“Yelp is just jealous”: reflections on the Anti-Trust Case against Googleby ThomasStone on Sep 29, 2011 • 6:00 am 5 Comments
There’s been a lot of controversy lately around the issue of Google’s supposed monopoly over the Search Engines and thus–by a deductive extension that I’m not sure is warranted–of all internet traffic and thus a large portion of the American economy (a deduction which is statistically warranted). To investigate this matter Eric Schmidt appeared for a hearing before congress last week where–in a kind of hilarious show-trial–members of that institution scrutinized Google’s stance toward competition in the marketplace.
While the average citizen might have many valid concerns about Google’s operations and ambitions, I think that Eric Schmidt’s testimony, not to mention Google’s track record, amply demonstrates that ‘anti-competitiveness’ should probably not be among them.
Companies like Microsoft, Yelp and Expedia accuse Google of stifling other companies by rigging the rankings, and displaying them lower on the SERP than businesses or pages in which Google has a vested interest. Google is accused of starting competing businesses when smaller companies won’t sell out (which is true enough, but not illegal if the first allegation isn’t true).
In response to these allegations, the FTC is currently investigating Google to determine they are, in fact, in breach of anti-trust laws. But what many bystanders have failed to take into account is the amount of assistance Google provides to businesses that would not otherwise have a chance of competing. This was a big part of Eric Schmidt’s defense in his testimony before congress last Thursday.
In response to a question from Chuck grassley about an hour into his hearing, Eric Schmidt said:
“We are in the ranking business…so for every winner I am satisfied that the vast majority of small businesses are extremely well served by our approach. If anything, our approach promotes and enhances small businesses over large businesses, because it gives them a role that they would not otherwise have because of the way that the algorithms work.”
By placing emphasis on local searches, Google gives small businesses the ability to compete directly with large brands. Further, the app industry that has grown up around Android, the world’s most widely used smartphone operating system, gives smaller developers a chance to compete with major firms while Google’s PPC system, whether administered through the AdWords dashboard or via demand side platform, allows small businesses to show up on search results pages where their organic growth might not allow them to compete with large businesses. Finally, with Google’s PANDA update, the company has made it clear that it values influential, worthwhile content and that sites and businesses that contribute to the Internet at large will find it easier to rise to the top of search results.
Local Search: Local Businesses vs National Brands
With traditional advertising, local businesses often have trouble competing with national brands, making it difficult for them to broadcast their services to potential customers in their area. The fact that national brands have larger advertising budget and a better ability to penetrate into television and other traditional media outlets gives them an unfair advantage. None of this matters, however, when it comes to local search. The SERP provides a level playing field where the only concern is what results will best serve the consumer. When a user searches for a service in their city, the Google map result shows all locations that provide that service, regardless of the size of the company that provides it and when Google merged Place results with organic results in the fall of 2010 that gave many local businesses the boost that they needed to survive in a tough marketplace. More to the point: it was good for consumers. Consumers were better able to find what they actually wanted, rather than just finding out which companies had the largest advertising budget for whatever keyword phrase they’d typed in.
“How would you encourage competition?”
When Eric Schmidt was asked this question during his hearing last week, he brought up the competitive terrain that Google has opened up on the Android’s OS.
At this point, Android the most widely used smartphone operating system globally, overwhelming even Apple’s iOS. Due to this fact, an industry of has sprung up made up of developers who are designing apps for use on Android devices. The Android app marketplace lets small, independent development shops to sell their apps alongside huge companies for similar prices. If a company creates an app that’s engaging or has high utility for the user, it is likely become just as popular as a ‘big company’s’ app that is less smart or useful. This gives indie developers a chance to compete with large companies on a level playing field.
PPC: Token Entry into a High Stakes Game
Many companies can’t afford massive marketing campaigns or don’t have the time or knowledge required for extensive digital ad placement. Google helps simplify the process, though, and makes pay per click (PPC) advertising accessible to even the smallest businesses. AdWords Express provides an easy-to-use interface that can help a business owner who doesn’t even have a website build an affordable PPC campaign tailored to their business and location. Additionally, AdWords Express users’ Google Maps pins will show up in blue, helping them stand out from the crowd.
After the PANDA update, Google showed that it cares more about content and what people are saying about a website than it does the amount of money the business has behind the website. The spectrum of information available on the internet, including consumer reviews for example, can have a dramatic effect on a website’s ranking in search results pages. Those who provide rich, informative and useful content and impress their customers enough to receive glowing reviews will rank higher.