to the German competition authority, but it now has been transferred to Brussels.

While Microsoft’s involvement is as ironic as it is unsurprising, that won’t change the fact that Google will continue to face more scrutiny thanks to its dominance of search and search advertising. The U.S. Justice Department came within hours of suing Google before the search giant backed off its proposed deal with Yahoo. And Google continues to face a potential fight over its deal with book authors and publishers.

As John Battelle notes, the allegations–like most others vs. Google–seem less serious than the kind that forced Microsoft to changes its ways. What’s more, it’s difficult to envision what Google should be doing differently: Stop or slow changes in its algorithms? Doesn’t sound so great for users. Open up its algorithms to more public scrutiny? Google might help itself by being a little more open there, but it’s hard to see how government authorities could require it. Break Google up, as one commenter on Silicon Alley Insider suggested? Um, break it into what? It’s still largely a search company–indeed, to whatever extent Google’s investors complain about the company, it’s that it hasn’t done enough outside search.

If remedies to Google’s power seem murky, such are the ways of antitrust law. (After all, Microsoft’s search deal with Yahoo was just OK’d by U.S. and European authorities, resulting in one less competitor to Google, so go figure.) I’d still be surprised if Google, whose actions haven’t yet been shown to be anticompetitive, got slammed by antitrust authorities as decisively as Microsoft was. But there’s little doubt that remaining innovative and aggressive in the face of such complaints will be Google’s key challenge in the years to come.

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Google Buzz Won’t Kill Anything. Except Your Notions of What Email Is.

Every time Google comes out with a new service, pundits rush to assure us that it’s going to kill this or that startup. Or the skeptical ones that it’s an attempt to kill this or that startup but won’t because it sucks in this way or that. As usual, Google Buzz, announced today and scheduled to roll out to Gmail users in coming days, is neither.

The social updating services Google Buzz offers certainly resemble those variously offered by Facebook, Twitter, Foursquare, and others. And there’s little doubt that Google executives are concerned that those fast-growing services could siphon off attention and eventually ad dollars from its core search service. But it’s also a dead-obvious thing for Google to take its Gmail service, used by some 175 million people a month, and graft social services atop them. O’Reilly Answers has a nice summary of those features.

Although Google Buzz looks like a me-too service–and frankly it is in some ways–it does start with a couple of potent advantages. For one, as Tim O’Reilly notes, it’s starting with a huge user base. And Gmail already isn’t just an email box. It now incorporates chat, the Google Voice phone service, and other optional add-ons such as a view of your Google Docs. In that sense, adding another communications services isn’t a big stretch. Suddenly, Gmail is the place where you communicate in all kinds of ways.

Not least, Google’s knowledge of people’s preferences and connections could go a long way toward providing the filter that every other social service lacks. Facebook, Twitter, you name it–it’s nearly impossible to sort out the wheat from the chaff. Google’s promising that it can provide that filter with some simple tools such as an “unlike” button for posts you don’t care about, which then will inform what posts you might see in the future. If it works, Google Buzz will be successful. But that’s far from certain.

Google’s challenges here are many: It’s the organic simplicity of Facebook and Twitter that has helped them catch fire, and Google Buzz. Yahoo (which has its own quite different Buzz service) has tried to turn its email service into a broad social network by adding similar services. By most accounts that hasn’t succeeded because the multiplicity of services is just too confusing. Google has the same problem, as Danny Sullivan notes. And where’s Google Wave, which itself was supposed to be the brave new social future of email, in all this?

Danny’s colleague at Search Engine Land, Matt McGee, raises a thornier issue: Do people really want to mix business with pleasure? Email has quite different purposes than social networking. I’m betting a fair number of people don’t want their Gmail messages (which many probably use for work) intermingled with their social updates. Yes, Google’s providing controls over what appears where or to whom, but that may be a click or two too many for most people.

I haven’t been able to try it out yet, so I can’t judge how well Google Buzz works. Maybe it will be just another Google product that goes nowhere. But I also think Google’s on to something–as Microsoft’s slam and Yahoo’s “we were there first” protest both prove. And it has the resources to become a social powerhouse–even if that potential has produced little so far. Neither Facebook nor Twitter executives need lose sleep over it for now, but neither have they won the game. The evolution of online communications is far from over.

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