Should Google be broken up into baby Googs? | Hacker News Reader

Should Google be broken up into baby Googs?

itworld.com

15 pointsabennett26 comments

I'd have to say no. Google has been supportive of open technologies and interoperability rather than walling themselves off and keeping customers locked in.

Don't like Gmail? Have your Gmail address forward to another address or access your Gmail account via IMAP or POP.

Search has no lock-in other than being better than the competition.

Consider this: Google's video search returns results from YouTube AND other video sites. Since when does a company do that? Does eBay return results from other auction sites? Hell no! That would give people the opportunity to use whatever service they wanted and ruin the eBay monopoly. Does Facebook allow you to chat with people on other XMPP services or friend people from other services? Hell no! That would ruin their walled garden.

Google has been championing a lack of lock-in. Without lock-in, a monopoly isn't exercising its power. Google could have made Google Talk like Facebook, AIM, Yahoo, and MSN and not made it inter-operable. They chose open. They consistently choose open.

Even one of the complaints - that Google favors its own services in search results - isn't true. Try looking up a stock. Most of the time Yahoo Finance comes in first (http://www.google.com/search?q=goog). Sure, they have the nice little summary there, but Yahoo Finance is the first regular result and they even have links in their special summary to Yahoo, MSN, CNN and others.

Now, Google does purchase ads for their services, but it is a real purchase. Let's say I search for "shopping" and they decide to display an ad for Google products rather than displaying another ad bought for that keyword. They lose that money. Therefore, they're bidding at least equal to the price that the other advertiser would have paid.

Heck, search for "shopping" and up comes Shopping.com first, Overstock second, and Google Products third.

Search for "search" and Google is SIXTH! It's Bing, search.com, Yahoo, Dogpile, and AltaVista before them.

Google has been championing the open web. I'm not always comfortable with their policies or decisions. However, they have not been exercising monopoly power.

How do they lose the money? I... what? Do they donate it to a charity or something?

I suppose they lose the money they would have made if another company had paid for the ad slot.

As I said, they lose the money because that ad space isn't being sold to a paying party.

Let's say you own a baseball stadium and a bar. You decide that you want to put an ad for your bar in the baseball stadium - it will drive business to your bar where you'll make money. Let's say that it drives $1,000 worth of business to your bar every day. That's hard to measure, but assume you can measure it. Someone comes along and says that they'll pay you $10,000 per day to put an ad for their competing bar in that spot. You calculate that that ad isn't worth $10,000/day to you - even taking into consideration natural business to your bar which might now be drawn to a competitor. So, your bar loses the $1,000 per day that the ad drives there plus you determine that you'd lose another $5,000 per day from business that would naturally go to your bar, but is now driven to your competitor. You'll sell them the ad. Why would you sell them the ad? Because you make money.

If you decide to keep your own ad, you have to justify $10,000/day in expense. It drives $1,000 in business and a competitor's ad would lose you $5,000 in business for a total of $6,000. It doesn't make business sense.

In order to want to keep your own ad in that space, you have to believe that you're gaining more than you would by accepting cash from your competitor. In this scenario, you aren't - you'd be losing $4,000 per day. But if you determine that the ad drives $11,000 worth of business to your bar, then you'd be willing to "pay" that $10,000 for the ad. So, your bar pays your baseball stadium $10,000 per day for the ad and the profits of the bar go up even with that expense. However, if the bar becomes less profitable "paying" for that ad, it's better to sell it to the competitor.

When another department of the same logically-owned company does something for another department, it isn't free. If Google's search gives Gmail a freebie ad, search is losing money. So, the gain in money for Gmail must be greater than the amount that search is losing by not selling that ad to a competitor. Therefore, from an internal accounting perspective, it makes sense for Gmail to bid on the "email" keyword just like everyone else as part of their marketing budget. If they're the top bidder, they get the spot. If they aren't, they don't.

Why wouldn't they just make the ad area one spot longer when they put up one of their ads?

If you're going to be showing another ad, you could show another ad from another company. So, you're still losing that money if you decide to put your own ad there.

This is so stupid in so many levels.

One of the reasons "Bell System" was broken up in to smaller companies because they had overwhelming majority on a technology and they were using their monopoly and power in preventing any real competition in that market.

Google doesn't share the same type of monopoly Bell system did and there's a lot of players in the search and advertising market. As a matter of fact anyone with little cash and a good idea can enter this market anytime they want and Google can't stop them from doing it.

This is also true for Gmail, ad-sense or any product Google has.

MSFT has a bigger market share in Personal computer OS than Google in any market it operates and Microsoft actively conspires against any other company trying to enter their market. They did it with Apple and Linux for as long as I can remember.

Google has done more good for the internet and online-technology and they are the single largest contributer to open-source software than any other company in the world. Why the FUCK would you want to break them up?

There are genuine concerns about privacy, but Google doesn't tie anyone down and they don't hold any monopoly. You can stop using their service anytime you want and there are some very good alternatives out there.

It wouldn't be as easy as breaking up Ma Bell into regional carriers vs long distance because the internet doesn't follow geographical boundaries. It could make sense in some respects to split Google into different companies based on verticals like search, email, apps, mobile, advertising, payments, and enterprise, but even then there aren't clear divisions.

