Is Google Headed For A Forced Breakup?

Writing by Nick Stamoulis on Wednesday, 5 of March , 2008 at 1:43 pm

If you’ve been watching search engine and Search Engine Optimization news lately then you know it’s a volatile market. Yahoo! is laying people off and looks to be in major trouble. Having shrugged off a hostile takeover bid from Microsoft, the company is searching for other options, including a possible partnership with AOL. But that’s not likely to happen. Ask.com is also laying off employees even as it partners with Digg to add stories to its new social news site.

The question begs to be answered: What if Yahoo! does get sucked up by Microsoft and Ask.com moves on to other things? That would leave a Google vs. Microsoft world where the former still dominates. On the other hand, if Yahoo! partners with AOL and gives up its search presence to Google (because Google owns 5% of AOL) then that would make Google a more-than-dominant player. Add 60% to 30% and Google will own 90% of the search market. That would effectively make them a monopoly. There is no way Microsoft and Ask could compete with that even if they teamed up together. Newer search engines might see it as an opportunity but would likely not be able to eat into the Google monopoly at all.

If Google did own that much of the search market, almost anything the search engine did would be seen as a monopolistic threat to everyone else. Ubiquity has its problems. Like Microsoft a few years ago, Google would have a public perception problem (albeit one not entirely of their own doing). The question is, would Google escape anti-trust consequences as Microsoft has or would the courts turn back time to the Standard Oil era and force Google to ditch some of its properties in a forced breakup. If that happened, which properties would Google lose? Would its pay-per-click advertising business be forced to stand alone, or would it be something else?

I think there is little doubt that one of the search engines will go under by the end of this year. It looks like it will be Yahoo!, but it could be Ask. It likely will not be Microsoft, which still has the funding of Bill Gates behind it. If Yahoo! goes, all fair play will likely go with it.

Category: Search Engines

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