Google

Seems Google CEO Eric Scmidt is having his own "Nixonian" moment in a very informative interview in Business Week which accompanied the recent Business Week cover story: "Is Google too Powerful?" 

• Just as former President Nixon protested to loudly in saying "I am not a crook!", Google CEO Eric Schmidt appears overly defensive in questions about Google's dominance:
• In response to the question: "Some people feel Google is now or potentially could become too powerful in that it has such a sway over where people go online. People worry that Google could become the gateway... "
• Schmidt responded defensively: "I disagree with essentially every half sentence here..."
• Schmidt's "Nixonian" problem is that Google's behavior and reality are spawning this perception.
• "People" aren't picking on Google, they are hitting on a chord that resonates with everyone.
• "People" know Google is too powerful because it routinely behaves as the "divine king" or "emperor" of the Internet in how they treat people.
• When they trample on and profit from other people's property, they never say they were wrong, or offer an apology, -- they only bribe people to be quiet and go away. Google euphemistically calls these bribes -- "partnerships."
• Google is another example of the old adage: "absolute power corrupts absolutely."
• Google's real problem is not that people "percieve" that Google is too powerful, but that it "is actually" too powerful and it routinely behaves in the marketplace in such a way that everyone knows it. 

Let me expose as bogus, Mr Schmidt's core defense of why Google is not too dominant.

A group of liberal activists today announced yet another Save... Coalition -- this time a new "Save our Spectrum coalition" that seeks to impose net neutrality on winners of the FCC's upcoming 700 MHz auction.

• What we really need is a "save the taxpayer" coaltion to protect Americans from bogus social engineering and corporate welfare ideas like net neutrality.

Ironically, these liberal activists want to totally ignore the law, a spectrum auction law that was passed in 1993 by an all Democratic Government!

It seems there is more trouble brewing in the eerily quiet ItsOurNet coalition of online giants who are promoting net neutrality legislation.

• One of ItsOurNets' primary funders, IAC's Ask.com, is calling the lead member, Google, an "online information monopoly" in the UK. Ouch!  

Today's WSJ article "Ask.com's Revolt Risks costly clicks" highlights a guerilla ad campaign that Ask.com is running in "London subway cars exhorting commuters to "stop the online information monopoly."" 

A great editorial in the European WSJ, "Net Loss" by analyst Alec Van Gelder, alerts us to the potential for regulatory creep to occur in the European Union (EU) and how it relates to the U.S. net neutrality movement.

• The EU has never met an economic regulation they did not like; that's because the very nature of the EU systematically subordinates individual country's economics to the EU's over-arching imperative of the socialization politics of unity.
• The EU is a political union that forces economic standardization through regulation.

This fine WSJ piece alerts us to some potentially troublesome developments in the EU: draft laws are due this July on the EU's "standardization policy for the information and technology sector."

• The EU mantra of standardization, socialization, and politicization of economics is exactly why the EU is routinely hostile to U.S.-style capitalism and competition that has made our economy the envy of the world for decades.
• In the EU, socialization politics are supreme not economics, freedom, competition or innovation.
• This Government-solution orientation gives the EU a natural and scary bias toward net neutrality.

Now it will become more clear why I wrote the commentary "America's Unique Internet Success" in the Washington Times last month.

National Journal's Tech Daily had an interesting article today reminding us that there is yet another dimension to Google's untrustworthy business behavior.

• "Rep. Brad Miller, D-N.C., wrote a letter Friday, demanding an explanation as to why Google had replaced recent photography with images depicting the region before it was devastated by the hurricane.
• Miller spokeswoman Luann Canipe said: "The congressman's concern is that it was fundamentally dishonest. Certainly the most basic question is, 'Did someone ask you to change the maps and if so, who was it?'" "

What is important here is this is just part of a well documented history and pattern of Google not doing the right thing and making a mockery of their double-negative corporate motto: "Don't be evil."

