A number of issues are likely to play a crucial role in the ongoing antitrust investigation into Google(s goog), including the question of whether the company is using its dominant position in a way that damages the market (which as we’ve described before is a lot harder to answer than it might seem). In addition to that, one likely argument will be the one that Chris O’Brien at the San Jose Mercury News tried to float this past weekend: that Google’s position is now unassailable thanks to network effects and a number of other factors, and therefore. the company is unkillable. But is this really true?
In his column, O’Brien argues that Google’s grip on its users is “as firm as it is invisible,” and tries to make the case that while there aren’t any obvious signs that Google has an unshakeable monopoly on search, the company effectively does anyway. To take the least convincing part of O’Brien’s argument first, he says millions of people have become habituated to using Google, and this makes it extremely unlikely they will ever switch — even if a better search engine does come along. O’Brien quotes search-industry analyst and Search Engine Land blogger Danny Sullivan as saying:
People can quit smoking any time, too, but they find it very hard to do it. If you’ve got that habit, it’s very hard to break it. People don’t just go over and start trying new things.
This would be a much more powerful argument if using Google was actually addictive in the same way nicotine is, but so far that isn’t part of the government’s case (that I know of). Still, Google has clearly become the default search engine for millions of people, to the point where its name has achieved the status of a verb and people talk about “Googling” something instead of searching for it. And O’Brien argues this can be a barrier to entry into the market because “inertia is a powerful force” (although upstart competitor Blekko doesn’t think it needs the government’s help).
Google’s search position has been declining
But does this mean Google’s position is unassailable, and no one will ever use another search engine? Hardly. Google’s search-market share is only at around 65 percent (depending on which traffic measurement firm you choose to believe), which proves at least some people are already using a different search engine. And not only that, but since Google’s market share has actually been falling recently — from the 80-plus percent level it commanded just a few years ago — we know this group of users has actually been growing fairly steadily of late.
It’s not just our desire to use Google that makes it such a dominant force, according to O’Brien. He argues that the search giant also has a couple of other unfair advantages — such as its massive, globe-spanning collection of servers. This physical infrastructure, he says, makes it virtually impossible that any competitor, particularly a small startup, would be able to match Google on search results and become good enough to draw away users.
If you could get the users and the momentum, it’s possible that some venture capitalists might pony up the money to build out infrastructure. But it would still take years to actually match Google’s current footprint.
There’s no question that Google has a massive server network. It won’t say exactly how many servers it has, but some estimate the number at close to a million, which is about 2 percent of all the servers in the world. So is that a barrier to entry that no one can breach? Possibly. But it’s worth remembering that when Google first came along, no one believed it had any hope of becoming as huge as it is now. Most analysts said the search market was wrapped up by AltaVista and the other big players like Yahoo, (s yhoo) since the latter was a giant Internet player with deep pockets.
If there’s one good argument against this position, in fact, it’s Yahoo itself: The company that once dominated the web and was a major player in search is now adrift, without a CEO and thinking about splitting itself up for parts, having sold off its search business to Microsoft (s msft) after admitting it could no longer compete. And Google certainly didn’t have millions of servers when it started.
All it takes to compete is a better algorithm
What did Google have? A bunch of math nerds and a really great algorithm combined with a completely different way of thinking about search. The company didn’t even have a business model (it would later copy one from a company that Yahoo wound up buying called Overture). Now look at the search market today: Although they’ve been drowned out by the “Google is a monopoly” camp, there have been repeated criticisms that the company’s search results are no longer as good as they used to be, thanks in part to content farms and other spam that makes it hard to find good results.
Google has taken steps to kill off some of these weeds clogging up its results, by improving its algorithm, but there are still criticisms that a raw Google search is not as useful as it once was. And what is becoming more useful are “social searches” that involve networks like Facebook and Twitter, which is one reason why Google has put so many of its resources behind Google+ and plans to make that network a core part of all its assets. In a nutshell, it needs to figure out how to become a player in social search before it loses even more ground to competitors like Facebook.
In the end, O’Brien — and many other critics of Google, including law professor Tim Wu, author of the book The Master Switch — also argue that the search giant is unassailable because it benefits from network effects that no one else can match. In other words, the more people use its search, the better its results get, and the more people come to see it as the default for searching, and so on. It’s a killer combination.
But are network effects a recipe for omnipotence? Not really. Obviously, they can be very powerful, and are likely helping Google maintain its market share, but if network effects were all that mattered, we would all still be using AOL (s aol) and Friendster. Both had network effects that seemed unbeatable in their day, as did AltaVista and Myspace. They all toppled when a better solution came along, and — while it may seem incredibly unlikely — that fate could just as easily befall Google.