In the last few days, we have seen a lot of news about the monopoly that Google has. This news is all about Google’s dominance over the $ 130 billion digital advertising market. The reason seems to be that Google’s monopoly.
We know this thanks to a document where it says that the United States could file an antitrust case against the Internet giant.
Let’s learn more!
Is Google a Monopoly?
In an interview with the CEO of Google Spain, Javier Rodríguez Zapatero, he assured that Google was not a monopoly. His reasoning was that the competition was just one click away. In the same way, he assumed that anyone can switch to a competitor’s product without any problem.
Despite this, the market shares in Spain are above 90%. Because of this, we can consider them a monopoly. Likewise, a monopoly is risky, because a unilateral decision can leave business out of the game.
If you set up an online business, your revenue will most probably depend on online advertising or direct sales. So, if you are removed from the search engine for any reason, that business can fail.
This is a great power to have, as well as dangerous if you have a total market share. However, the CEO of Google Spain is right; there is no way out. There are also other sectors in which anti-monopoly measures have been taken. One example of this has been the telecommunications sector.
If you don’t like Google, you can use Yahoo! Ask or Live Seach. The problem is that the product that Google currently offers is of higher quality, or at least, this is how users rate it.
What measures can be taken against a monopoly of this style?
This means one that has great power, but to which the users are not bound.
It’s difficult to know. It may not be possible to do anything or perhaps the problem is in the rest of the search engines.
Some of these even have much higher market shares in other countries.
Simply put, Google has the best product today. Besides, a large percentage of users jump to use the best of the best.
The problem of this is since there are no limits, it has been hurting advertisers, news publishers, and consumers.
Google’s monopoly, What is Google’s problem?
That is the concern we have when we read this type of news.
Let’s talk about the location: Google is located in a beautiful place and consists of two locations. The first is where the old headquarters is located, a set of buildings full of offices.
From the outside, there is a similarity, where a large tent is found, but the inside is not yet defined. However, after the pandemic, this site can be very helpful.
“We will have the opportunity to re-imagine it,” says Sundar Pichai, leader of Google and its parent company, Alphabet. It’s because of this that the structure is changing. Besides, this is not the only thing that is being changed. The organization is also going through a transition.
When Pichai took over as CEO of Google in August 2015, he quickly became the core of the newly created Alphabet. The online search and advertising business had revenues of $ 66 billion and net profits of $ 14 billion.
Google’s founders, Sergey Brin and Larry Page made the decision to hand over control of Google’s parent company last December.
At this time, its division was reaching $ 34 billion in profit on sales of $ 161 billion. Not only that but after four years Alphabet managed to increase its worth up to twice as much.
This high balance sheet defends Pichai’s rich reward package over many years. Thanks to this, he now has an annual salary of $ 2 million, not to mention the $ 240 million in stock and stock options.
In the same way, a degree of satisfaction is justified. However, Pichai warns that he has received an organization amid a huge change. This is not only due to the exit of the founders or the move next year to the new headquarters but for deeper reasons.
As Alphabet has grown, so have economic and political forces.
Google’s monopoly, New pressures
On the other hand, there is a lot of people who are angry with Google.
This list ranges from legislators to people who are against monopolies. They all want answers from the company about their so-called abuses against the searches and advertising technology market.
And to add more fuel to the fire, on July 29 of this year, Pichai, along with the CEOs from Amazon, Apple, and Facebook was called for interrogation.
This interrogation was created and made by the North American Congress. What was the aim of this? They wanted to investigate the alleged anti-competitive practices of large technology companies.
Always fresh never mainstream
From within the company, everything is fine, and Google’s main business is going strong as ever. However, Pichai’s biggest challenge continues to be the same. This is avoiding at all cost the possibility of ALphabet becoming “a mainstream company”. This was something that Brin and Page were always looking to avoid.
This becomes slow anguish because of the lack of innovation and low growth rate.
Today, Alphabet is a combination of business that at first sight may not have anything in common. You can call this a planetary system if you will.
Now, in a commercial aspect, it’s obvious that its main core is Google, especially it’s online advertising business. So, because of this, it generates around 83% of the group’s income and all its profits. As you can see, this is like a constellation in and out of itself.
It has an overabundance of products that together create what’s called the “online ad stack”. This includes services to sell, buy, and attend, notices, and measures for effectiveness, all of this done automatically. Thus, is in these areas that Google is the best globally as it is in online searches.
Their market share from advertisements exceeds 90%. Did you know?
Google’s monopoly, The sky is the limit
Where Pichai’s changes to the administration are most noticeable is in Google Cloud.
After becoming the number one service on Google five years ago, it’s clear that cloud storage has become more than just a trend.
In 2018, he hired Thomas Kurian to lead it. This man was a former top executive at Oracle and is a great creator of corporate software.
Going along with Pichai’s growing leadership philosophy, Kurian was given a lot more freedom.
This, in contrast with his predecessor, Diane Greene. Thus, making the unit a top-notch organization.
He did this by hiring people from his past employer, as well as from SAP, its German rival.
Google’s business in the cloud, which includes G Suite, its a set of online services for professionals.
This is a service that is growing at a rate of more than 50% annually. Besides, earnings are projected to reach $ 13 billion this year, adding 8% to Alphabet’s total.
