Dissecting the Microsoft-Google Search Dispute

[Sunite]

Dissecting the Microsoft-Google Search Dispute
By Jennifer LeClaire
June 12, 2007 10:33AM

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With its latest complaint about Microsoft to the Justice Department, Google might be pushing the antitrust button. However, the general attitude toward Microsoft as a monopoly has changed, according to analyst Greg Sterling. Perhaps ironically, he noted, it has changed, in part, because of Google's success.

Related Topics
   Google
   Microsoft
   Desktop Search
   Windows
   Department of Justice
   Antitrust

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   Microsoft Relevant Products/Services and Google are going tit for tat with Department of Justice complaints.

Last year, Google complained that Redmond was giving its MSN search engine priority over Google, Yahoo, and others in Internet Explorer 7. Microsoft bowed to the accusation and made changes to its software.

Then, Microsoft rose up in arms after Google won the $3.1 billion bid for DoubleClick in April, sending a letter to the Federal Trade Commission urging it to scrutinize the deal. The FTC obliged and is reviewing the merger.

What the world didn't know was that during the same month, Google filed a 49-page report with the DOJ and several state attorneys general claiming Microsoft is stifling competition with its search operations in Windows Vista. Specifically, Google is alleging that Vista's search utility discourages the use of Google's own desktop search.

History of the Battle

Desktop search helps people find information stored on their hard drives. With the victorious brand gaining user loyalty, desktop search is a battleground that has seen search companies forget many alliances with computer makers.

Typically, desktop search tools are free to the user, and the hope among search companies offering these tools is that if you get consumers accustomed to searching their hard drives with a particular brand, they will search the Internet with that same brand.

Search engines began rushing to the desktop about three years ago. That's when Yahoo announced it was working on a desktop search solution. Google also announced it would extend its reach into the desktop market. And, in turn, Microsoft entered desktop search with its MSN Toolbar, the promised response to Google.

Microsoft is downplaying Google's claims about the search functionality that is now embedded in Windows Vista, but California Attorney General Jerry Brown is joining state officials who have expressed concern over Microsoft's desktop search.

"The complaints made about Vista are troublesome, and I take them very seriously," Brown said in a published statement. "Our goal is to provide consumers using the Vista operating system easier access to competing features."

Google's Good Fortune

Google might be pushing the antitrust button, hoping to incite a review of Microsoft's practices and whether they are aligned with the mandates of a 2002 government antitrust settlement. In the wake of the '02 antitrust suit, Microsoft agreed to make its operating system work with competing software.

However, the general attitude toward Microsoft as a monopoly has changed, according to Greg Sterling, principal analyst at Sterling Market Intelligence. Perhaps ironically, he noted, it has changed, in part, because of Google's success.

"The resurgence of Apple and the fact that the Internet has become a competitor to the desktop, along with Google's success in search and online advertising, has created some counter waves that give Microsoft some political leverage," Sterling said. "Google's success makes Microsoft seemingly less powerful. In some ironic way, Google is the best thing that could have happened to Microsoft because the company can now point to Google and divert attention from itself."