#GoogleEU – The beginning of the end for Google?

#GoogleEU – The beginning of the end for Google?

EU Commissionerfor Competition Margrethe Vestager made a big splash this week. She announced a formal anti- trust probe into Google. The focus of the probe is the prominence of Google Shopping in search results - #GoogleEU on LinkedIn. Google Shopping if you didn’t know - and I certainly didn’t - is a promoted advertising service. It pops up when you use internet search to try to find goods to buy online. Google makes money by taking a cut from the companies advertising. In Europe 90% of online searches are on Google . So Ms Vestager and her Directorate believe this is an abuse of market power.

I have no doubt Google makes plenty of money out of this service. On the face of it they also have tremendous market power. It is not hard to see how the Danish politician makes her case. The case will no doubt drag on for many years. It opens up some bigger questions. Questions about Europe and Google  that are worth looking at.

Questions, Questions

For example, why is Google so dominant in search in Europe anyway? According to all the press coverage its share of the search market is 90% in the EU compared to around 67.5% in the US. 

There is also a serious question about whether this is a genuine market. The reason I didn’t know about Google Shopping is that I would never think of a search engine for shopping. I just go to Amazon and find the best price. Amazon of course promotes its own products wherever possible. As a consumer this doesn’t bother me. I asked a couple of other people and the answer was either Amazon or eBay. I guess if it was something specialist I might go to Etsy. If I lived in China then I would use Alibaba. 

Others choose social media. Facebook and Twitter are full of queries and recommendations. Everything from the best way to charm your date to the latest shoe styles. Shoppers buy on recommendation so why not buy from your friends. A ton of mobile apps are appearing which tap this trend. Try out Mallzee for example if you want to buy clothes. Search is not the key driver of shopping.

Are search engines the past?

An even deeper question is whether search engines are the future of search. US entrepreneur and VC Alex Iskold wrote this post recently. He argues text messages are the best way to search. The emergence of messaging as the fastest growing communication medium extends this argument. Perhaps WhatsApp is the future of consumer search. Slack is the equivalent for B2B. On this basis search is a true competitive market. Because WeChat, Line and others in Asia are expanding just as fast.

Quality is a real issue

One reason for this. Google search is actually a bit rubbish. Fine for big broad topics but if you want the answer to a specific query not so good. For example, when I started this article I wanted to check the news coverage of the the story. I typed "google antitrust eu bbc” into the search bar. The actual story turned up at number 6 on the first page. Not including the one sponsored Ad. There were two versions of “the EU prepares to set out its case” above it but the real story was down at 6. 

This gets much worse if you are digging for something more obscure. By the way something like “SaaS revenue model” or “startup growth” counts as obscure in the world of search engines. Quora and Wikipedia are already established as better sources for most specific queries. I wanted to find out a little more about the politician behind the announcement. Naturally I went straight to Margrethe Vestager on Wikipedia. 

Has EU learned lessons from Microsoft?

With the benefit of hindsight, the Microsoft monopoly was already on the wane when the EU took on the Redmond “monster.” Mobile saw to that. The same may be true for Google. Messaging and social media have changed search forever. As business realises this, the benefits of search as an advertising channel will wane. Like Microsoft, Google may have another cash cow. Its Gmail and Google Drive businesses. Its huge market share and financial reserves will ensure a soft landing if its core business fades.

For Europe it is a case of arriving too late at the wrong party once again. Since the days of GSM, Europe has not held leadership in any tech sector. Look at the Nokia /Alcatel-Lucent merger for an example of faded glory. Yet I know from experience that the old continent still harbours potential.  it is home to some of the most innovative and vibrant startup communities. I hope our leaders forget past grievances and turn their eyes to the future.