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Wednesday, October 22, 2008

Feds May Block Google's Future Expansion Efforts

google versus the department of justice

Established leaders  usually survive the economic storms that wipe out smaller competitors, and as every business struggles through the rough economy, leading corporations, such as Google, can become easy targets for criticism.

Through the eyes of Google's enemies, the fat cat is getting fatter due to everyone else's misfortune. Dwindling profits in offices across the country have led many advertising executives to opt for Google's search ads rather than banner ads. To some small business, that marketing shift  to Googleequals an unfair advantage.(71% of search advertising revenue according to Emarketer.com)

In simple terms, as Google's dominance expands, their public reputation decreases.

Greg Sterling, a search market analyst with Sterling Market Research,explained Google's growth dilemma to Forbes.

Google's biggest barrier may become government intervention.The dilemma for Google now is how it will continue to grow. It may benefit from the weakness of its competitors, but it will have to avoid incurring the wrath of the Justice Department.

Remember when Microsoft faced U.S. District Court Judge Thomas Penfield Jackson in the 1998 case, United States v. Microsoft? Bill Gates' company was labeled a monopoly and accused of "anti-competitive business practices" because it bundled Internet Explorer (and other software) with Windows' operating systems. A settlement was eventually reached and in 2002, when Microsoft started to share its API (Application Programming interfaces) with third-party companies.

Following the landmark case, Simpsons' producer Matt Groening poked fun at Gates and his reputation for "eliminating" competition.

 

The U.S. vs. Microsoft case was initiated by a group of civil actions filed from the Dept. of Justice and 20 different states. Imagine the number of states that could pile on the anti-Google bandwagon. I believe it's only a matter of years before we see Google facing similar accusations that Microsoft fought ten years ago.

By Matt O'Hern at 03:50 PM | Comments (0)

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