Wednesday, February 24, 2010

News flow not going Google's way... (GOOG, MSFT)

The Financial Times is reporting that Google is the subject of an antitrust investigation by the European Union.  The company's 90% search market share in Europe is about 10% higher than it is in the US, and investigators are also looking at Google's potential interference with ad prices:

At an estimated 90 per cent, Google’s share of search advertising in Europe is higher even than its home market in the US, where most analysts put it at up to 80 per cent.
The complaint from Ciao, now part of Microsoft’s Bing search engine, centres on Google’s advertising system. While it has always maintained that advertising prices are set by auction, leaving it without any direct influence over pricing, it has faced complaints from a number of companies over its practice of setting minimum bid levels.

A Google response on their company blog chalked it up to it's size, making it an inevitable target of corporate-suspicious commissions:

Given that these complaints will generate interest in the media, we wanted to provide some background to them. First, search. Foundem - a member of an organisation called ICOMPwhich is funded partly by Microsoft - argues that our algorithms demote their site in our results because they are a vertical search engine and so a direct competitor to Google.'s complaint seems to echo these concerns.
We understand how important rankings can be to websites, especially commercial ones, because a higher ranking typically drives higher volumes of traffic. We are also the first to admit that our search is not perfect, but it's a very hard computer science problem to crack. Imagine having to rank the 272 million possible results for a popular query like the iPod on a 14 by 12 screen computer screen in just a few milliseconds. It's a challenge we face millions of times each day.

In completely unrelated news - but plenty unfortunate for Google - three Italian Google execs were convicted of privacy violations in connection with a bullying video of an autistic boy.  It will likely be appealed, as it's an attempt to hold Google responsible for the actions of anonymous uploaders:

MILAN (AP) - An Italian court convicted three Google executives of privacy violations Wednesday because they did not act quickly enough to pull down an video online that showed bullies abusing an autistic boy.
The case was being closely watched around the world due to its implications for Internet freedom.
In the first such criminal trial of its kind, Judge Oscar Magi sentenced the three to a six-month suspended sentence and absolved them of defamation charges. A fourth defendant, charged only with defamation, was acquitted.
Google called the decision "astonishing" and said it would appeal.
"The judge has decided I'm primarily responsible for the actions of some teenagers who uploaded a reprehensible video to Google video," Google's global privacy counsel Peter Fleischer, who was convicted in absentia, said in a statement.

Copyright 2010 AlphaNinja

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