John Paczkowski

Recent Posts by John Paczkowski

DOJ Taps Google as New Microsoft

Congratulations Google (GOOG), you’re the new Microsoft (MSFT). And we have that on no lesser authority than the U.S. Department of Justice.

Google is the new empire. The new Borg. Aggressive. Efficient. Assimilative.

Feared.

And lest there be any doubt of that, consider the DOJ’s comments Wednesday on the dissolution of Google’s proposed advertising partnership with Yahoo.

Yahoo! Inc. and Google Inc. abandoned their advertising agreement after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the implementation of the agreement. The Department said that, if implemented, the agreement between these two companies accounting for 90 percent or more of each relevant market would likely harm competition in the markets for Internet search advertising and Internet search syndication.”

Google abandoned the deal not because pressing ahead with it “risked” a protracted legal battle, but because it guaranteed one. The DOJ was going to sue to block the pact. And while the agency says its abandonment eliminates the need for an enforcement action, it hasn’t really alleviated its concerns over Google’s domineering presence in the market for Internet search advertising. If anything, it’s heightened them.

The Department’s investigation revealed that Internet search advertising and Internet search syndication are each relevant antitrust markets and that Google is by far the largest provider of such services, with shares of more than 70 percent in both markets.”

Internet search advertising and Internet search syndication are “relevant antitrust markets.” In other words, they’re natural monopoly businesses.

And, according to the DOJ, Google is their presiding monopolist.


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