Google may be facing its biggest challenge yet.
The Wall Street Journal reported the U.S. Federal Trade Commission has begun an investigation into whether the search titan has unfairly used its dominance to squash the competition.
Unlike recent investigations into Google from the Justice Department, as well as the FTC over the company's acquisitions, the latest challenge will examine the company's business practices as a whole, suggesting it will be a broader-based inquiry into the core nature of Google's business.
With $30 billion in annual revenue, Google practically maintains a sovereign hold over search advertising, a dominance that is growing even as Microsoft pours development and promotional dollars into its search engine, Bing, which now provides the technological underpinnings of Yahoo search. According to research firm eMarketer, Google owns 75.2% of search-advertising dollars, compared to Microsoft's 10.8%, and it is projected to claim a bigger piece in 2012 with 76.6%.
While the FTC has been actively reviewing and pursuing digital companies lately, this latest look into Google appears to be designed to set a new standard for how companies may be allowed to operate in the digital sphere altogether. Does Google favor its own products and services in natural search results? Does it use its dominance in search to unfairly compete in other realms?
The battle for search dollars was fought and won long ago -- by Google -- and now Executive Chairman Eric Schmidt sees a post-PC "platform war" between companies like Google, Apple, Facebook and Amazon, all with particular strengths and ambitions to lock consumers into their own particular ecosystems.
The road ahead looks a lot like what Google's longtime rival Microsoft went through more than a decade ago. Perhaps girding for this future, Mr. Schmidt stepped down as CEO to focus exclusively on external and government relations, including competition inquiries in Europe and now the U.S.
Even if Google manages to come out unscathed from the audit, it will have to expose its inner workings via the trove of documents the FTC has requested. That much data is sure to leak into the public realm. Any antitrust examination will take years, and the FTC will most likely field a smaller team of lawyers against Google, which retains huge ranks of the top legal talent.
Indeed, the Mountain View, Calif.-based company is no stranger to government scrutiny. Google, which is flush with cash, has been on an acquisition binge over the last few years, and all of its deals have passed regulatory muster, including its $700 million acquisition of ITA, the world's largest airline search company, as well as its $750 million purchase of mobile advertising network AdMob and its $3.2 billion deal for DoubleClick in 2007. Most recently, Google acquired ad technology startup Admeld for $390 million, which the Justice Department plans to review.
FTC spokesperson Claudia Farrell said the agency "could neither confirm nor deny that there is an investigation." Google representative Mistique Cano said the company has no comment on the matter.
Conversion marketing isn’t just a trend or tactic. It’s a fundamentally new way to approach marketing -- yet it’s based on the most timeless of principles: that the key to success in business is to drive sales today, while building stronger brands for tomorrow. Brought to you by Catapult.Learn more