Google Chief's Senate Testimony: 10 Lessons Learned About the Search Giant

 
 
By Don Reisinger  |  Posted 2011-09-22
 
 
 

Google Chief's Senate Testimony: 10 Lessons Learned About the Search Giant


Google finds itself in some trouble. The company's business is being reviewed by the U.S. Federal Trade Commission to determine if the company is acting as a monopoly and stifling competition in the marketplace. For its part, Google has said that such claims are ridiculous, and it is simply performing better than all other firms in a hotly contested online marketplace.

But not everyone is so quick to agree. During a hearing with the U.S. Senate Judiciary Committee's antitrust subcommittee, Google Executive Chairman Eric Schmidt was forced to field questions from senators, who continued to hammer away at Google's practices. Those senators cited Google Search, the company's relationship with Yelp and much more. The questions certainly indicated that the senators are, at the very least, skeptical of Google and its business practices.

But aside from that, much can be gleaned from Schmidt's testimony on Sept. 21. During the entire process, he provided an important look into what Google thinks, and how it operates its business.

1. Google won't back down

If nothing else, Schmidt made it abundantly clear during his testimony before the subcommittee that Google won't go down without a fight. The search giant believes that it's not stifling competition in the marketplace and it's simply performing extremely well where others are not. Perhaps Schmidt's most overt statement on Google's intention to not back down came at the beginning of his prepared testimony when he requested the subcommittee "ensure that the FTC's inquiry remains a focused and fair process."

2. Google doesn't believe it's doing anything wrong

Google seems to believe that it isn't doing anything wrong in the marketplace. Schmidt said numerous times during his testimony that Google always "puts consumers first" and continually tries to be as "open" as possible. What's more, Schmidt said his company is "transparent" in how it handles its business. Simply put, Schmidt-and Google-feels the search giant is doing nothing wrong.

3. The competition idea is ridiculous to Google

Much has been made about Google's ability to stifle competition in the marketplace. However, during his prepared testimony, Schmidt made it clear that the search company thinks that argument is nonsense. He said the Internet is an open environment for any company to come up and grab market share away from competitors. He also noted that Google competes "hard" against Amazon, Microsoft and others in the search and cloud computing spaces. In other words, even though Google Search is dominant and its advertising platform is the only go-to option for most advertisers, Google still believes its competitors can catch up.

4. Google is worried about the FTC's inquiry

It's important to note that Google is clearly concerned about the FTC's inquiry into its business. As history has shown, the U.S. government hasn't always been so kind to major corporations. And Schmidt, trying to acknowledge that, asked the subcommittee to help Google receive a "fair" review of its business from the FTC. Schmidt also ended his prepared testimony with mention of the FTC, saying that the inquiry should show that Google is an "enthusiastic company."

Google Isnt Ashamed of Its Growth


 

5. Google is creating jobs

During his prepared testimony discussing the virtues of his company, Schmidt used the economy to help bolster his argument. He noted that since 2002, Google has created more than 23,000 jobs, and the company expects to have its biggest hiring year in 2011. Playing the jobs game is something that Google has obviously clung to. But whether or not it will work remains to be seen.

6. Google really can't stand Microsoft

Even with Google's back against the wall, Schmidt couldn't help but take shots at Microsoft. In both the prepared testimony and during questioning, Schmidt alluded to Microsoft's antitrust suit from the late-1990s, saying in coded language that Google is no Microsoft. It was an interesting move and seemed to indicate that Google's issues with Microsoft run deep.

7. Google is ready to face more inquiries

Schmidt came prepared to face the slings and arrows of the Senate subcommittee. He provided Google's side of the story, answered inquiries quite convincingly and generally proved that the company's strength goes beyond the Web. The company is prepared to face more inquiries and overcome them. Schmidt is a smart person with a battery of high-powered lawyers to help him out. Expect those two components to play a crucial role in Google's strategy with future government inquiries.

8. Google search is just the tip of the iceberg

When the subcommittee had the chance to pelt Schmidt with questions about Google, it was clear that search was just the tip of the iceberg. Schmidt seemed ready to field any questions outside of the company's core platform. From Google's troubles with the United States over Canadian prescription drug ads to Yelp, the company seemed to have ready answers for any questions the senators might want to ask. And that could help it in the long run.

9. Google doesn't think its size is a problem

Let's face it: Google is a huge company with an immense amount of power in the marketplace. But during Schmidt's testimony, it quickly became clear that Google doesn't see a problem with that. Schmidt touted the search company's growth, discussed its prominence in search results and even mentioned its bid to be the most influential company in the mobile space. Typically, companies facing FTC inquiries want to play down their size and strength. But it appears that Google doesn't plan to use that tactic.

10. Schmidt will be the public face of Google

Going forward, it appears that Schmidt will be the public face of Google, leaving CEO Larry Page free to run the company. With Microsoft, it was a different story: Bill Gates was forced to field the inquiries. But by putting Schmidt, Google's executive chairman, out in front of the people to talk about Google's size and influence, the search giant made an incredibly smart move. Now, the public can look to Page as the "product" person and Schmidt-someone who isn't involved in day-to-day operations-as the "legal" person. It was a brilliant PR move that will benefit Google greatly.

Follow Don Reisinger on Twitter by clicking here 


Rocket Fuel