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HOW GOOGLE IS SQUEEZING OUT COMPETITORS AND MUSCLING INTO NEW MARKETS

HOW GOOGLE IS SQUEEZING OUT COMPETITORS AND MUSCLING INTO NEW MARKETS

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Published by Consumer Watchdog
TRAFFIC REPORT: HOW GOOGLE IS SQUEEZING OUT COMPETITORS AND MUSCLING INTO NEW MARKETS
TRAFFIC REPORT: HOW GOOGLE IS SQUEEZING OUT COMPETITORS AND MUSCLING INTO NEW MARKETS

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Published by: Consumer Watchdog on Jun 01, 2010
Copyright:Attribution Non-commercial

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02/27/2011

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1
T
RAFFIC
R
EPORT
:H
OW
G
OOGLE IS
S
QUEEZING
O
UT
C
OMPETITORS AND
M
USCLINGINTO
N
EW
M
ARKETS
 
A Study by I
NSIDE
G
OOGLE
 J
UNE
2,
 
2010
 
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Executive SummaryGoogle has been muscling into new web markets and greatly expandingits dominance of other web commerce sectors since 2007, when the websearch giant adopted a controversial new business practice aimed at steering Internet searchers to its own services.Google's dramatic gains are revealed by an analysis of internet traffic datafor more than 100 popular websites. Once upon a time, these sitesprimarily benefited from Google. Now, they must also compete with it. Inthe most comprehensive study of its kind to date, I
NSIDE
G
OOGLE
obtainedthree years of traffic data from the respected web metrics firm ExperianHitwise, allowing an analysis of Google's business practices andperformance that is unprecedented in scope.The data shows that Google has established a Microsoft-like monopoly insome key areas of the web. In video, Google has nearly doubled its market share to almost 80%. That is the legal definition of a monopoly, accordingto the federal courts, which have held that a firm achieves "monopolypower" when it gains between 70% and 80% of a market.
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The report examines whether Google has erected "barriers to entry" inmarkets such as video by manipulating its search results so that users aredirected primarily or exclusively toward Google's own services, such asYouTube.Google’s dominance in video and its huge gains in other markets such aslocal search and comparison shopping correlates with these increasingefforts by Google to promote its own services within search results. This
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practice, which amounts to a new business model, appears to be anabandonment of Google’s pledge to provide neutral search capability.The most striking example of how this practice enables Google to muscleits way into new markets is the lucrative market for local search. Googlenow inserts results from Google Maps into the first page of results frommost Google searches, driving enormous traffic toward Google Maps andaway from competitors. Google now has more than half the market forlocal search.The ultimate significance of these developments is that they spell a rapiddecline in choice for consumers. Increasingly, consumers who use Googleare placing themselves in a sort of virtual gated community, or what wasonce known as "a company town." You can go anywhere you like, as longas you use the company's roads. And you can buy anything you like, aslong as you shop at the company's stores.

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