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Google using search engine to muscle into Internet businesses, study finds

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Wed, Jun 2, 2010 at 6:31 am

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WASHINGTON, DC — Google has been using its dominant position in online search to muscle its way into other Internet businesses, ultimately limiting consumer choice, Consumer Watchdog said today in a report written for its new Inside Google Website.

The nonprofit, nonpartisan consumer group is sending the report to U.S. and European antitrust regulators.

Read the report below.

The Inside Google study found that since adopting “Universal Search,” which favors Google’s properties with prominent listings in its results, traffic to Google’s sites has soared at the expense of competitors. The controversial search practice was launched in 2007.

“Google claims that its search is neutral,” said John M. Simpson, consumer advocate with the group. “This study shows that it’s not and demonstrates the damaging impact Google’s unfair practices have had on competitors.”

Consumer Watchdog will give the Inside Google study, “Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets,” to U.S. Justice Department and European Commission antitrust officials.

The study of Internet traffic data for more than 100 popular websites since 2007 revealed Google’s dramatic gains. In the most comprehensive study of its kind to date, Inside Google obtained three years of Internet traffic data from the respected web metrics firm Experian Hitwise. The data allowed an analysis of Google’s business practices and performance that is unprecedented in scope.

The data shows that Google has established a Microsoft-like monopoly in some key areas of the web. In video, Google has nearly doubled its market share to almost 80%. That is the legal definition of a monopoly, according to the federal courts, which have held that a firm achieves “monopoly power” when it gains between 70% and 80% of a market, the report noted.

The Inside Google analysis found that the most striking example of the power of the Universal Search strategy is MapQuest, a unit of AOL whose market share has dwindled to 32%, down from 57.24% in July 2007. The Hitwise data shows that the stark decline in visits to MapQuest was accompanied by a closely matching rise in visits to Google Maps, as Google put its own service atop all others for generic address searches.

“MapQuest, a unit of AOL, appears likely to soon be reduced from a dominant player in web commerce to an also-ran, due in large part to the steps taken by Google to favor its own locator service,” the report said. “Google is now the now the dominant provider of local search information with more than 51% of the market.”

Google claims that with the introduction of Universal Search, the company was attempting to break down the walls that traditionally separated its various search properties and give “ the very best answer, even if you don’t know where to look.”

The Inside Google study reaches a different conclusion: “The reality is a bit more crass: Universal Search now populates the top of the results page mainly with results from Google’s own product lines. These changes bring the search giant several steps closer to a closed ecosystem where real consumer choice no longer exists.”

The Inside Google Website is part of Consumer Watchdog’s Google Privacy and Accountability Project. The project is intended to open Google’s largely secretive practices to public scrutiny. The report was written by Glenn Simpson, formerly an investigative reporter with the Wall Street Journal.

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To download the report without having to log into Scribd, you can click HERE. Alternatively, you can read the same document embedded in this page below.

Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, Ca. Consumer Watchdog’s website is www.consumerwatchdog.org. Visit our new Google Privacy and Accountability Project website: http://InsideGoogle.com

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This post was written by:

John M. Simpson

- who has written 350 posts on Inside Google.

John M. Simpson is a leading voice on technological privacy and stem cell research issues. His investigations this year of Google’s online privacy practices and book publishing agreements triggered intense media scrutiny and federal interest in the online giant’s business practices. His critique of patents on human embryonic stem cells has been key to expanding the ability of American scientists to conduct stem cell research. He has ensured that California’s taxpayer-funded stem cell research will lead to broadly accessible and affordable medicine and not just government-subsidized profiteering. Prior to joining Consumer Watchdog in 2005, he was executive editor of Tribune Media Services International, a syndication company. Before that, he was deputy editor of USA Today and editor of its international edition. Simpson taught journalism a Dublin City University in Ireland, and consulted for The Irish Times and The Gleaner in Jamaica. He served as president of the World Editors Forum. He holds a B.A. in philosophy from Harpur College of SUNY Binghamton and was a Gannett Fellow at the Center for Asian and Pacific Studies at the University of Hawaii. He has an M.A. in Communication Management from USC’s Annenberg School for Communication.

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45 Responses to “Google using search engine to muscle into Internet businesses, study finds”

  1. Tony Nguyen Says:

    This might be the case in which it’s tempting for Google to indirectly direct traffic to their properties using free useful services they provide. In the case of map listings, it’s under the name of localization of search. But the case is weak, there needs to be more examples. If they got into say pc operating systems, phone os, tablet pc os, and dominate search on all those devices then maybe you got something. It worth a try, lots of companies, industries and countries want to tear them apart. Yet they all use what Google has developed.

  2. brean Says:

    Did you ever TRY mapquest recently?

