When Google pulled out of its proposed search advertising deal with Yahoo last month, it was chief legal counsel David Drummond who made the announcement. He cited concerns of a “protracted legal battle,” but only now do we learn that the Justice Department was only three hours away from filing an antitrust lawsuit to block the deal. Sandy Litvack, the prosecutor hired by the justice Department to head up the case, tells Am Law Daily:
We were going to file the complaint at a certain time during the day. We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement.
. . . It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly.
When it came down to the wire, Google blinked. It was the right move. But Google is on notice that the DOJ considers it a near-monopoly, and will treat it as such if need be. At least until the Obama Administration takes over. Then Google CEO Eric Schmidt can remind them how hard he campaigned for them to win.
(Photo by CarbonNYC).
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How long before Google screws up big time?
They won’t screw up big time. They will become to the leader of the Fortune 500.
People will fear them, but they will not treat us poorly!
All hail Google.
It’s sort of funny how Google is slowly going from the company that could do no wrong, to just another evil empire.. that’s the life cycle of a start up though I guess..
People need to start to realize Google is a corporation and goal of a corporation is to make money. Isn’t it structured to chose whatever path is the most profitable? The company is not evil or good it is corporation. Google was trying to get as close to the monopoly line as possible because if they own advertisements on the web, they make the most money. They guessed wrong as you point out which us unusual for Google.
No. A corporation exists solely to serve the interest of its share holders. Most corporations have share holders who are interested in money but not all are that way. One of the key factors in the ending of apartheid in South Africa was the divestment by American universities from South African corporation over the issue of apartheid. So your generalization is incorrect. If Google started killing babies for money, I’m sure its shareholders would object and as shareholders they have a very strong voice in how a corporation ought to be run.
The “interest of its share holders” as you helpfully pointed out has been officially translated in the business world (by that I mean “for profit” corporations) to mean “maximized profit”.
In fact, in the US a corporation and its CEO/board of directors can be sued for taking actions (or not taking “legally allowable” actions) that don’t translate into higher profits.
“[the] goal of a corporation is to make money”? No. Of late it has become popular to forget that a corporation exists to make a product or provide a service. Making money is a *requirement*, but not the sole goal or purpose of the corporation. If it were, then the term “not-for-profit corporation” would be nonsensical. The world is not served by corporations that forget that their purpose is to be part of a system where goods and services are exchanged and where money is just a vehicle for lubricating that exchange. A company should not engage in uncompetitive practices (I’m not saying that Google is doing so) just because it can make more money that way. The same goes for perpetrating fraud, polluting, creating dangerous products, or anything else that is lucrative but does not serve the economic well-being of the rest of society. If Google espouses a philosophy of “do no evil,” I think it is appropriate to consider whether or not an action that Google takes is evil. Indeed, it is appropriate to ask whether or not an action taken by *any* company is evil. Saying that they are just a corporation doing what corporations are supposed to do is a cop-out.
Are you serious? What is evil about this exactly?
They’re a monopoly for a reason. I can’t think of a better search engine than Google.
so basically you’re saying google chicken out due to fear of a lawsuit
yup
Michael you were a lawyer weren’t you? why did you ever stop?
just curious,
Jacob
Let’s see, sit in your underwear in Atherton and post a bunch of crap to some website and charge people $9k/Month for a 125×125 pixel ad.
Ya, that’ll do it
I know Google’s saying is “Do no evil” and I really like Google, but if they did that deal with Yahoo, it would be pretty hard for bad things not to happen. Very Scary.
Given a choice between Microsoft and Google buying Yahoo, and being a user of several products that Yahoo has bought, I would MUCH rather Google buy Yahoo Widgets and Delicious than Microsoft.
I think worse things will come from Google NOT buying Yahoo. Not because Google isn’t “evil” or because Microsoft *is*, but because Google doesn’t have an incentive to screw up or even shut down these kinds of products, and Microsoft does.
What is up with our government? Why in the world could Google not purchase Yahoo! if it wanted to? It is not like there are not other search engines. Same thing is going on with Alltel and Verizon. The government wants Verizon to sell off some of its properties for the merger to go through. Why? Anyone have a good reason that doesn’t use the word monopoly?
