Does Google (GOOG) have a problem with authority?

avatar By: IS
Date posted: 11.12.2010 (5:10 am) | Write a Comment  (2 Comments)

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Google is a unique company in so many ways and I am certain a very big fan of the tech giant but it’s always a bit surprising to see Google take such a big stance against authority. You will probably all remember when Google decided to stand up against China’s government in what turned out to be a very public battle that left Google in a very bad position in the top emerging market in the world.

Was Google right to challenge China’s government over censorship and other restrictions?

It’s difficult to say because I think you could argue that Google’s shareholders have the desire for Google to make profits, not try to change the human rights record of the Chinese government. Did Google accomplish anything in terms of better future profits by going head on with China? It certainly doesn’t look that way as Google has been more or less put in a corner in China. It still operates a its search engine but to a much smaller extent and with limited operations. That has left China wide open for Baidu to dominate.

What Baidu’s domination means…

Not only is China a huge market that is generating important growth, but it is also slowly building what could one day become a rival for Google. How? Baidu is already one of the top search engines in the world and has little to no competition in China. That means the company can focus all of its energy on upcoming expansion outside of China without having to worry about defending its home turf.

That is quite different from Google which is waging war but also trying to defend its home market share against a strong Microsoft-backed Bing, which is using Microsoft’s deep deep pockets to gain market share. How bad is it? Bing has actually been losing billions of dollars every year as it continues to focus on growth, product improvements and market share. Competition is always a challenge but that is even more true when that competition seems to have no cap on its expenses…

Personally, I have to think that battling the Chinese government might turn out to be a costly mistake for Google although that will have to be seen in the future.

Google’s latest attack.. the US government

If you have not heard, Google is suing the US government for its decision to not consider Google apps when it gave its latest software contract to Microsoft. Going to courts against Uncle Sam is no small challenge and the posisiblity of winning seems small. But even more important is the possibility of getting the government to side against Google.

To be honest, it’s not surprising to see that Google was never seriously considered as an alternative to Microsoft. Why? Because as good as Google is, it is still battling against what is perceived to be a monopoly. Some users and companies have switched to Google but overall, 99.9% still count on Microsoft. So to expect the federal government, an institution more traditional than any other, to go with Google which has never and less tested products seemed risky. It would also be putting itself at odds with Microsoft which is a very powerful company in the US obviously.

That being said, Google is right

I don’t think that in this specific case, Google is making a mistake by suing the US government. It probably will not win but I don’t think that is really the point. The objective is or should be to to be considered a viable alternative to Microsoft’s Windows & Office software suites. That in itself would be an amazing achievement and if it can reach that status at the level of the US government, it will also be able to be “considered” at large multinationals. That is probably the missing part in the puzzle for Google’s software division. Why? Because I think that once Google Docs & Google Apps will be considered acceptable alternatives, it will be easy to compete on price with Microsoft which will do two major things:

-Open great doors to Google’s software division
-Hurt search competitor Microsoft badly

What are your thoughts on the subject?

Do you think suing the US government could backfire? Is it wasted money?

More on this topic (What's this?) Read more on Google, Investing in China at Wikinvest
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2 Comments

  1. Comment by Lubomir — November 12, 2010 @ 3:32 pm
    avatar

    Google is right. Should win. Nothing good or smart can come from the head if the bald doped up dancing monkey who is at the helm of softy.
    Google is the future.

  2. avatar

    [...] with the top Chinese internet company. As well, it makes it much more difficult for Facebook to be kicked out of the country as that would mean the country would be slapping Baidu at the same time…It’s a simple [...]

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