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Why grill Google over web dominance? It has none

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Open ... And Shut Google chairman Eric Schmidt was recently hauled before the US Senate to answer antitrust inquiries. After all, Google dominates the online search market, with 64.8 per cent of the market in August 2011, according to comScore (and much higher market share, according to Net MarketShare), and increasingly abuses that power to disadvantage competitors and hurt consumers, according to some.

But among Google's trifling defenses - "Competition is just a click away" - is one very real fact: Google no longer has a lock on search. In fact, it has been steadily, even dramatically, losing market share for years.

In the traditional search market, Google is king. But that market is increasingly playing second fiddle to a host of other new online services, which may not be designated as "search," per se, but fulfill much of what Google used to do. As Schmidt declared (warning: PDF) in his testimony:

Google faces competition from numerous sources including other general search engines (such as Microsoft's Bing, Yahoo!, and Blekko); specialized search sites, including travel sites (like Expedia and Travelocity), restaurant reviews (like Yelp), and shopping sites (like Amazon and eBay); social media sites (like Facebook); and mobile applications beyond count, just to name a few.

Some will see this as disingenuous, designed to mask Google's dominance by painting the search market in broad strokes. Indeed, this is a common tactic in antitrust cases, where defendants try to define their relevant markets as broadly as possible, to make their particular share tiny in comparison.

But in the case of Google, it's actually true and it's doubtful that Schmidt and the Google executive team like it very much. Google may own the "index search market," but think about where people go to search for people (Facebook or LinkedIn), facts (Wikipedia), restaurants (Zagat - now owned by Google), Yelp, OpenTable, travel (Kayak, Travelocity, Expedia, Orbitz) and property (Zillow, Realtor.com) to name just a few. It's not Google. It's to the apps or services that specialize in a particular area.

So while it's true that Google's stranglehold on mobile search and associated ad spending is near 100 per cent, according to recent reports, it's equally true that most of the "search" consumers do on their mobile devices isn't the kind that Google controls. Just thinking through my searches yesterday on my smart phone, I used Facebook and Orbitz extensively and Google just once.

Nevertheless, some like Chris O'Brien of the Mercury News take a "sky is falling" approach to Google's continued dominance of traditional index search. This despite startups - even directly competitive startups like Blekko - apparently feeling no concern over Google's market share, and happily competing with Google head on or by carving out yet another corner of search that Google can't dominate with its aging index search approach.

And so Google is spending. A lot. It's spending away its profit in order to compete with the new kids on the search block like Facebook. Google took on a new chief executive, Larry Page, to make itself more nimble against these Lilliputian search competitors, competitors that have grown increasingly large even as Google has doggedly focused on its page rank approach to search.

Google remains an impressive company, one that dominates a particular category of the search market. But make no mistake: Google is increasingly losing the larger search battle as it is late to the party in social and other aspects of search. The US Senate, proving that it's never too late to be behind-the-times, has called Google on the carpet for old news, just as the US government got around to punishing Microsoft for its dominance after it had already lost its hold on the future.

Google may be guilty of many things, but search dominance is no longer one of them, however much the executive team in Mountain View may wish it otherwise. ®

Matt Asay is senior vice president of business development at Strobe, a startup that offers an open source framework for building mobile apps. He was formerly chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfresco's general manager for the Americas and vice president of business development, and he helped put Novell on its open source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears twice a week on The Register.

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