"60 Minutes reports on the power of Google" (GOOG)
From CBS News, May 20:
This past week the Federal Trade Commission was asked to investigate
the data collected by Google on its Android operating system, which
powers most of the world's smartphones. It was a tiny blip in the news
cycle but another sign of Washington's and Europe's growing concerns
about the enormous, largely unchecked power accumulated by tech giants
like Facebook, Amazon and Google over the last two decades. Of the
three, Google, which is part of a holding company called Alphabet is the
most powerful, intriguing, and omnipresent in our lives. This is how it
came to be.
Most people love Google. It's changed our world,
insinuated itself in our lives, made itself indispensable. You probably
don't even have to type Google.com into your computer, it's often the
default setting, a competitive advantage Google paid billions of dollars
for. No worry. Google is worth more than three-quarters of a trillion
dollars right now and you don't get that big by accident.
Since going public in 2004, Google has acquired more than 200
companies, expanding its reach across the internet. It bought YouTube,
the biggest video platform. It bought Android, the operating system that
runs 80% of the world's smartphones and it bought DoubleClick, which
distributes much of the world's digital advertising, all of this barely
raising an eyebrow with regulators in Washington.
Steve Kroft: Were any of those acquisitions questioned by the antitrust division of the Justice Department?
Gary
Reback: Some were investigated, but only superficially, the government
just really isn't enforcing our antitrust laws. And that's what's
happened. None of these acquisitions have been challenged.
Gary
Reback is one of the most prominent antitrust lawyers in the country
widely credited with persuading the Justice Department to sue Microsoft
back in the 90s, the last major antitrust case against big tech. Now he
is battling Google.
Steve Kroft: You think Google's a monopoly?
Gary
Reback: Oh, yes, of course Google's a monopoly. In fact they're a
monopoly in several markets. They're a monopoly in search. They're a
monopoly in search advertising.
Those technologies are less than
25 years old, and may seem small compared to the industrial monopolies
like railroads and standard oil a century ago but Reback says there's
nothing small about Google.
"People tell their search engine
things they wouldn't even tell their wives... And that gives the company
that controls it a mind-boggling degree of control over our entire
society."
Gary Reback: Google makes the internet work. The internet would not be accessible to us without a search engine
Steve Kroft: And they control it.
Gary
Reback: They control access to it. That's the important part. Google is
the gatekeeper for-- for the World Wide Web, for the internet as we
know it. It is every bit as important today as petroleum was when John
D. Rockefeller was monopolizing that.
Last year, Google conducted 90% of the world's internet searches.
When billions of people asked trillions of questions it was Google that
provided the answers using computer algorithms known only to Google.
Jonathan
Taplin: They have this phrase they use, "competition is just a click
away." They have no competition. Bing, their competition, has 2% of the
market. They have 90%.
Jonathan Taplin is a digital media expert
and director emeritus of the Annenberg Innovation Lab at the University
of Southern California. He says Google's expertise may be technology,
but its business is advertising. And its most valuable commodity is
highly specialized information about us. It's helped Google control
roughly 60% of worldwide advertising revenue on the internet. Taplin
says traditional companies can't compete because they don't have the
data.
Jonathan Taplin: They know who you are, where you are, what
you just bought, what you might wanna buy. And so if I'm an advertiser
and I say, "I want 24-year-old women in Nashville, Tennessee who drive
trucks and drink bourbon," I can do that on Google....MUCH MORE, including video