To be fair, spectrum usage is a completely different animal and is licensed to companies but owned by the public. The government does have full right to dictate who can use what amount of spectrum for what purposes. We also greatly subsidize the telcos for last mile and infrastructure. So, I don’t necessarily have a problem with them dictating terms to telcos to an extent.
That said - stay off my internet. As far as I’m concerned I’d much rather have Google than a foreign entity controlling search (even if they do have a monopoly) - and I’m not a huge fan of Google.
I’ve got two reasons for ya, take your pick
“”Did you really think we want those laws observed?” said Dr. Ferris. “We want them to be broken. You’d better get it straight that it’s not a bunch of boy scouts you’re up against… We’re after power and we mean it… There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted – and you create a nation of law-breakers – and then you cash in on guilt. Now that’s the system, Mr. Reardon, that’s the game, and once you understand it, you’ll be
much easier to deal with.”"
*or*
“Miss Taggart, do you know the hallmark of the second - rater? It’s resentment of another man’s achievement. Those touchy mediocrities who sit trembling lest someone’s work prove greater than their own — they have no inkling of the lonliness that comes when you reach the top. The lonliness for an equal - for a mind to respect and an achievement to admire. They bare their teeth at you from out of their rat holes, thinking you take pleasure in letting your brilliance dim them - while you’d give a year of your life to see a flicker of talent anywhere among them. They envy achievement, and their dream of greatness is a world where all men have become their acknowledged inferiors. They don’t know that that dream is infallible proof of mediocrity, because that sort of world is what the man of achievement would not be able to bear. They have no way of knowing what he feels when surrounded by inferiors - hatred? No, not hatred, but boredom - the terrible, hopeless, draining, paralyzing boredom. Of what account are praise and adulation from men whom you don’t respect? Have you ever felt the longing for someone you could admire? For something, not to look down at, but up to?”
Quoting Rand-ian objectivist diatribes is fine as long as you realise that the same thinking led Greenspan to propose that the lassez-faire lack of oversight that helped us into the finance mess was a good idea (as he was one of her biggest fans/friends).
That and Rand being a fantasist, of course
I see you’re unfamiliar with the history of the real world, where monopolies are anything but capitalist in the fundamental sense of the word because they actively inhibit competition.
Rand’s whole point was that selfishness was good because it allowed rich people to flourish (genetically) and weeded out the poor; she was fundamentally an elitist. She also had a piss-poor understanding of economics; selfishness contradicts the trust and information-dispersal foundations upon which capitalism is built.
IOW…if you quote Rand, you are an anarchist, not a capitalist.
This won’t happen anymore once we start taking things like this up with http://www.google.com/justicesystem
I guess I’m a bit confused as to how the Google/Yahoo deal could have thrown Google into the dreaded “Monopoly” territory. My understanding of a monopoly was when a company created a business environment that made it impossible for other companies to compete in the market.
It’s really the same problem I had with calling Microsoft a monopoly. Just because it’s *hard* to compete with a particular company in a certain market space doesn’t mean it’s a monopoly. It amazes me that, in our current business climate, we basically tell companies “be successful…but not *too* successful.
Strange to me
The DOJ argued that a combined Google-Yahoo would give it more than 90 percent market share in online advertising. That could give it the ability to control pricing and shut out any competitors, making it not just hard for anyone else to compete but impossible.
Of course, Google wasn’t trying to buy Yahoo and its deal specifically limited how much of Yahoo’s ad inventory it could sell. But that didn’t persuade the DOJ to drop its objections.
I think your understanding of a monopoly is wrong. There is probably no such thing as the kind of absolute monopoly that makes it “impossible” to compete. It’s all a matter of degree.
