Google Antitrust Worries, Growth Slowdown Seen as Temporary Setbacks

By Jaikumar Vijayan  |  Posted 2015-03-31 Print this article Print
Google Challenges

“Even within industry circles, there is a prevailing view that Google has lost some ‘mojo,” he noted.

By continuing to cling to “aging revenue pillars” and squandering the present to focus on “scattergun projects” Forbes columnist Gordon Kelly recently likened Google to the old Microsoft. “Google’s pillars of ads and search have become its Windows and Office,” Kelly said. “Both are being chipped away by more targeted advertising within social media and the compartmentalization of an apps-based world.”

That certainly is a somewhat different Google than the one, which prompted FTC staffers to recommend the company be sued for anti-competitive behavior back in early 2013.

Google managed to avoid a federal antitrust lawsuit when the FTC’s Commissioners in January 2013 unanimously decided to drop a 19-month investigation of the company, which had voluntarily agreed to change some of its business practices.

But an internal FTC document obtained by the Wall Street Journal shows that Google used its enormous search engine clout to bully other companies, stifle competition and resort to what the FTC staff described as actions that hurt consumers and rivals.

So now Google is not only facing questions about future growth prospects, it has to be concerned that these recent disclosures will raise the chances that the company will face antitrust prosecution in the EU or even a renewed investigation in the U.S.

However, not all industry analysts believe that Google's recent setbacks are a sign that it is on the tipping point of a prolonged decline.

While Wall Street has fretted about a slowdown in Google’s core businesses, industry analysts say the issues are typical for any technology company of Google’s size, particularly one that has grown the way it has in recent years.

“Some people are now attacking Google with the same vitriol they reserved for Microsoft,” said Gartner analyst Tom Austin. But “Google’s fine,” he said pointing to a recent Gartner report on the company titled ‘Understanding Google, 2015.”

In the report, Austin and other Gartner analysts acknowledge the many challenges that Google faces from rivals, regulators and evolving market conditions. Yet, Google continues to flourish, says Gartner.

From an enterprise standpoint, “Google's investments in and ROI from enterprise offerings continue to grow,” Gartner said. “The company leads in some market segments and competes effectively in a broad range of other enterprise- relevant businesses.”

While Google does derive a lot of its revenue from the advertising business, it is a mistake to continue to view the company as only an Internet ad giant, Gartner says.

Google's wide-ranging technology investments have put the company in a great position for the future. Its growing portfolio of enterprise systems and services, such as Google Apps, the Google Cloud Platform, Google Drive for Work and Chromebooks, position the company well in the enterprise space. Furthermore, Google’s huge infrastructure investments to support its advertising and marketing services mean the company will only have to make minimal investments to scale out its enterprise offerings, according to Gartner. “This is a substantial benefit not available to many other competitors,” the analyst firm noted in its 43-page report.



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