However, Kurian’s financial success brings a lot of risks. Some of these are how company employees report the drive’s departure from the cloud to other parts of Alphabet.
Their main concern is about how the top-down drive of Google’s cloud business could spread around the organization.
In this sense, many begin to complain about orders that arrive from above with a deadline.
Google’s monopoly, Google’s stand in social issues
After George Floyd’s murder, Google’s staff complained about the lack of diversity in the company. Not only that, but they also said how the people in charge weren’t doing anything to solve this. So, after a couple of weeks, the company vowed to raise “representation in the leadership of underrepresented groups” by 30% over the next five years.
In June, over 2,000 employees signed an open letter to Pichai ordering the company to stop selling its technology to law enforcement agencies across the United States.
For the past few weeks, it seems like the situation has calmed down in the company. A lot of workers decided to stay silent in fear of being fired. We only know this because a Google employee shared that information anonymously.
All of this only adds to the fire of rumors and speculation, both inside and outside Alphabet. In fact, a lot of people are wondering if Pichai is the right person for the job.
On the other hand, Pichai is accused of being too risk-averse. “I was never shy to make big bets and follow my instincts,” insists the executive.
However, it’s hard to say that he is a visionary. This can be even harder if we compare him to figures like Amazon’s Jeff Bezos or Microsoft’s Satya Nadella. In this aspect, Pichai has the chance of proving everyone wrong.
A new age for Google
The Covid-19 pandemic offers the perfect excuse to erase a lot of problems in the company. An example of this can be the excessive stack of a lot of products. Besides, this also allows them to erase Alphabet’s internal bureaucracy.
No everything is bad news though, this could be a new age for Google.
Google’s monopoly. It could bring a new balance between Google’s culture of “better is new” creations and the more frequent use of the potential to make money from its products and services. So, these antitrust investigations could be a good thing for Pichai after all.
“In some sense seek greater clarity,” he says.
Another possibility is to charge for one of their services. And, for this, Google becomes more of a data tutorial center that handles people’s information for it. So, we can compare this with what a bank does with the money.
The firm has already started to create the necessary tools for this. This includes software that can eat up encrypted data. If Pichai could make this happen it would really be an inspiration. Thus, this would allow Alphabet to stick around for a while.
Google’s monopoly, Google’s legal battle
The tech giant Google faced an “unprecedented” investigation by fifty US attorneys general into its power on the internet and a possible violation of the country’s antitrust laws online.
“This is an unprecedented investigation. (…) It is fair to say that Google controls all aspects of the supply chain of the web public,” said Missouri Attorney General, Republican Eric Schmitt, in a press conference in front of the US Supreme Court
The highest court in the country served as the stage for Schmitt and a dozen other prosecutors from states in the country, such as Texas, Republican Ken Paxton, who leads the alliance.
“It’s a very important issue of our era. Many consumers believe that the internet is free, but we have learned that it’s not. Google is a company that dominates all aspects of advertising,” said Paxton.
48 state attorneys general and those of the District of Columbia and Puerto Rico will carry out investigations into the behavior of Alphabet, Google’s parent company, on the web.
The only two states not participating in the initiative are California, where the company is based, and Alabama.
“It should not surprise them that California is not part of this. (…) But they are invited to do so,” Paxton quipped when asked about it.
The Texas prosecutor stated that the initial focus of the investigation will be online advertising. This is a market in which he highlighted that Google is a “leader”. This comes after the company raised over 48,000 million dollars this year.
However, other attorneys generals went further with this issue and created more questions about Google’s activity. Some of them about the processing and protection of user data.
“When there is no free market or competition, prices go up.
Google’s monopoly. This happens even when something is marketed as free, and it hurts consumers.
But, is it really free when our private information is being shared more and more? “Asked Florida Attorney General Ashley Moody, Republican.
Prosecutors participating in the press conference highlighted the “bipartisan” nature of the initiative and the importance of “protecting American consumers”.
The moment Americans found out about this investigation, they started to build a lot of expectations.
Now, large technology companies will have to face the court to explain all of their online practices in recent years.
Because of Google’s dominance over 90% of the web search service, it has faced a wide range of accusations.
The most important one is about how they lead consumers to their own products at the expense of competitors.
Where does this come from?
Today’s action comes after another coalition of attorneys general from eight states opened an investigation Friday into whether Facebook compromised consumer data or violated antitrust law.
“The largest social media platform in the world must obey the law,” said New York General Attorney Letitia James.
Last month, Facebook agreed to pay $5 billion as part of a settlement with the Federal Trade Commission for privacy violation charges.
In short, two of the world’s largest tech companies will face a huge amount of investigations for the next few months. Thus, this result could change the advertising and data protection policies on their platforms.
Conclusion of Google’s monopoly
So, as you can see, Google is basically one of the largest search companies on the internet.
Because of this, all of our information depends on this company and the fact that it shouldn’t go outside of it. However, the beginning of this situation must be taken into account.
We know that after the pandemic, Google could change the structure of its headquarters, at least on a psychical aspect. On the other hand, when we talk about a company having a monopoly, no one comes close to Google.
We must take care of everything we use, even within the internet. Google is currently in a difficult situation where we will not know what its end will be.
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