SaveTheInternet's Free Press arm and other liberal advocacy groups are going to ask the FCC to impose net neutrality on the winners of the upcoming 700 MHz wireless auction, according to Tech Daily on 3-30-07.

• While I guess I have to give these groups credit for their persistence, they are basically spitting into the wind on this one.

Less than two weeks ago, the FCC unanimously voted to classify wireless broadband as an unregulated information service which pratically means that net neutrality does not apply to wireless broadband.

The Fiber to the Home Council has produced a great new flash video highlighting the "Exaflood" of data that is literally flooding the Internet requiring it to be upgraded.

• Don't miss this four-minute, very-informative flash video.
• It helps the average person to make sense of all the changes on the Internet and how they all add up to one big thing:
• that Internet capacity needs to increase BIG TIME and fast!

Its a great problem to have.

• The need to constantly upgrade, build-up and build-out the Internet is a great testament to the Internet's ever-increasing value and dynamism in everyone's lives; and it is also a testament to the competitiveness of everything Internet.
• Anything good deserves investment to protect it and improve it.

Why I like the flash video so much is that it persuasively spotlights how vibrant and healthy the Internet is today.

• Net neutrality proponents are really missing the boat here.
• They are hysterical that the only big Internet issue is net neutrality -- preemptively solving a non-existent problem.

If net neutrality proponents were more responsible they would also be focused on solving real (not hypotheical)  ongoing problems that are critical to every user every day, which is how to increase the Internet's capacity so that it can continue to operate as it has or better.

The Bottom line: Net neutrality proponents are missing the proverbial forest for the trees.

Business Week's cover story is: "Is Google too Powerful?" is exactly the question a major publication that thinks ahead should be asking. 

Business Week has done everyone a favor in posing this cover question because it will get folks looking at Google in a new way -- as the dominant antitrust concern of the market place in the decade ahead, like Microsoft was in the 1990's, AT&T was in the late 1970s/early 1980s and IBM was in the 1950s.

Mark my words, the words "Google" and "antitrust" will be heard much more frequently together -- in the years ahead -- as Google has gone from 35% to 50% market share today in a couple of years and is on path inexorably towards 60-70% share in the next few years.

• This means that the Google "audience" already the largest in the history of the world, at almost a half billion people, is on path towards a billion people worldwide in just the next few years.
• That unprecedented concentration of power in the "all-content" market is enough to give anyone the willies.
• Why the word antitrust will be used more and more concerning Google is also that Google is extremely aggressive and arrogant in buying market share (Dell, AOL, Myspace, YouoTube etc.) and is pursuing many market strategies that have the ancillary benefit of destroying many of their potential competitors business models.
• Google can gloss over their behavior for now, but evidence of their potentially anti-competitive strategies will grow and the already huge chorus of injured parties will grow to a deafening roar in the years ahead.    

While it is clearly debatable if Google is too powerful today...

I sincerely hope that everyone who cares substantively about the net neutrality issue, on either side of the debate, reads the new 2-1/2 page "Economists' Statement on Network Neutrality Policy" by the AEI-Brookings oint Center for Regulatory Studies.

• This joint statement is a brief and easy read,  and is among the clearest, most reasonable, and value-added statements I have seen on the subject.
• It should not be surprising then that it is written jointly by some of the best and most respected regulatory economists in the country.

We are still waiting to read a cogent, well-reasoned and supported piece of work that supports the policy of Net neutrality. All we have gotten is assertions, hypotheticals --virtually no facts or analysis from the other side.

The NYT lead business article on Google entering radio advertising, "The Ad Search, Offline" is a shining example of the theme in my recent blog "Google-YouTube: What's really going on."

• Google is not negotiating with content networks as a "friendly partner" but is a clever competitor sneaking in to disintermediate content-networks from their customers.
• Broadcasters need to realize Google is their competitor, not their ally.  

I got the "fox in the henhouse" title for this blog from the last quote in the NYT article: