You might think the cool cats at Google Inc. can afford to relax.þþWith almost $20 billion in the bank, and a virtual license to print more by selling search advertising on the Web, what's to worry about?þþMicrosoft? It's on the move again, but no immediate threat to the core business.þþYouTube? Google doesn't need its acquisitions to make money right away.þþWhat worries Google is the same legal bear trap that has snared other corporate giants dominating an important facet of technology. In the tech world, antitrust litigation is the punishment reserved for those who are too successful for their own good.þþJust ask Bill Gates, who fought a prolonged battle with antitrust regulators around the world.þþAs it stands, it's difficult for anyone to compete with Google in Internet search ads. To government trustbusters, that could be a problem worth worrying about.þþGoogle's ÿelectronic strangleholdÿ is akin to the market position held by the Sabre and Apollo air-travel reservation systems, which came under fire in the 1990s, said Eric K. Clemons, a professor at the University of Pennsylvania's Wharton School.þþThe market is paying near-monopoly prices for the keywords behind sponsored search, he said, raising costs for hotels, airlines and other businesses that need to protect their trademarks online.þþIn addition, Google uses its vast war chest to provide ÿanti-competitive subsidiesÿ for new businesses such as the free Google Apps -- an emerging competitor to Microsoft Office. ÿIf Microsoft had given out a free PageMaker to compete with Adobe, it would be broken up,ÿ Clemons asserted.þþSo far, Google's antitrust problems have been small -- an effort to scan books into the Internet has raised questions, as did this week's purchase of the AdMob mobile advertising firm. Nothing too threatening has emerged -- partly because of its populist image as a friend to the consumer providing a ÿfreeÿ service, Clemons said.þþIt only looks free, he contended. ÿThe parties most visibly damaged by Google are businesses,ÿ he said. ÿGoogle is allowed to damage the competition, price below the market and cross-subsidize like Microsoft wouldn't be allowed to do.ÿþþNo surprise, Google sees it much differently. In a meeting with the Chicago Tribune's editorial board this week, Google executives spent more than an hour explaining why the company has nothing to worry about.þþÿWe don't really think there are serious antitrust concerns,ÿ said Matthew Bye, competition counsel at Google. ÿIf you're doing things that benefit your users, it's hard to find an antitrust problem.ÿþþStill, the company recognizes the potential for a ÿGoog-zillaÿ backlash. Just as Microsoft, IBM and Intel before it, ÿwe are now going through a rite of passage,ÿ said Adam Kovacevich, a Washington-based Google spokesman. ÿWe are facing more scrutiny on the question of competition and antitrust.ÿþþTo hear Bye tell it, those questions all have legitimate answers. The idea that airlines and hotels pay too much because of anti-competitive practices is a nonstarter, he said. ÿWe don't really perceive any issue.ÿ In its keyword auctions, he said, ÿWe don't really set prices.ÿþþAs for funding new ventures that compete with established ones, the goal is to expand Internet use to help every company, said Brian Fitzpatrick, a Google engineering manager based in Chicago. ÿIf we can get more people to use the Internet, we make more money. We worry about monetizing after the fact.ÿþþAnalyst Meggan Friedman at William Blair & Co. in Chicago views antitrust as a relatively low risk for Google. She's more focused on how the youthful company invests its vast capital. And even with potential issues ahead from net neutrality regulations or government privacy concerns, Friedman maintains an ÿoutperformÿ rating on the stock. þþGoogle is recovering earlier than other media from the economic downturn, reflecting how search advertising has proven resilient even when marketing budgets were cut, she noted. ÿThis really has solidified the importance of it.ÿþþ
Source: Chicago Tribune