    The usability is bad, the aerial view don’t give you the chance to really see the selected area properly…

    Marketleadership in the web comes from making good innovative products.
    IF there is a mapservice or any other service coming up which gives more or better features and results to the user – the user will know this instantly by word-of-mouth

    It’s nice that you presenting some statistics, but please try to argue reasonable when interpreting them. And by that I mean knowing the rules of the internet age – your point of view in monopoly is sooo pre-digital.

  3. Tosh Says:

    “your point of view in monopoly is sooo pre-digital”

    +1

    It could have been true for a brick and mortar business, with physical goods and non-zero cost of switching providers.

    We are in an information era. Information gets replicated at no cost, so there’s no way for Google or ANYONE to prevent consumers from knowing about competitors. That’s even more true with our social networks (e.g. FACEBOOK, TWITTER, etc…).

  4. John Stine Says:

    While I can understand concern over this, a far bigger concern is the monopoly of a company such as Monsanto, who appear to hold sway over all three branches of our government. They stand to control what food we eat, and that concerns me more than whether or not aol can stand up to google.

    For the record, I find aol as a company to be utterly lacking in ethics.

    However, the concern over Google’s dominance is valid, and it’s good that it’s been invesitgated.

    (Incidentally, I use mapquest regularly with great success.)

  5. Dan Holeman Says:

    Well, I would like to add that it is wise to make distinctions on the nature of the top of a corporation. The two guys who started it are very conscious and have goodwill toward men and it shows in their company and policies. Most other corporations – especially large ones – do not. hey are greed driven. If you do not know how to tell the difference then let me know and i will explain. What the heck…I will nutshell explain now:
    Dick Cheney = unconscious = believes himself separate from and superior to others and life – (favorite activity in live is killing animals (hunting) for sport!). Thinks only of financial bottom line for today, sick with power and greed disease (Pharmaceuticals can’t find a cure for this disease as they have it and don’t realize it is a disease!)
    Al Gore = conscious = feels and lives the connectedness to all of life, cares about others’ welfare and thinks of future generations.

  6. Old Netizen Says:

    I am an old timer on the web. I remember when Google first came out. A friend of mine told me about this new search engine created by students at Stanford University. They were creating a data system very similar to the Seti Project. Even better there was no advertising pasted all over, most likely from Craigslist no ad mantra.

    I was running a directory for my hometown and received a call from Google asking permission to crawl my web site. The said it would help promote it. I talked with other webmasters that had directories and they were getting on the Google bandwagon. So I got on. For the first few years I was very thankful for the traffic they sent my way. Google even called me again to put their advertising on my pages. Once again that was great. But, then in 2007 things changed.

    I noticed that my traffic dropped significantly. I tried posting a message on their Google groups and Matt Cutts blog to no avail. Google also contacted me that I would have to drop my relationships with advertisers that were also using their network.

    I once again convinced by a Google Ad Rep to change the way my site looked. They even gave me a snapshot of what my front page looked like. I explained to them what my problem and they told me to run their analytic software. Guess what it allowed my competitors to see what pages were doing well on my web site and why. I immediately took it off an used another company.

    This year my website dropped off the chart. Because Google wants to start taking over the local market. I am going to give it one last shot and create a really state-of-art web site. If it does not work, then I may move on.

    The moral to this story is What Google Giveth, Google Taketh Away. I blame myself for falling into their trap.

    One last thing. Those of you that are into SEO and want to know whether content or links are king with Search Engines. I now know for a fact that neither will put you on top if the Google does not want it to happen.

  7. TimR Says:

    Google motto: Don’t do evil… unless there’s a ton of money to be made.

  8. Rick Says:

    Mr. Simpson, you might want to check out these links below. G. appears to be now creating monopolies, crushing the little guy.

    http://www.webpronews.com/node/55554/talk#comment-129099
    http://www.webmasterworld.com/google/4188730.htm

  9. Clint Nein Says:

    Hi there, just became aware of your blog through Google, and found that it is truly informative. I’m gonna watch out for brussels. I will be grateful if you continue this in future. A lot of people will be benefited from your writing. Cheers!

  10. Victor Says:

    Google just wiped out my whole business. I have always followed their rules and never did anything shady. All I have right now is a message in the webmaster tools saying that my site doesn’t meet their guidelines. They don’t even say what their problem with my site is!!! They just removed all the pages from the index! There is a link to file a “Reconsideration Request” but others say they don’t respond nor do anything about it. That is irresponsible! I hope the government breaks up that monopoly! 10 years of hard work wiped out overnight! The abuse has got to stop!

  11. Bankruptcy lawyer Says:

    If it was any other company than the almighty Google, this would not slide and they would be found guilty. Of course, I’m sure the fact that Google regularly shares information with the government and law enforcement, had no swaying bias as to whether they were going to be accountable for this malicious wrongdoing. Just because you forget to lock your car doors, doesn’t make it okay if I come and steal your car

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