Monopolies are only maintained when government creates/protects them- ie, the post office, providing passports, et cetera. Even if Google bought every online ad company and served 100% of all internet ads, there is no way that would last.
it’s worth remembering that even if google were a monopoly (which they aren’t), it’s the exercise of market power to unreasonably restrain trade that is unlawful. just having a monopoly isn’t illegal at all.
but microsoft and a number of smaller players are a solid reminder that google isn’t a monopoly. that doesn’t mean they can’t move to unfairly restrain trade, but the term monopoly doesn’t have much to do with it.
It does have something to do with it. There are different rules for monopolists. The DOJ was going to call them a monopoly so that they could argue the Yahoo deal would restrain trade.
not surprised.
Interesting news. They’re obviously sensitive about being labeled a monopoly, and for good reason. But i wonder if the deal was ever good enough for Google to challenge the said-lawsuit.
Cuil prevents Google from being a monopoly
Ha. Good one
Free Trade is a fancy buzz word for greed, organized crime and racketeering. seems there needs to be a barrier to entry to be a monopoly? i dont see one. from what i understand the internet was supposed to have leveled the playing field. was that a myth?
JusticeLocator - share the wealth
Monopoly doesn’t require a barrier to entry. That’s actually the justification for *allowing* monopolies, namely, that the natural barriers to entry are so costly (i.e., massive capital required), that expecting natural competition to develop is fanciful, and a monopoly should be allowed (but subject to special regulation).
How is google not a monopoly in this day and age. It’s just not that blatant at this point of time. If the yahoo deal went through, it would have.
JobsTAXI on Crunchbase
http://www.crunchbase.com/company/jobstaxi
wtf is a near-monopoly?
There is no reason you can’t go into your bedroom and write a better search algorithm. or OS for that matter. In fact, thats exactly what Google are doing to Yahoo and Microsoft!
I agree, look for unfair advantage and not simply ‘being successful’!
This goes to show you that Google get’s the news before even the court system does in the United States. Google pwns you.
*listens to Eric Schmidt laugh hysterically in the background*
Leave Google alone. At least they haven’t completely sold out the the authorities and the New World Order yet. At least they support open source, don’t put censorship bots in their crawlers (well, i think they have been lately maybe), support p2p, and they have a algorithm that truly works. Why is everyone trying to eat up Yahoo? What happened to the concept of competition in this country of ours? The more companies the better for all of us. There are more jobs, less corruption, more freedom of choice, and countless other benefits. What about the monopoly of comcast and verison. those aren’t straight up monopolies? they have the power to censor the internet, direct traffic to and away from any site they deem fit or unfit, and snitch on their customers if they write an article with a tone of dissent similar to the one I am using now.
Where else can we go? Dialup? They squeezed those ISP’s out of the internet community by creating web 2.0 and putting a lot of needless crap code and functionality in website that do nothing more than supply cooking recipes or something.
I am getting throttled by my broadband carrier all the time now. 250gb limit! ha! try video conferrencing all day on skype or a vpn with your company containing every news and trading feed in every world market every trade of the day. You’ll see how wonderful their so called more than enough bandwidth allowance is for you.
Microsoft has become the enemy of freedom of expression and individual choice and self-responsibility as of the past 8 years or so. Apple has just started on the same path now. If the internet does not remain completely and 100% transparent and open to any type of functionaliity possible within it, then we are all doomed as an entire global society. One thing I never understood was why it isn’t possible to create a second physically separate internet. I know that sounds like a very stupid and unintelligent question, but something else worded differently along those same lines is what I am thinking about.
Google helped China arrest Dissidents. Google shielded child pornographers, drug peddlers, and sex traffickers in Latin America. It stores information about your ever online activity.
Microsoft provides developers free tools to make programs and games without any restriction. It provides office software that has been used to write thousands of novels and research papers.
Get some proper perspective before you make outlandish claims.
Why are people so afraid of monopolies? Why do we always look at the bad side of monopolies, isnt there a good side to it?
Wow, that’s a huge question.
Fundamentally, free-market capitalism breaks at the monopoly stage. Competing companies fighting for market share provides consumers with at least some form of options. It also provides a space for innovation, which helps to keep companies providing new value at a competitive price.
