What a Tangled BigBiz Tech Web We Weave

First we all disapproved of Microsoft and they went down. Now it’s Google’s turn….and guess who it blames?

Google is under siege in Washington like never before — and it says an “anti-Google industrial complex” is to blame.
In an interview with POLITICO, a Google spokesman argued that a cabal of antitrust lawyers, lobbyists and public relations firms is conspiring against the Internet search giant. The mastermind? Google says it’s Microsoft.

Hm. U.S. Steel or Standard Oil? Who to choose?! Oh, but there’s more.

In the 1990s, Microsoft was the tech industry wunderkind that got too big for its britches — and Google CEO Eric Schmidt, then an executive at Sun Microsystems and later Novell, helped knock the software titan down a peg by providing evidence in the government’s antitrust case against it.
The constraints imposed on Microsoft in that case helped clear the way for Google’s rise to rule the Web. Now — as Google spreads its tentacles into everything from mobile phones to digital online libraries to green energy — some of Microsoft’s allies are saying it’s time for the search giant to get its comeuppance.

Ah, so competitors to Microsoft used the government to help “even the playing field” to such a degree that another company–Google–emerged and became so successful that now their competition wants to do the same thing. Not saying there aren’t legit concerns, but see what happens when government gets involved? Meet the new boss, same as the old boss? In more ways than one:

Google officials say they’ve learned from Microsoft’s mistakes. That was one reason the company opened an office in Washington in 2005, only a year after it went public. The company’s spending on lobbying climbed to $5.1 million last year, edging closer to Microsoft’s $7 million.
The company has hired its share of consultants, lobbyists and attorneys, too….In fact, three years ago, Google brought in some hired guns to try to persuade regulators to prevent the proposed merger between Microsoft and Yahoo — a partnership devised to counter Google’s dominance in search. Google lined its bench at the time with Jamie Gorelick, a Clinton-era deputy attorney general, and public relations firm Chlopak Leonard Schechter — in addition to the Washington veterans the company already had on retainer, such as the King & Spalding law firm and the Podesta Group.
Yahoo rejected Microsoft’s bid but settled for a search and advertising partnership last year that the DOJ approved, saying it would increase competition to Google.

The thing is, Google would have probably beat Microsoft without all of the histrionics: it really was a better search engine after all. Further, caught in an old business plan–desktops, OS’s, etc.–Microsoft was blindsided on many fronts of the internet revolution, not just search engines. Then there’s Apple. Wonder why no one’s brought them to court yet due to there ubiquitous domination of the music download market?
ADDENDUM: Here’s why we like have commenters: First “Mangeek” takes the Politico article (from which I pulled the above selections) to task.

How was Microsoft ‘knocked down a peg’? They had virtually no action taken on them as a result of the antitrust case. See this: en.wikipedia.org/wiki/United_States_v._Microsoft#Settlement
Google’s ascent wasn’t at all related to the antitrust case. Microsoft is a technology -follower-, they didn’t even have a search engine before Google.

Then “Dan” provides a little direction re: “monopolies”:

There are some good EconTalk episodes on the subject of antitrust law in the US with attention paid to many past “Monopolies” that ended up vanishing off the face of the earth through simple competition without any intervention whatsoever.
www.econtalk.org/archives/2009/12/winston_on_mark.html
www.econtalk.org/archives/2007/10/boudreaux_on_ma.html

To my re-reading, both have mitigated some of my nebulousness on the above. Thanks, men.

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mangeek
mangeek
10 years ago

“helped knock the software titan down a peg… in the government’s antitrust case against it.”
“The constraints imposed on Microsoft in that case helped clear the way for Google’s rise to rule the Web”
How was Microsoft ‘knocked down a peg’? They had virtually no action taken on them as a result of the antitrust case. See this: en.wikipedia.org/wiki/United_States_v._Microsoft#Settlement
Google’s ascent wasn’t at all related to the antitrust case. Microsoft is a technology -follower-, they didn’t even have a search engine before Google.

Dan
Dan
10 years ago

The public perception of US antitrust law is a complete fantasy. In reality, there is no evidence of monopolistic output-lowering behavior from firms, there is inconsistency and constant revision in the case law, and there are gaping problems with the nebulous concept of market power (give me any product and I will show you how you can change the market size to demonstrate >99% or <1% market power).
People mostly fear "bigness" and equate it with monopolization, but it's simply not true. Anyone who has worked at Walmart, "The US Monopoly" according to progressive-types, knows that the reason they are so successful is because they are ultracompetitive within the market and run every store on the premise that they could be driven out by competitors at any moment. Really they are more like the anti-monopoly. Then we have cases like Microsoft where just because they were the biggest show in town at the moment, people made hysterical assumptions about their market power. Reality then demonstrated, as it does time and time again, that especially in tech fields, the market is far more dynamic than the US government gives it credit for. Here today, gone tomorrow.
There are some good EconTalk episodes on the subject of antitrust law in the US with attention paid to many past "Monopolies" that ended up vanishing off the face of the earth through simple competition without any intervention whatsoever.
http://www.econtalk.org/archives/2009/12/winston_on_mark.html
http://www.econtalk.org/archives/2007/10/boudreaux_on_ma.html

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