Another day, another monopoly
Last week, a federal judge ruled that Google has a monopoly over parts of the online advertising business. That's another ruling against Google in two years.
The first monopoly ruling was over Google's dominance as a search engine. In 2020, the US Department of Justice (DoJ) filed its complaint. In 2023, the trial started and in 2024 the judge found that 'Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act.'
Yours truly still maintains the view, Google dominance in the search engine category was hard won by building a better product. Google started well behind and entered a market which was dominated by well-established players like Yahoo. And despite the billions Microsoft spent on developing its own search engine, Bing and growing its market influence, it couldn't convince anyone to use Bing.
It is 2025 and the DoJ is trying to convince the judge about what remedies should be imposed on Google. Out of many possibilities one has been discussed the most recently: there is the idea that Google should divest itself from Chrome, their browser which dominates with over 66% market share.
The second-place browser (though it’s not even close) is Safari (Apple) with 17%. In third and even more distant place is Edge (Microsoft) with 5%. To be fair, when one considers desktop computers only, Edge comes second, with 17%. Still, it is an embarrassing number for Microsoft, which has over 70% desktop market share.
One suitor for the Chrome browser is OpenAI. Now, let’s remember that OpenAI has an ax to grind. Last year, people at OpenAI reached out to Google and requested that they would like to use Google search service in ChatGPT. The request was politely declined.
As a side note, one wonders what answer did the good people at OpenAi expected? OpenAI's major investor is Microsoft with its Bing. Last year in July, OpenAI introduced SearchGPT, which was just a front end for Bing, to connect ChatGPT with real-time results from the Internet.
Despite headlines like 'OpenAI is taking on Google with a new artificial intelligence search engine' which predict that the days of Google are numbered, it looks like the task is much more difficult. And probably, OpenAI realized that the Microsoft technology is not that great. Did OpenAI people think that Google would help its competition and help them to realize a return on investment to its other competitor?
OpenAI sees it as an opportunity to obtain a high-end, mature product with maximum market penetration to use it as a client for its own product. But before that could happen, the potential buyer will have to find money.
Last year, after the trial, a valuation number of $20 billion for Google Chrome was floated. This week, the CEO of DuckDuckGo (a wannabe search engine - it is actually a front end for Bing) suggested the value is now $50 billion.
OpenAI is having a hard time raising money just to stay afloat. Adding another product to maintain and integrate into its offering is beyond its current capability.
But back to Google and its second ruling, declaring that Google illegally dominated two markets for online advertising technology.
Have you ever used Google Ads, where you bid against others to have your ad at the top of the search results? If 'yes', have you ever wondered why the price is $20/click and not $15 or $10? Google created this auction house which operates on the premise 'trust us, this is the best price'.
You never get to see how many advertisers are competing for the same search topic. Nor have you ever seen how much they were willing to pay. This is the main cash-cow for Google. It generates 75% of revenue for Google. It is this opaque box delivering results year over year to the company and its shareholders.
As you can imagine, Google is heavily fighting both rulings and it will take a few more years before we see any results. The recurrent pattern? There are already others entering the market which will upset the current big players. The world will move on and by the time we get the final ruling nobody will even remember what the fuss was about.