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Web companies fear Google's reach

A look at some of the major deals the Web giant has made or attempted in an effort to expand its reach.

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By Jia Lynn Yang
Monday, December 13, 2010; 12:37 AM

Google this year has been gobbling up Web companies that look nothing like Google, from a social gaming start-up to a firm that powers most online sales for the airline industry.

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As the tech giant spreads its reach, it is making new enemies who fear that once Google steps onto their turf it will use its almighty search engine to quash them. Now, these critics are pushing antitrust officials to block some of Google's mergers or build a blockbuster case against the search behemoth, reminiscent of the government's battle with Microsoft.

Yet as Google expands its ecosystem of products - a spread that already includes e-mail, a digital bookstore and cellphone software - it's only become a bigger puzzle for regulators.

Antitrust law was crafted with bricks-and-mortar companies in mind, companies whose business lines fit into neat categories, not a firm like Google whose influence is spreading lightning-quick into different markets that are connected only by the Internet.

Google says its acquisitions help the company build a bigger menu of useful products for consumers. And the tech firm accuses competitors of waging their battles against the company in Washington, rather than going toe to toe on the Web.

"We're a big company. We're disruptive. We're going to get scrutiny from governments around the world, and that just comes with the territory," said Adam Kovacevich, Google's senior manager of global communications and public affairs.

Antitrust enforcers at the Justice Department and the Federal Trade Commission are examining Google carefully with each big merger it proposes. But they have yet to allege the company is acting illegally as a dominant player on the Web.

Regulators in other countries have begun to act. The European Commission said last month that it is investigating charges that Google is suppressing search results for firms offering rival services, such as price comparisons for shoppers. The Texas attorney general is looking into similar allegations.

Antitrust officials everywhere are essentially turning over the same question: Can Google compete fairly with other companies when its go-to search engine determines what users find - or don't find - on the Internet?

Nowhere is the debate over Google's growing reach more apparent than in the Justice Department's ongoing review of Google's $700 million bid to buy ITA Software, a little-known company that probably powered your last online flight search.

ITA's technology, which is used by Web sites such as Orbitz, Kayak and Microsoft's Bing, transformed travel by letting consumers search directly for flights offered by multiple airlines, without the aid of an agent. American, Continental, Southwest and United airlines also depend on ITA for their online flight sales.

Critics say Google will have too much control over searches for flights if it controls ITA. In recent months a number of companies have told regulators that Google - which says it wants to build its own flight-search offering - could manipulate the results from its search engine to give its travel service a higher ranking than its competitors'. They point to the fate of such companies as AOL's MapQuest, which shriveled in the face of Google Maps, which regularly lands at the top of Google searches.


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