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    5. Microsoft bides its time while Google's future is decided

    Business

    Microsoft bides its time while Google's future is decided

    Like all the best Silicon Valley legends, Google's story begins with two geeks in a college dorm room.

    < p>Larry Page and Sergey Brin, who met as graduate students at Stanford University, wanted to create a search engine that could make sense of the tangled mass of data on the ever-growing World Wide Web.

    >When a user entered terms into the platform, it didn't just return every page that mentioned the words in question. Instead, Google crawled the Internet and found the most relevant pages by measuring the number of “backlinks” that converged on them.

    It was a neat way of ranking websites based on how useful they were to the web users themselves. and quickly made Google so indispensable that the word “Google” actually became a verb in everyday life.

    Today, Page and Brin's creation handles more than 70% of all Internet searches, making it the de facto gateway to the world. A wide net for the vast majority of people.

    Google founders Larry Page and Sergey Brin met as graduate students at Stanford University. Photo: Kim Kulish/Corbis Historical

    Google is also at the center of a vast $1.7 trillion (£1.36 trillion) empire that now spans advertising, healthcare, fiber broadband, self-driving cars and even robotic farming.

    But How it got there – sometimes through heavy-handed tactics – is now the subject of a massive legal battle that began Tuesday and will unfold in the coming weeks.

    In this landmark lawsuit, the US Department of Justice will argue that Google, whose employees are known to embrace the motto “Don't be evil”, used bully tactics to abuse its market dominance, destroying search and advertising competitors with ruthless efficiency.

    Critics charge that if successful, the case could do little more than close the stable door after the horse has bolted.

    But others say it would have major implications for technology regulation – and could shape the future of search, including the growing use of artificial intelligence (AI).

    Depending on the outcome of the case, this future situation could look very different if Google is unable to protect its cherished role as the default search engine used by consumers on smartphones and computers around the world.

    0605 Impact of AI

    Google has been part of the Internet furniture for most of the time that most people have had personal computers—the company recently celebrated its 25th anniversary. And its empire spans not just consumer services like YouTube, Gmail, Android and Maps, but also a network of basic web hosting and advertising, meaning it's hard to imagine a world without them.

    Before the search engine became dominant, Internet users often had to try multiple search sites to find what they were looking for. His opponents say his current dominance is far from positive.

    For example, consumers once used price comparison websites such as Kelkoo and PriceRunner to find bargains online. Google has been accused of destroying such sites to promote its own shopping service. This means that consumers are more likely to simply buy from sites that pay the highest bills in search results.

    The company's status as the default provider for so many services has also led to accusations that it has become sclerotic: Users have complained for years that Google's search results are getting worse, are easily gamed by low-quality sites, and are crammed with ads while monopolizing the market. . in a way that could prevent a more flexible alternative from gaining a foothold.

    Google can argue that in this parallel universe it would not be able to fund the development of Android smartphones used by billions of people. first interaction with the Internet. Instead, services, including email and maps, that are funded by Google's advertising machine may require payment.

    “This is a period of uncertainty in technology, but it should be short-lived,” said Dan Ives, Wall Street analyst at Wedbush Securities.

    “We believe the risk to Google is contained and that Big Tech will prevail.

    “But if there is an antitrust violation, the winner will be Microsoft, which is aggressively pursuing AI and the search market as a whole.

    “It's a Game of Thrones-style arms race.”

    Google says its success comes down to just one thing: it offers a better product than all the alternatives.

    Even on Bing, Microsoft's answer to Google, the most popular search term is “Google,” according to Google. to a study released by search engine optimization company Ahrefs.

    This shows that “most people actually prefer to use Google,” Kent Walker, Google's president of global affairs, said this month.

    < p>Of course, since the 1990s, the search giant has dealt with a long list of competitors, including such big beasts as Yahoo! and ask Jeeves about lesser-known alternatives such as Excite, Infoseek, Alltheweb, Hotwired and Altavista.

    At the time, search engine companies were rushing to replace the more traditional “secret” sections in newspapers and magazines – consciously that there was a huge opportunity to make money for those who could dominate the market.

    Sir Martin Sorrell, the WPP advertising tycoon who now runs digital advertising business S4 Capital, recalls meeting Google's founders at the World Economic Forum in Davos in the early 2000s.

    Page and Brin were “strategic” in his thinking, he says, and was keen to emphasize the importance of the Internet to advertising executives, but not all of them were convinced.

    “This was at a time when some people thought the Internet was not very significant “, notes Sorrell, – and this assumption for some turned out to be extremely incorrect.

    By 2010, with most search competitors gone, Google had captured two-fifths of the online advertising market—more than all its competitors combined—and was projecting $2.5 billion in sales from services like Adwords, which allow companies pay for advertising. advertising appears in search results.

    Ten years later, that figure has jumped to $43 billion a year, with the UK Competition and Markets Authority (CMA) estimating that Google controls 93% of the search advertising market.

    Google has strengthened its position by making itself the search engine for default on many smartphones and computers, then collecting user data, which it used to better target ads, the CMA study found.

    Sir Martin Sorrell says Larry Page and Sergey Brin had unique “strategic” thinking. Photo: Holly Adams/Bloomberg

    The company achieved this in part due to the success of its own popular Internet browser, Chrome, which overtook Microsoft Internet Explorer in 2012. Google also struck a $400 million deal with Mozilla so the company could use Google's search engine in its rival Firefox browser.< /p>

    At the same time, Google has ensured that consumers are accustomed to the search engine on their smartphones by striking multibillion-dollar deals with manufacturers such as Apple and Samsung.

    For example, a deal with Apple in which Google, as reportedly paying $20 billion a year, means that customers who use the Safari app to search the Internet on their iPhone, Macbook or iPad are automatically redirected to Google results.

    The company also placed restrictions on companies using its Android smartphone operating system, requiring them to have the Google Chrome browser app installed by default.

    Rival search engines that survive today, such as DuckDuckGo, which positions itself as a privacy-friendly alternative to Google. These advantages are said to create competitive moats that are nearly impossible for challengers to overcome.

    And it's precisely these kinds of deals that are now under attack from Justice Department prosecutors. “This feedback loop, this wheel has been turning for over 12 years,” said Kenneth Dintzer, a Justice Department lawyer.

    “And it always turns in Google's favor.”

    Lawyers for the US Department of Justice said Google has been “abusing its monopoly” for more than a decade. Photo: Ting Shen/Bloomberg

    If prosecutors prevail, they could seek to impose a range of penalties on Google, from large fines to stricter regulations or even a breakup of the business.

    However, as Sorrell notes, the US antitrust case may be fighting yesterday's battle.

    Because rather than traditional search, what could break Google's grip on the online advertising market is artificial intelligence: search results ” chatbots” are already being used for the first time by Microsoft's Bing system and OpenAI's ChatGPT system. < /p>

    Google is testing its own version of this format, called Bard.

    “The irony is that regulators are pursuing Google even as competition intensifies,” Sorrell adds. “I believe they will never be able to keep up with these companies.”

    The AI ​​arms race means that the future of search will no longer be the static lists of hyperlinks dreamed up by Page and Brin at Stanford. , but conversational-style responses and even ads with personalized text and images for each user are served by the machine in the blink of an eye.

    But somewhere—perhaps in a college dorm room—someone may be working on an idea that leads exactly to this.

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