The Senate Judiciary Committee is holding Antitrust hearings on Google today and Google chairman Eric Schmidt is in the hot seat taking questions under oath. The hearing is under way right now (you can watch it here). The main question the Senate hearing is trying to answer, says committee chairman Senator Patrick Leahy (D-Vermont), is whether “Google is in a position to determine who will succeed and fail on the Internet.”
Google’s dominance in search and search advertising (with estimated market shares of 65% to 70% in search, 75% in search advertising, and 95% in mobile search) puts it in the antitrust crosshairs. Schmidt opened his remarks by assuring the Senators, “We get it.” He cautioned them not to confuse Google for its historical predecessor, Microsoft. “Not all companies are cut from the same cloth,” he said. Nevertheless, the hearing set out to determine whether Google is using its dominance in search to favor its other products (such as Google Places, Shopping, Maps, Android) over those of its competitors.
During the hearing, some of the most gotcha questioning came from Senator Michael Lee (R-Utah). He put up a chart from a study comparing Google Product Search result rankings to those from product-comparison sites including NextTag and PriceGrabber. While the results from the competing sites were all over the map, Google Product Search results consistently came up as the No. 3 result in all cases. “You’ve cooked it so you are always third,” Lee accused Schmidt. “Senator, I can assure you we have not cooked anything,” Schmidt responded.
Schmidt tried to explain that Google Product search is different than a product comparison search in that it brings up results which link directly to those products rather than to page comparing that product to others. The bigger point Schmidt was trying to get across is that Google is different now than it was ten years ago when all it was trying to do was send people away from Google by providing the best ten links to other sites. For instance, Google puts up universal search results at the top of the page for a variety of searches where it thinks consumers want a particular answer such as a stock price, a map, or place information.
The best answer “ten years ago might have been the ten links,” says Schmidt. “But today it might be to algorithmically compute an answer. Speed matters. If we can calculate an answer more quickly, that might be better for the consumer.” But is Google discriminating against other sites when it points people to its own products instead of elsewhere on the Net? Schmidt says that it is not.
However, he was not as convincing as he could have been. After listening to his answers, Senator Al Franken (D-Minnesota) stated, “I am skeptical of big companies that control both information and distribution to that information. Your incentives shift and people have reason to worry that you won’t play fair.” Noting a slight hesitation from Schmidt before answering a previous question about whether all of Google’s results reflect an unbiased algorithm, Franken railed against him, “We are trying to have hearing here about whether you favor your own stuff, and you admittedly don’t know the answer.”
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...
Google founders Larry Page and Sergey Brin recruited Eric Schmidt from Novell, where he led that company’s strategic planning, management and technology development as chairman and CEO. Since coming to Google, Eric has focused on building the corporate infrastructure needed to maintain Google’s rapid growth as a company and on ensuring that quality remains high while product development cycle times are kept to a minimum. Along with Larry and Sergey, Eric shares responsibility for Google’s day-to-day operations. Eric’s Novell...