Justice Department might hammer Google (GOOG)
Posted by: in Companies Competitive StrategyFiled under: Law, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
The Justice Department might be looking at an investigation of Google (NASDAQ:GOOG) that goes well beyond its deal to sell search ads for Yahoo! (NASDAQ:YHOO).
According to The Wall Street Journal, “The Justice Department has quietly hired one of the nation’s best-known litigators, former Walt Disney Co. vice chairman Sanford Litvack, for a possible antitrust challenge to Google Inc.’s growing power in advertising.”
The partnership with Yahoo! may end up being just a footnote in a probe that could become a big headache for the search company. A number of massive national advertisers have already complained that the deal could raise their search ad rates.
Google probably made a major tactical errors in its attempt to keep Yahoo! out of the hands of Microsoft (NASDAQ:MSFT). If Redmond had purchased the portal company, it probably would have been an extremely modest challenge to Google’s 70% of the US search market. The integration of MSN and Yahoo! could have taken a year. There’s no reason to believe that the acquisition would have been more trouble than it was worth.
Whether Google would have gotten into the Justice Department’s antirust cross hairs if it had stayed away from Yahoo! will always be open to debate. What won’t be is that Google did not help itself by stepping into the limelight of anti-competitive behavior.
Douglas A. McIntyre is an editor at 247wallst.com.
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