How does Google continue to outdo Microsoft?

Creating a title that does not exactly reveal what an editorial is going to consist of, while at the same time getting the user to begin reading it without yelling “sensationalist journalism!” is probably an art that I will never master. So, what exactly did Google do for me to conclude that it outdid Microsoft? For starters, in this editorial I could examine how Google essentially forced Microsoft to change the desktop search and indexing feature in Windows Vista SP1. On the other hand, I could discuss how the search giant continues, year after year, to beat the largest software maker in the field of web search. What I find the most intriguing, however, are the last 6 months consisting of Google avoiding every single attempt Microsoft has thrown at the search leader to stop its intimidating expansion in the online advertising world.

We know that the money made from boasting the world’s most popular search engine, or any search engine for that matter, comes from advertising. It therefore follows that Google is the top dog in the search online advertising market. 6 months ago, Google may have dominated the online advertising market, but now it has the potential to essentially govern it. In April, Google moved to purchase DoubleClick, big number one in the non-search online advertising market, for $3.1 billion. The two largest online advertising distributors were about to become one. Given Google’s leading position and the fact that DoubleClick specializes on serving banners and other display ads on prominent Web sites, it is not surprising that competitors were not pleased. Days later, Microsoft publically asked the American government to block the purchase.

Yahoo, TimeWarner and Microsoft were outbid by Google against all odds. In early May, Yahoo announced plans to pay $680 million for the remaining 80% it did not yet own of Right Media, which operated an online advertising exchange, and rumours about Microsoft buying Internet ad firm 24/7 Real Media for about $1 billion began to emerge. In August, Microsoft paid a whopping $6 billion for digital marketing company aQuantive. Fortunately for Google, despite its two main competitors paying more than double combined, the acquired companies just weren’t even remotely equivalent to the search leader’s accomplishment. Google simply did not have the financial backing to outbid Microsoft. And yet, somehow, the smaller company convinced DoubleClick to take its side.

Microsoft, along with a slew of other companies, got together right after Google announced its success and demanded that the deal be stopped as the purchase would result in Google having an anti-competitive death grip on the online advertising market. On top of that, in response to protests from various privacy groups, the FTC launched an antitrust investigation into the merger in May. In late September, the European Commission also decided to become interested in Google’s plans. An incredible amount of opposition erupted over the last half-year, but there has not been any news that would signify that Microsoft’s (and the many in agreement with the software giant’s stance) efforts have not been fruitless. Various organizations with the authority to do so, collectively or single-handedly, have yet to tell Google to take back its 3.1 billion.

In late September, Google announced plans to hire thousands of engineers in Europe to make Google's European operations equivalent in size to those in the United States. In early October, the German state of Schleswig-Holstein notified the European Union about privacy issues regarding the marriage of Google and DoubleClick. Less than two weeks later, the European Union announced it would not bother with verifying possible privacy issues that the union might result in and would only focus on competition aspects of the deal. Microsoft has had to pay the EU over €750 million for being anti-competitive, while so far, despite pleas from governments, privacy groups and companies including Microsoft, Google has eluded any sort of monetary compensation with its currently most lucrative and arguably monopolistic acquisition.

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