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August 20, 2008 Est 1999 Scotland's award-winning independent newspaper
Search giant becomes the evil enemy to net’s little guys
Hippy-ethos corporation accused of abusing its position by stifling innovation from start-ups
By Peter John Meiklem, Media Correspondent

WITH ITS HIPPY-DIPPY INFORMAL corporate motto of "don't be evil", Google has become a corporate juggernaut, dominating the UK's search market with a 74% share.

Yet despite enjoying the public's affection, with billions of users every day, the search giant is winning fewer friends in the business sphere.

A YouGov poll carried out last week among the UK's leading internet entrepreneurs revealed 44% of those attending thought the search engine was the biggest threat to their businesses' online growth. Only 6% felt traditional media, such as newspapers or radio, posed an equally serious threat.

According to the latest figures from internet measurement group Hitwise, Google has 74% of the UK search market. Its nearest competitor, Yahoo, has a market share of just 3%.

The YouGov poll, carried out at last weekend's Online Founders Forum event in Hampshire, is the latest sign of a growing backlash against the search engine.

In March, the company was heavily criticised for making businesses bid against their competitors for the use of their own trademarked names on the "sponsored links" section of the search engine's site. And last Tuesday, the Belgian newspapers group Copiepresse announced it was seeking 49.2 million from Google as the result of a copyright lawsuit it won in 2006, suing Google for using its newspapers' content .

With several Scottish traditional media companies, such as Sunday Herald owners Newsquest and Scotland's main commercial broadcaster, SMG, finalising the details of their new online ventures, Google's dominance of the search market has been increasingly being criticised as monopolistic.

Steve Leach, chief executive of Bigmouthmedia, one of Scotland's biggest search engine marketing companies, told the Sunday Herald: "The 44% figure is much lower than I thought it would have been. For anyone selling a product or a service related to the internet, the biggest threat is Google."

So what's the problem with the world's favourite search engine, a service valued by many users, including Leach, for its efficiency and its free-to-use business model?

"It's the oldest business trick in the book - undercutting the opposition," said Leach. He fears the search engine has become too big, labelling it a "classic corporate dinosaur." He said the free "tools" Google offers, such as maps and a device to personalise the news stories a user reads, are stifling innovation.

"You could have spent five years developing the software, and along comes Google and gives it away for free. They have people keeping their eye on almost anything you can think of."

Alistair Brown, head of digital at SMG, says he knows of one Edinburgh company who recently lost out after an idea for an online product they had spent years developing popped up on Google for nothing.

"I'm sure that's happened all over Scotland. But that's a risk you take - that somebody will come up with the same thing. They have got people working on things you can't even imagine yet. But when they do something, they do it so well it's difficult to compete with them."

Google makes most of its money from paid-search advertising. When a user clicks on a link - called an "adword" - the company pays Google a fee for directing the user in its direction. In 2007, the company made a profit of $4.2bn (£2.1bn), up 40% on 2006.

Paul Adams, head of paid search at Ambergreen, another of Scotland's leading search companies, says businesses are worried about the search engine only because they don't understand it.

"It seems a bit of a silly thing to say, because Google is the main way traffic is driven to most businesses' websites. I would see it more as an opportunity than a threat. As long as businesses have a competitive product they will do fine."

A Google spokesperson said the company was a supporter of business.

He said: "Google specifically develops products that are designed to be affordable and easy to use so that our partners can be as innovative and competitive as possible. Our products enable businesses of all sizes to store and share huge amounts of information at no cost and from wherever they are in the world."

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Posted by: Ian Watson, Glasgow on 2:11pm Sun 1 Jun 08
hmm... the telling part of this article is at the end" "businesses are worried about the search engine only because they don't understand it".

As for Google as a "classic corporate dinosaur", err .. that label is surely more appropriate Newsquest and SMG, the two traditional media companies mentioned.
Posted by: Tim Barlow, Edinburgh on 9:37am Mon 2 Jun 08
"corporate dinosaur" may not be the best chosen phrase for a company that is expanding and innovating at such a rate, however Steve Leach is absolutely right about the threat Google poses to almost any internet-related innovation.

Any plan for an internet-related business should be asking "why won't Google do this?"
Posted by: Tim Barlow, Edinburgh on 9:57am Mon 2 Jun 08
And here's just one example of such a threat (/opportunity?): http://www.google.co
.uk/intl/en/help/mer
chantsearchbeta/comp
are.html
Posted by: Alistair Brown, Glasgow on 11:34am Mon 2 Jun 08
Despite the quote I actually disagree with the central theme of this article - my thinking is more aligned with Paul at Amber Green. I believe Google are very much a positive force on the web and bring more opportunity than threat to most organisations large and small - from start-ups to large media businesses.

It may be that companies who have poor products or services or who are ill prepared for the future are more likely to view Google as a threat.

Alistair Brown
Head of New Media
SMG plc

Posted by: Tim Barlow, Edinburgh on 12:28pm Mon 2 Jun 08
Alistair, I am not sure it's a case of siding with one or other view. Google is both a threat and an opportunity.

They do however have the ability to swat many an internet company in the same way that Tescos can walk over a corner shop.
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