Google and Microsoft compete in search, cloud computing and Web services, but their battles extend from boardroom bargaining with customers to the nation's capitol.
Google spent $4 million on lobbying in 2009, up from $2.84 million in 2008 and almost three times the $1.52 million it spent in 2007, according to figures compiled by the U.S. Senate. Microsoft's own lobbying spend plummeted from 2007 and 2008, where it was around $9 million, to $6.72 million. Let's look at Google's impressive rise first.
Google spent on lobbying for privacy and competition issues related to online advertising, copyright laws and its Google Book Search settlement. The roots go back a few years. See the report here:
Ever since Google's YouTube and DoubleClick acquisitions from a few years ago, and especially since Google tried to pre-empt Microsoft from buying Yahoo in 2008, the search engine has felt the fat fingers of the government caressing its thickening neck ($2 billion in profit for Q4, $24.5 billion in the bank).
Google is currently being challenged by the Department of Justice and other parties over its Google Book Search proposal. Google is also facing regulatory scrutiny from the Federal Trade Commission over its bid to buy mobile ad network AdMob for $750 million.
Then there are the omnipresent privacy watchdogs, whispering and sometimes shouting their discontent over Google's data collection practices in cloud computing.
So we may choose to view Google's spending on Capitol Hill lobbying as gardening, or sowing seeds to defend its current and future plans and practices.
Of course, Google can thank Microsoft for ratcheting up the rhetoric in Washington, D.C. More than once, Googlers have told me Microsoft may be behind some of the many attacks made on Google's propriety.
However, a Google spokesperson wouldn't take the bait on whether Google's boost in spending was influenced by the rants of Microsoft and other opponents that claim Google is growing evil as it grows larger, adding:
""I wouldn't say it's directly attributable at all. We've always had a plan for steady growth in Washington. I don't think it would surprise anybody that as Washington takes on more issues that impact our users and out industry that Google wants to have a strong presence in Washington. We know that as we grow we're going to have more responsibility to live up to that [Don't Be Evil] motto.""
Microsoft has been there, done that as the main quarry of DOJ hunts from the mid-1990s through 2005. Google, through its own capitalistic endeavors and success, is now the hunted.
Indeed, while Google's lobbying spend has increased each year since it began lobbying in 2005 (for a paltry $260,000), Microsoft's own lobbying spend has decreased.
See this Google-Microsoft comparison chart from AllThingsDigital:
It bears repeating: Microsoft's 2009 lobbying spend was $6.72 million, still nearly $3 million more than that of Google's spend, but more than $2 million less than its 2008 and 2007 totals of $9 million or so.
Microsoft, a loss leader on the Web, is no longer considered Corporate Enemy No. 1.
Microsoft must feel some cognitive dissonance here; while it's nice not to be the top target of governmental scrutiny, it's also a sign that it's not a threat to consumers, let alone competitors. Google, and Microsoft haters, must love that.
Where the government is considered, it's hard not to view Google as the new Microsoft. Google's rise in lobbying spend, coupled with Microsoft's precipitous fall in spend, is indicative of that.