The problem comes when somebody “wins” the fight. Imagine for a moment that one group was allowed to buy out all of the cell phone companies and all of the cellphone towers in the US. (Let’s ignore the fact that US taxpayers funded part of these) So now you have one cell phone company with no mandate to lower prices or really increase service any more than the minimum. They own all of the towers, all of the infrastructure and all of the customers.
This is a monopoly.
Now how is this good for you?
If you want cell service you pay what they charge and that’s it. Can’t afford it? You can’t go anywhere else. Think you can make a better network? Good luck building the required towers and not losing money in the process.
Look, there’s an upside to monopolies, but that’s when the public owns the services. In many ways we “own” public transportation and waste disposal and law enforcement. But that’s b/c we figured these services were really essential and that it was cheaper to implement these things on our own.
We didn’t see a lot of benefit to having a price war on garbage disposal or buses (heck we wanted to run “unprofitable” buses to help certain segments). So we just let “the city” run these services b/c it’s the easiest way to proceed.
But in a Capitalist setup, the “monopoly” is the breaking point of the whole system. When companies compete, consumers generally win, when a company “wins” the competition, consumers generally lose.
Yes, it’s ironic that any company that “wins” is immediately forced back into battle, but it’s the only way the system works.
Google got a virtual monopoly of online search ads, that’s the reason why Google can’t bid or take any partnership with Yahoo,Microsoft for the first time played a catch up with Google and underdog. Microsoft only weapon of choice to fight Google’s hegemony was to carry the case to government regulators. Mighty Google is still unbeatable.
When I read this article, I couldn’t help but smirk… because in some sense I said something similar as the way the DOJ thinks a while back, as can be seen in my post at http://pjondevelopment.50webs......-test.html
“At least until the Obama Administration takes over. Then Google CEO Eric Schmidt can remind them how hard he campaigned for them to win.”
I’m not entirely sure it was the Schmidt endorsement which swung the election.
You know what….. I am getting so fed up with the corrupt government going after the latest witch. Internet search is not necessarily the same as dominating some other physical market; someone can always come up with a better search technology and snatch the market away from Google overnight.
Now, let’s talk about the cable internet industry (and mobile phone/internet industry to a lesser extent). You want to talk about monopoly that stifles innovation and robs us each month; there’s where you start.
Can you think of another technology that gets more expensive as technology improves and costs go down? There’s a monopoly that you need to sink your unintelligent fangs into, you idiots at the Justice Department. Does defending torturing and abducting innocent people, and holding people without due process and indefinitely once they have been ordered released take up all your time or something?
STFU and do something that shows a sliver of competence and integrity.
Cable monopoly is justified on the grounds that its too expensive for natural competition; it costs literally billions just to compete in a major metropolitan area…and that’s the initial outlay, before subscriber revenue flows in.
The only way to provide competition would be to force cable companies to let competitors use the cable company’s hardware…but that provides a disincentive for cable companies to invest in hardware.
That doesn’t mean that cable monopolies are good, that just means that they’re allowed because of economic realities.
Give me a break.
IMO, a monopoly is when you don’t have another choice. For instance, if there was only one energy provider in my area, I would have to use them, no matter what they charged.
In this case, Goggle would have market share, and advertisers would advertise on Google even if they charged 9K a month. They wouldn’t have to though. They could always advertise on MSN or any other portal/search engine. Would it be as lucrative? Probably not, but at least there are other alternatives.
I would think the internet is the last place a monopoly would exsist. All you have to do is point your browser somewhere else.
Why is there only one monopolies commission?
Some would see that Yahoo is on the brink of failure, getting closer every day to dying or being sucked up by another company. If that happens, it would only strengthen a Google-opoly more so than if Google had entered into a partnership with Yahoo.
Yahoo will apply a new advertisement experience and maybe will increase this 3 hours to 6
http://www.eskibirsaat.com
hahaha check it out!!! The kids these days are quick!! http://www.shortershelflife.com
Please our friends at google, go where the real monopoly lies, please make an X86 OS.
PS: Im a google lover
They should still be charged, lol
I wish i had time to freaky elaborate why, in case anyone does not know….