Would Gmail, as a separate company, have to license Google Search technology for inbox searches? And register as an AdSense publisher?

How would Google Search broker a deal to be the primary search engine on Android phones produced by Google Mobile? And would Google Checkout be able to integrate with the app store?

That might be problematic. I was under the impression that most of those "verticals" don't actually make a profit. Adsense is the primary revenue engine for the whole company.

More importantly, it seems a little pre-mature to talk about anti-trust action against Google when they are facing pretty robust competition for pretty much every one of those verticals.

It's just frustrating that they're constantly entering every vertical.

They don't completely dominate and eliminate the competition (in most areas), but they are building an impressive portfolio of acquisitions.

Probably not an anti-trust case... but it's going to be something. And we'll figure out the laws and legislations necessary to regulate it when it happens. Until then I will remain shamelessly paranoid of the company.

What's wrong with it entering 'every vertical'? If they have something to offer it's only good for consumers as they introduce choice by adding a new player to that vertical, it's still a free market. Paranoia alone isn't a solid ground for antitrust allegations.

You're absolutely right, without ad revenue, those other verticals would probably stagnate. And Google needs all those verticals to feed into a central repository so Google can achieve it's ultimate goal of indexing and archiving all of the world's content. Search for the web, Gmail for our email, YouTube for our video, Google Voice for our voicemail, etc.

It seems to me that Google has been much more responsible with their power than other tech titans like Microsoft and Apple (of late). Apple is doing things with iTunes/iP.d/iPhone that would have made Microsoft blush.

Besides, what are you going to break Google into? One profitable advertising company and 30 loss leaders?

It seems too early to me. I know that Google is the leader in several spaces, but I can think of alternatives. If I don't like Gmail, there are other email providers. If I don't like Google search, there's DuckDuckGo! ;) I always thought problems began when a company became a monopoly and there was no real choice (kind of like Windows some years back). Am I wrong?

Gary Reback has recently been involved in the Open Book Alliance, I wonder whether this is part of a larger negotiation that is going on over book rights.

I've been thinking maybe it should be due to its control of advertising, but like the first post its too soon right now. Lets see how the next "boom" cycle in advertising plays out. That being said, I feel if any company should be broken up into baby G's right now it would be Goldman Sachs. I think that would be a great message to the rest of the financial industry.

Google's total stranglehold on effective online advertising for firms with less than $100k to spend is an annoyance to me -- I wish they had some competition.

Google having total, unchallenged dominance of navigation on the Internet: that is a threat. You could swipe the URL bar from all browsers tomorrow and most people wouldn't even notice. Turn off Google for five minutes and the Internet stops. Google's ability to do that to individual sites, selectively, at their sole and unchallengeable discretion, has me go from disquieted to terrified some days.

And how is this Google's fault? That's more incompetence on the part of many users.

Google isn't actively blocking other advertising companies from competing; they're just the winner in a winner-take-all market.

Similarly, Google dominates internet search but doesn't block other companies from offering competing products.

Interestingly, a Google search for 'search engine' does not return Google itself in the top ten results:

http://www.google.ca/search?q=search+engine

Break it up into what? Google has lots of projects but they have a limited product (money making things) portfolio. I don't think many their products would be viable as seperate units.

The privacy policy that people don't like is easy to solve, don't use it. Except for search, there are many other viable products in each space.

I wrote something about this a little while ago:

http://michaelgr.com/2010/02/15/why-google-is-not-like-micro...

It's about how Google has different incentives than companies like Microsoft and Facebook; in short, they have incentives to make their customers happy because for most of their products there's very little friction that keeps users from switching, while others have incentives to create more lock in and bigger walls to keep people from switching. Making customers happy because kind of secondary after you've reached a certain mass with this business model.

You can read Microsoft's take on why Google are a worrying monopoly here:

http://microsoftontheissues.com/cs/blogs/mscorp/archive/2010...

More reasons why I hate MSFT. Lying, unimaginative, opportunistic, unoriginal scum of a company.

Anti-trust is a farce used by politicians against political enemies. No market monopolies exist at all. The only way they are even possible is with government intervention in a market. If you never want to use Microsoft software again that's your choice. If you don't want to use Google that's your choice too. Technology is probably the only example of a free market out there right now and I'd like to keep it that way.

The specter of break-ups plagued the car industry and made them very bureaucratic and now we're paying the price for that. I'd hate to see that happen in technology.

Market monopoly exists. Monopoly doesn't mean sole player in the market, Monopoly means overwhelming share AND control on the market with little to no competition.

Google doesn't have control or overwhelming share in any market they operate. They have large share in some of the markets.

Some good examples of monopoly in market: Monsanto, Microsoft, De Beers, Ticketmaster.

Antitrust lawsuit again Google while the Comcast/NBCU merger goes through?! what bizzaro fucked up scenario is this. If you want to leave Google just put another URL in your browser's address bar and export your data through DLF.

Regarding the search results if you don't agree use another search engine, when looking for someone on Facebook you don't get their MySpace profile also you can't 'socialize' with them unless you have an FB profile, these allegations are ridiculous and probably propelled by other corporation with vested interests.

Google lobbies for net-neutrality for fucks sake, they're not the devil!

Reply on news.ycombinator.com