Is Google the New Microsoft?

Is Google the new Microsoft? Some people think it is on the way; others say there is no chance of such an enduring dominance. For regulators, the question is thornier. Every competitive market sooner or later turns less competitive, for very simple reasons: users flock to great products and stop using or buying the less-good products. Over time, that naturally creates market dominance, and that in turn ultimately draws in regulators to prevent excessive market control.

But regulators have to define what markets are in the first place, define the relevant competitors, then quantify the impact and propose remedies. Let's assume the relevant market in this case is "search." Ignore for the moment the fact that neither Google nor any of the other contestants ultimately will operate in such a narrowly-defined segment as "search."

Sometimes, regulators, users and markets get the "dominance" thing wrong. Some of us can remember very-serious discussions about how to "control" the browser market, as that was deemed essential to "control" of Internet experiences. As it turns out, the browser was not central to "control." Then Microsoft proposed an Internet identification system called "Passport." Regulators were concerned that Microsoft could become the "toll keeper" to the Internet if the identity scheme were massively adopted.

For starters, it didn't get such adoption. In broader terms, the Internet itself grew so fast that it is questionable whether any single identity system could be said to "dominate" the Internet.There was competition after all.

All that said, regulators have ruled that Microsoft has a monopoly in desktop operating systems, that Microsoft has abused its monopoly position and that consumers therefore were harmed, though not necessarily in the opearating system market but in "ancillary" markets that might have developed more competitively.

So the issue is whether Google is becoming, in search at least, the equivalent of Microsoft in the operating system area. Curiously, Google will be charged simultaneously with being a "monopolist" over information and at the same time essentially a leech as it "creates no new information of its own." Google will be called an "information gatekeeper" even as it continually tries to devise better ways for users to find the very information it is supposed to be "gatekeeping."

The issue with that line of thinking is that Google doesn't "own" or "control" the information. What it "controls" is a user preference for its algorithms and search results. If Google interferes with the value of search results, users will go elsewhere. There arguably are more issues about paid local search. But the analogy there is probably "phone books" rather than search. Phone books are in the paid local search business. What Google wants to do is provider a better paid local search experience.

There probably are better-grounded objections in the privacy area. Google will know lots about its users. But that's something other Web application providers, entertainment and access services provider also are racing to capture. Privacy is a legitimate issue. The conflict between search and advertising models built around search seem less legitimate. Think of Google as media. Media always have had business models based on ad support for content. Google's privacy issues in that regard will not be different in kind from the issues other media will face as well.

To be sure, every era of computing has been lead by new companies. So some company, some day, will be acknowledged to have become that new leader. At some broader level, one wonders whether any such company will have "control" of the Internet and the Web the way Microsoft once controlled desktops.

So far, most consumers say they haven't even heard of "online versions of desktop productivity suites," for example. That isn't to say things will always be that way; just that domination of adjacent markets on the Web will be quite difficult.