Google has faced criticism in Europe about everything from privacy to tax policies, and has wrestled with a European court ruling that required it to remove links from search results.
In 2014 there was talk about Google abusing its advertising monopoly in Europe. The tech giant has 68 per cent of the search market in the US and more than 90 per cent in many European countries. This prompted calls for Google to be “broken up”.
Joaquín Almunia, Europe’s former competition commissioner, negotiated a settlement which required Google to give more prominence to rivals’ shopping and map services alongside its own in search results. But his predecessor prefers to handle things in court and has reportedly started preparing a Statement of Objections. If found guilty of anti-competitive behaviour, Google will be facing a hefty fine.
However, it’s been suggested that all technology monopolies eventually topple and Google may be next in line as Facebook allegedly eats into the company’s advertising revenue. It has also been noted that unlike Microsoft’s 90 per cent share of the PC operating system market, which seems to have stood the test of time, Google’s share of the market has fluctuated.
Google has also recently made numerous moves which made it look as if the company had lost the sharpness it is reputed for. An example of this is Google’s failure to secure deals with Apple and Mozilla Firefox to be the default search engines for those browsers.
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But behind it’s acquisitions, some slated for having nothing to do with the main company’s search focus, a long-term plan to gradually regain advertising ground may be unfolding.
“If it had retained the deals with Apple and Mozilla then the company would have around 75 per cent of the search market for desktops – easily enough to reawaken the ‘monopoly’ calls from the US and European markets,” said author John Straw. “So it would seem that losing those deals is good PR for Google.”
Straw suggested that “underperforming” Google stock has allowed the company to deflect strategic critics by “simply stating that the market reflects its performance not government”.
Google is spending vast amounts of money in new data centres. In 2014, Google Ventures, it’s VC arm, had 16 exits and made a record number of investments. Among them was the $3bn acquisition of Nest, which looked cheap given Nest’s opportunity to own the home automation market.
“You need to look at the longer term efforts to grow the advertising market,” Straw explained. “By investing heavily in life sciences (36 per cent of its investments from Google Ventures) Google would like to help us extend our lifetimes. This way they can expose us to more advertising. Then there is Google Driverless cars. If we all spent the average 60 minutes in a car hunched over a tablet and being exposed to Google ads, it grows the market.”
He is, however, aware that it’s not all perfect surfing for Google. Straw suggested that Facebook is proving to be a tough competitor and is “virtually guaranteed to bring out a deep learning powered search engine” in the next two years.
When you piece it all together the future looks more rosy for the data company.
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