US Studying Google for Antitrust? Really?

The Wall Street Journal broke the news that the FTC is ready to subpoena Google for information on its trade practices.
This is likely to help Google's competitors. But it's hard to see how it's going to help consumers. And antitrust law in America is fundamentally designed to give consumers a fair shake.
(I'm an enthusiastic user of many Google services, but I don't own any stock in the company).
It's hard to imagine a company that treats consumers more fairly than Google does. It figured out a way to let people find almost any information free. It did it by giving them ads for products and services that they were likely to want rather than bombarding them with irrelevant ads. That has worked so well for businesses that they have halved their advertising in newspapers and generally reduced ad budgets because they get more effective returns for less money online.
Google has used its incredible profitability to expand its footprint on the Internet through more free services, most of which have only indirect financial returns, if any. It stores much of the world's video information free on YouTube. It runs a great free e-mail service that prevents spam better than any costly corporate e-mail services I'm aware of. It runs free Google office apps in the cloud, so you can access them from any computer. It introduced a really good, credible alternative to the iPhone at a time when Blackberry couldn't figure out how and Microsoft was fiddling and diddling with shrinking a bloated operating system into a pocket-sized package.
Google even stood up to the Chinese and moved out of that country -- an incredible example of corporate morality. Much of the criticism of Google comes from competitors and advertisers who want to game its system and bother innocent consumers with unwanted sales pitches rather than the products they actually want.
The FTC better not mess up the Google system to the point that consumers get less.
As Dan Lyons points out at Daily Beast this is certainly bad for Google. Even though the Feds may not succeed in getting the courts to find Google's actions illegal or force many operating changes, Google will have to think about something besides the customer benefit of any new service it provides. Everything it does from now on will be constrained by the need to consider what the government thinks.
The government's unsuccessful antitrust prosecution of IBM marked the beginning of the end for Big Blue's long run of dominance. Similarly for Microsoft. Those cases hinged on the giants' abilities to bundle software with existing mainframes or operating systems in a way that prevented competition from getting a toehold. Locking out competition is bad for consumers, and those actions arguably led to a better marketplace.
From a competitor's point of view Google undoubtedly looks like a voracious monopoly. But there are serious, cash rich competitors in the same space that can take care of themselves. Apple has a market cap substantially higher than Google's, a lock on the most lucrative smart phone and tablet users and control of the music industry. Microsoft has revenue and cash flow that would make most national treasuries weep, and a lock on the CIOs of the world. Facebook gets a lot more time everyday with Internet users than Google does and it knows a lot more about them.

Google provides a greater consumer service, for less money, than any other company in high tech (although Facebook is coming close). It will be tragic if that is lost due to antitrust action.

Brain-free law-making

The NY Times has an interesting story on state legislators proposing bans on listening to music players or texting while bicycling or walking. http://www.nytimes.com/2011/01/26/us/26runners.html?_r=1&src=fbmain
It seems to be a classic example of legislation by anecdote, unimpeded by actual knowledge.
In fact, pedestrian fatalities declined 16% over the time that Americans presumably increased their walking while distracted. Fatalities dropped to 4,091 in 2009 from 4,892 in 2005. The story says there was a slight upturn in 2010, but that doesn't seem to have been the reason legislators decided to act.
Among the states, Arizona and Florida had the largest increases in pedestrian fatalities, followed by North Carolina, Oregon and Oklahoma. The study doesn't say whether those states had the largest increase in sales of iPods or Blackberrys -- facts that might have provided a rationale for the proposed laws.
New York State Sen. Carl Kruger of Brooklyn, proposed a bill that would apply to pedestrians in cities of one million or more. “This is not government interference,” he said. “This is more like saying, ‘You’re doing something that could be detrimental to yourself and others around you.’ ”
Kruger has a funny way of defining "not government interference."
Examples like this of legislating for the sake of legislating are enough to turn me into a full-fledged libertarian.

New Job site threatens monster.com

I just read a story in the Washington Post about a new domain, "jobs" that looks like a big threat to Monster.com and CareerBuilder.com. It could do to those job sites what CraigsList did to newspapers' classified ads.
The jobs domain was authorized by the Internet registry, ICANN. It was opposed by newspapers and long-term nemesis Monster alike. The jobs domain lets companies post help wanted ads for free. You go there by typing something like http://ma.usa.jobs/writing, and see a list of postings. Companies love it because they can put up ads for free. Monster.com charges up to $395 for an add, or $230 a piece for ten or more. For a big company with a lot of openings, it's a significant saving.
If you're job hunting -- or hiring -- its worth checking out.

