The rise of Google might be one of the greatest business stories of the early 21st century. In the late 1990s, Google entered a very crowded
race to provide a search engine to rapidly scour the seemingly limitless wealth of information on the internet. Competing with HotBot, Lycos, Excite, AskJeeves, Dogpile, WebCrawler, AltaVista, Infoseek, Netscape, MSN, AOL, and Yahoo, Google soon emerged as the engine of choice for most internet users.
Now Google performs billions of searches every day, and over 67% of internet searches in the U.S. are performed with Google. Google is so cherished in our culture that people even use "google" as a verb.
But like most businesses that have risen to such stature, Google has been investigated by antitrust regulators. One of the main complaints against Google, which thankfully the FTC did not charge Google with even though their European counterparts probably will, was that Google allegedly favors their own “vertical search services” over those of their competition. The editors at Bloomberg.com provide an example of this:
When a consumer looks for flights on Google, the search engine first provides a short list of airfares offered by Google’s advertisers. Next comes a ‘Google flight search’ box listing the major carriers and their prices. Only after that do online travel services, including Expedia, Kayak and TripAdvisor, appear.
Why is this an issue? In part because many feel, as the Bloomberg editorial board seems to, that Google search is essentially a “public utility of sorts” that should provide search results that are completely impartial to Google’s other services. For those of this mindset, the fact that Google prominently displays paid advertisements or offers its own services above its standard search results repudiates this vision of what Google should be.
But Google is not a public utility. A public utility typically has exclusive access to providing some kind of service in a geographic region because of government support. But this is not Google.
Google does not enjoy exclusive access to the internet—it’s open to all. Google earned its prominence by offering a search engine that produced faster results, and more relevant results than the many, many available alternatives. Google developers built its search engine at their own expense and risk—they had no idea if the years of programming would pay off—and the company now employs an army of developers to maintain it. Therefore, they should rightfully be free to set the terms of its use. Why should they be prohibited from suggesting other Google services when they think users may want them? If users do not appreciate the fact that Google may first suggest restaurants with Google+ Local rather than with Yelp, then they are free to use a competing search engine such as Bing, Yahoo, Ask, or Go.
Some Google antagonists, such as Jeffrey Katz, the CEO of the price-comparison company Nextag, claim they should get equal access to advertising opportunities on Google because they do not get as many customers if Google favors its own products in its advertising space.
But who gets access to Google’s advertising space should be entirely up to Google. The fact that Google has created such prime advertising real estate by offering a peerless search engine does not mean that competitors are entitled to advertise on it.
Many of the internet entrepreneurs, like Katz, who are urging antitrust action against Google, cannot best Google on the marketplace. So, rather than pursue other ventures, they are searching for excuses to encourage the government to cut down a great company that provides services enjoyed by hundreds of millions.