Google's Board Game: Monopoly!

Summary
In the face of claims by US government agencies and others that it has a monopoly on Internet online advertising, Google has responded that it is actually quite small. Christine Varney, the soon-to-be President Obama’s antitrust chief, claims that the Bush administration was extremely lax against monopolies. To fit the “change” platform of the Obama administration, they will take a more hard-line approach to Google’s monopoly. Google has countered by hiring former US Department of Justice antitrust lawyer Dana Wagner, who has helped to formulate Google’s argument to advertising clients, public officials, reporters and other forms of media to remove all indications of Google monopolizing the search advertising business. Moreover, Google claims it only has a 2.66% share of the advertising market. Surely as more claims and antitrust reviews are made, Google will be bigger efforts to dwarf the perception of its market dominance.

Connection: Monopoly
The obvious connection between Google and Chapter 10: Industrial Organization in Canada is the issue of monopoly. As cited in antitrust reviews and claimed by US government agencies, Google may very well have a monopoly on Internet online advertising. If taken to court and legally designated as a monopoly, Google will face many domestic and international challenges, as Microsoft did when it was declared to have a monopoly. If determined a monopoly, business decisions, endeavours and pursuits, and acquisitions will become increasingly difficult with the resulting interventionist competition policies. In short, being labelled a monopoly can only result in trouble because believers of the free market system will stress competition law problems. In Google’s defence, online search advertising is only a small portion of the entire advertising market, which includes newspaper, television, radio averts, junk mail, highway billboards, etc. However, in order to pin Google as a monopoly, critics and the US government alike will stake Google’s primary market as that of Internet search advertising. In order to avoid being deemed a monopoly, Google must continue to downplay its size and share of the advertising market.

Reflection
Whether or not Google has a monopoly on Internet online advertising is entirely dependent on our definition of Google’s main market. If we say it is purely online search advertising, Google holds a clear monopoly. If we say it is encompassed by the entire advertising market, Google holds a minuscule portion of the market. Regardless, Google has not abused the power in its monopoly nor has it unjustly raised its prices. As a student, I do not find myself particularly strained or stressed over Google having a monopoly on the search advertising business. In fact, a monopoly does a wonderful job in simplifying matters on the Internet. Google has essentially created a product so simple, easy to use and efficient that the majority of Internet users take advantage of it. Google’s pitch is ultimately its convenience, which will have its users continue using Google even if it is deemed a monopoly. This situation is very similar to that of Microsoft’s in that it was essentially designated as a monopoly because of its efficacy. While users can use Yahoo! Search engine or Ask.com, they choose to use Google. While users can use Linux or OpenSolaris, they choose to use Windows. Can you blame either company for its product’s popularity? In any case, Microsoft has brought a real contender in “Bing” to challenge Google.

Link:http://www.washingtonpost.com/wp-dyn/content/article/2009/06/06/AR2009060600056.html