[Corp. Watch] Study: Google search dominance used to marginalize competitors

[Corporation Watch]

Google Using Search Engine to Muscle into Internet Businesses, Study Finds

(Consumer Watchdog, June 2) --  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 under the auspices of its Google Privacy and Accountability Project and "Inside Google" website.

	The report found that since 2007, when Google adopted a so-called "universal search" system that blends listings from its own news, video, images, book, and local search engines -- and favors these services with prominent listings in the search results -- traffic to Google's sites has soared at the expense of its competitors.

	"Google claims that its search is neutral," said John Simpson, a 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."

	The non-profit, non-partisan consumer group is sending the study, "Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets," to the U.S. Justice Department and European Commission anti-trust officials.

	In the most comprehensive study of its kind to date, Consumer Watchdog obtained three years of Internet traffic data for more than 100 popular websites 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, and revealed Google's dramatic gains since 2007. 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 Inside Google analysis found that the most striking example of the power of the universal search strategy is Google rival MapQuest, whose marketshare has dwindled from 57.24% in July 2007 to 32% in 2010.

	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 above 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," it says. "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."

	Consumer Watchdog's Google Privacy and Accountability 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.