Google Makes a Case That It Isn’t So Big

Google handles roughly two-thirds of all Internet searches. It owns the largest online video site, YouTube, which is more than 10 times more popular than its nearest competitor. And last year, Google sold nearly $22 billion in advertising, more than any media company in the world.

With all those riches and more, how is Google a relatively small company, one that is vulnerable to competition and whose luck could turn any day?

Dana Wagner is happy to explain.

Mr. Wagner, who is Google’s “senior competition counsel,” faces the Sisyphean task of convincing the world that his employer is not unassailable.

“Competition is a click away,” Mr. Wagner says. It’s part of a stump speech he has given in Silicon Valley, New York and Washington for the last few months to reporters, legal scholars, Congressional staff members, industry groups and anybody else who might influence public opinion about Google.

“We are in an industry that is subject to disruption and we can’t take anything for granted,” he adds.

Google has begun this public-relations offensive because it is in the midst of a treacherous rite of passage for powerful technology companies — regulators are intensely scrutinizing its every move, as they once did with AT&T , I.B.M. , