Google facing inquiry by Texas attorney general

By Michael Liedtke
Saturday, September 4, 2010

SAN FRANCISCO - Google's methods for recommending Web sites are being reviewed by the Texas state attorney general in an investigation spurred by complaints that the company has abused its power as the Internet's dominant search engine.

The antitrust inquiry, disclosed by Google late Friday, is the latest sign of the intensifying scrutiny facing the company as it enters its adolescence. Since its inception in a Silicon Valley garage 12 years ago, Google has gone from a quirky startup to one of the world's most influential businesses, with annual revenue approaching $30 billion.

A spokesman for Texas Attorney General Greg Abbott confirmed the investigation. He declined to comment further.

The review appears to be focused on whether Google is manipulating its search results to stifle competition.

The pecking order of those results can make or break Web sites. Google's search engine processes about two-thirds of the search requests in the United States and handles even higher volume in some parts of the world.

That dominance means a Web site ranking high on the first page of Google's results will probably attract more traffic and generate more revenue, either from ads or merchandise sales.

But being buried in the back pages of the results, or even at the bottom of the first page, can be financially devastating and, in extreme cases, has been blamed for ruining some Internet companies.

European regulators have been investigating complaints that Google has been favoring its own services in its results instead of rival Web sites.

Several lawsuits filed in the United States have also alleged that Google's search formula is biased.

Google said it thinks Abbott is the first state attorney general to open an antitrust review into the issue.

"We look forward to answering [Abbott's] questions because we're confident that Google operates in the best interests of our users," Don Harrison, Google's deputy general counsel, wrote in a Friday blog post.

Harrison said Abbott has asked Google for information about several companies, including: Foundem, an online shopping-comparison site in Britain; SourceTool, which runs an e-commerce site catering to businesses; and myTriggers, another shopping-comparison site.

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