More Trouble For Google: War On The Regulatory Front?

The Wall Street Journal and The New York Times both reported Thursday that the Federal Trade Commission (FTC) may be preparing to issue subpoenas to Google as part of a civil antitrust investigation into the company’s search engine business.

If this proves to be true, then Google may finally be forced to face its real moment of truth.

As I’ve been saying, Google is seriously limiting itself – and its future – by sticking with its anonymous algorithm and not finding more significant ways to take advantage of the fast-growing Social Web. Google is also coming under intensifying pressure from Facebook, which is the de facto operating system of the Social Web and increasingly taking share from the searchable web, Google’s previously dominant domain.

If the FTC leans on Google, the company could find itself pinned down in a crippling – or at least debilitating – three-front war. On one battlefield, it would be forced to fight the Federal government; on another, it would be required to grapple with Facebook, which is establishing Social Web supremacy; and then, on a third, a suddenly more limited Google would have to contend with increased competition in search from Microsoft’s Bing.

I like Google CEO Larry Page, but he’s hardly the digital equivalent of Napoleon or General George Patton.

The real question here, though, is whether Google is stuck in search, or whether it can innovate into new markets, social and otherwise.

In some ways, Google’s potential conflict with Washington D.C. is reminiscent of the mid-1990’s, when The Department of Justice alleged that Microsoft engaged in exclusionary (and anti-competitive) actions in the browser market as part of its efforts to maintain muscle in personal computer operating systems. The resulting legal action distracted Microsoft and required a good deal of time and energy that might have been better spent innovating for the surging Internet.  And what’s even worse, many saw the ordeal and ensuing similar European legal wrangles as tipping a cultural mindset change from one of fiercely aggressive growth to one of cautious bureaucracy.  And that cultural change that seems to have kept the company out of pretty much all the greatest technology growth markets of the last decade.

No one knows if a similar fate awaits Google. But, in any event, it’s becoming quite clear that “more of the same” isn’t going to allow Page & Co. to continue their success of the last decade into the next.

One thought on “More Trouble For Google: War On The Regulatory Front?

  1. The pandering to the notion that this investigation is anything similar to Microsoft's is sensationalist at best.  It's crazy to think that tightly integrating the web browser into the the OS (Microsoft's tactic) has anything in common with what Google is being investigated for other than being the dominant player in their space.   Bing is rising, many other venues take your advertising dollars easily and Facebook has taken market share of the total web away from Google as you point out in an earlier post.Your point however, drawing from the Microsoft comparison, seems to be that Google can't sit still nor can it proceed tepidly, which you conclude was Microsoft's mistake.  Maybe.  Big maybe.

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