Column: Google’s creepy new search probably isn’t anti-competitive

By Max Novendstern

Column: Google’s creepy new search probably isn’t anti-competitive

With “Search Plus Your World,” Google finally tips the hand it’s been holding since the summer.

Eric Schmidt said it clearly enough: Google+ was never really about social networking; it’s a data-mining project. The goal was to break the back of Facebook’s monopoly on our personal information — to coax us into telling Google whom we’re friends with, what we like, how we spend our free time — so that Google could do what it always does: improve its search product and improve its ads product, the company’s core businesses. From a business perspective, search and ads are almost all that matter, and Google believes (rightly, probably) that adding social data will improve them both.

One reasonable question in response to this might be: Is creating a trojan horse Facebook clone like Google+, in order to harvest our personal data, so that Google can improve its search product by displaying photos of our friends’ dogs, a desperately simple-minded, if not actually creepy plan that’s bound to fail? Well, probably yes.

But there’s another question roiling around the internet: Is it “anti-competitive”? M.G. Siegler writes:

This is the type of case that Senators die for. Google wrapped it in a bow and placed it in one of their laps.

Most of the broader antitrust concerns against Google are bullshit in my opinion. You can argue that they have a monopoly on search, but it’s a natural one. They’ve earned it. They’re simply better at search than their competitors. This has always been true. It remains true.

But when they use that natural monopoly to start pushing into other verticals, things get gray. Travel, restaurant reviews, etc, etc. We see more of it each year.

But this, at first glance, seems decidedly worse. Google is using Search to propel their social network. They might say it’s “not a social network, it’s a part of Google”, but no one is going to buy that. They were late to the game in social and this is the best catchup strategy ever.

In the words of HBS Professor Ben Edelman, Google is engaging in “classic ‘tying’ behavior.” They’re using their natural monopoly on search to give unearned attention to their social networking site. This isn’t the first time Google’s done this either, according to Edelman.

By all indications, free traffic from Google Search has played a valuable role in launching many Google businesses. For example, Google Maps usage remained sluggish until Google started to present inline Google Maps directly within Search Results, a practice that began in earnest in 2007. As Consumer Watchdog’s 2010 “Traffic Report” shows, this change precipitated a sharp increase in Google Maps’ market share: Traffic to Google Maps tripled while traffic to competing map sites fell by half.

I can’t know what’s in Google’s heart of hearts, of course. But this actually seems like the reverse of what Google’s doing. They are almost certainly not using search in order to pimp their maps product — which would imply that Google’s handing out a subsidy and actually hurting search in the process. They are, to the contrary, almost certainly using their maps product to help their search product. Indeed, you could retell the story of Google’s entire product line around the goal of helping Google Search. Its books indexing efforts, its blogs search, its local reviews site Places, its news aggregator and now, its social data: who cares if these sundry properties succeed? The goal is to make the real kahuna, Search, more robust, more competitive.

And if you do believe that search would be better with maps, with books, and with social data, then building their own solution for acquiring this data is basic strategic thinking for Google. If they didn’t, they’d be dependent on the whims of the market to get them maps and books and social information and then on the whims of business negotiations to get licenses for it. In the case of social data, it was the latter step that caused the problem. Twitter simply chose to prevent Google from displaying their data on search. So Google, as a hedge against precisely this outcome, built an alternative. They called it Google+.

What’s wrong with that?*

I happen to full-heartedly agree with Matt Yglesias’s claim that progressives should relocate their economic critique from an agenda of “taxing the winners of our economy in order to transfer their money to the losers,” to an agenda of making markets more fair, and empowering all citizens to create for and compete in them. The goal of the left is to enable ordinary people to live free and creative lives. Tax and transfer is — and historically, always has been — a poor substitute and disappointing compromise for this larger left aim. And so, if we believe that making markets fairer and more open aligns strongly with our aims, then we ought to be sympathetic to a program of using state authority to disentrench abusive market power. Which is to stay, we should advocate for trust busting.

But the silly arguments that Google’s fledgling attempts to integrate social data into its search results represents an offense punishable under anti-trust law is a good rebuke to the TR-style progressive: in short, sometimes you just don’t know what you’re talking about.

*If anything, as Dave Winer argues, Google’s failure to implement its social data alternative correctly is breaking their monopoly power, rather than entrenching it.

Read more here: http://hpronline.org/united-states/im-dubious-that-google-is-being-anti-competitive/
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