Official Google Blog: An update from the Chairman

Official Google Blog: An update from the Chairman

http://billbulkeley.blogspot.com/2011/01/silicon-valley-boardroom-shakeups.html

Silicon Valley Boardroom Shakeups

Two of the biggest companies in Silicon Valley underwent big boardroom shakeups yesterday. At Google, Eric Schmidt, the professional manager who has headed the company since 2001 relinquished the CEO title to co-founder, Larry Page. At Hewlett-Packard, the world's biggest technology company by revenue, four board members departed with five new ones coming on.
The Google change is a big deal. I'd argue that Google is the most important company on the planet -- more so than Facebook, IBM, Apple or News Corp. The Google triumvirate has created an amazing business model. And it is also a cultural and political force with its own foreign policy. Google's stance against Chinese censorship (allegedly pushed by co-founders Larry and Sergey) was an important development in world affairs last year. Its stewardship of many individual's documents, e-mail, photos, videos, phone calls and blogs is a bedrock of Internet existence.
Eric Schmidt, who I met a few times while covering Sun and Novell, has an amazing ability to foresee how technology will impact business and the economy. Google has made a series of smart moves through acquisition and invention during the decade he has been there. I'm not a shareholder, so I don't have that perspective. But as a citizen of the globe, I hope the change won't derail Google.
The good news is that the co-founders presumably are more attuned to the company motto -- Don't Be Evil. The risk is that Schmidt's acute sense of how Google fits into the wider world will be subsumed to a Google-centric view.
Hewlett-Packard, on the other hand, doesn't really matter. It's a collection of unrelated commodity businesses that don't lead in anything but cutting prices. If the whole company blew up, someone else would license Canon's printer engine technology. The same Chinese factories would make the same PCs and laptops. Another Indian body shop would take over the offshored services. The Intel-based enterprise servers would be made by some other Microsoft spawn. And only the legacy enterprise equipment would retain an H-P identity. Mark Hurd managed to make H-P profitable, but the decision to slash R&D has made it largely irrelevant.

Chinese mothers

There was a fascinating piece in Saturday's Wall Street Journal by a Chinese-American mother who is a law professor at Yale. She contrasted her parenting style with that of typical American moms (and dads, including her husband). The message was that while her demands for perfection from her daughters sound autocratic and unreasonable, they produce superior children. The implication was that her methods are typical not only of Chinese-American mothers but of mothers in China as well, raising some interesting questions about the future competitiveness of our two societies.
I certainly haven't raised my children the way she did, and I suspect some of the reason is laziness and lack of self-discipline.
While her methods sound draconian, they are also incredibly time consuming. I don't think many American mothers or fathers have the discipline and determination to spend the hours working with their kids that being a Chinese mother seems to require. We all try to spend quality time with children, but not many spend the amount of time that Amy Chua seems to. I suspect her kids benefit from the amount of time and attention they get, even if they sometimes rebel at the content. She may sometimes tell them they're "garbage" but the amount of time she spends must tell them that she thinks they're incredibly important.
In one painful anecdote about forcing her daughter to learn to play a difficult piano piece, she describes spending at least four hours of yelling, screaming and listening to badly played piano. Not many parents have the energy or make the time for the sort of effort.
In the U.S., you sometimes hear about football or baseball players who are coaches' kids who spent that sort of time with their Dads. And then there's Tiger Woods. But very few parents will spend that kind of time practicing math or language or a musical instrument with a child. It's so much easier to put the kid in front of a video screen or a computer game.

Is Groupon really more valuable than Twitter?

I was surprised by the values placed on two of the hottest closely held companies -- Groupon and Twitter -- both for their sheer size and the fact that Groupon is worth more.

Groupon, a gimmicky coupon site, was valued at 50% more than Twitter, which has become core to the lives and marketing strategies of millions of people.

All Things Digital, the Wall Street Journal-affiliated Web site, is reporting that Google will pay up to $6 billion for Groupon.

And TechCrunch reports that VC giant Kleiner Perkins wants to invest in Twitter at a valuation of $4 billion.

Those are eye-popping numbers -- reportedly ten times Groupon's anticipated revenue this year, and nearly 30 times the Twitter revenue for 2010 that was projected in some stolen documents a year ago.

Groupon has a lot of revenue for a two year old company. But it only has 12 million users, and it already has a lot of competitors. As a happy user of Groupon, I can't differentiate it from the other coupon sites I use like EverSave. Setting up a local couponing site would seem to be easy to do for anyone who can inspire a sales force. Yellow Book salespeople, whose jobs would seem to be in jeopardy now, would seem like obvious competitors.

Twitter has 175 million users and it has a huge role in the social-media zeitgeist. In terms of mindshare it's already the equivalent of Facebook and YouTube. It's going to be very hard for anyone to compete for its niche. Even better micro-blogging technology wouldn't give many people a reason to shift away or add another service.

Obviously, the Groupon valuation is based on real money. Twitter's value is much more conceptual. Still, if I had the opportunity to own 1% of either company, I'd opt for Twitter.