Thursday, June 30, 2011

Google & Microsoft: A curious case of trust deficit

NEW YORK: The antitrust probe into Google invites comparisons to the case against Microsoft. 

But however easy the links are to make, many are also facile. The most significant resemblance between the two situations may be their outcomes. 

Google is seen in some circles to be using its dominance in one area to muscle unfairly into others, as Microsoft did. There's even some similar nerdish arrogance. Microsoft founder Bill Gates was famously testy about being deposed by the powers that be. Google's Eric Schmidt and Larry Page recently declined a request by a US Senate subcommittee to testify. 

Yet the prosecution's case against Microsoft was relatively simple. Windows held about 95 percent of the market for PC operating systems in the late 1990s. Microsoft forced computer makers to use its Internet browser if they wanted to sell machines running Windows. Customers were constrained. Downloading a rival browser wasn't easy and switching to a machine not running Windows was painful. 

Add it all up and Microsoft had a monopoly, abused its position and government intervention was the only immediate cure. 

Google's situation is more complex. The firm claims only about two-thirds of the US search market, and its share is increasing slowly. Rivals also accuse Google of putting its services first. For example, its own maps might turn up in search results. But customers can easily use other search engines or type in a website address directly, and search doesn't appear to be a utility in need of regulation. 

Smartphones could make a more compelling study. More than a third are now powered by Google's Android, according to comScore, and the figure is growing quickly. 

Apps are a potential way to lock in consumers. Withholding the system's latest version from handset makers that favor a rival's services could be a potent stick for Google to wield. Yet its current market share should preclude any immediate challenge. 

Though the Microsoft case was simpler, it still took over a decade to resolve. And the most important result was the company pledging to restrain itself. 

The Google probe could uncover most anything, but for now the tortuous path and the end result are starting to look like they might be the real kinship to Microsoft.

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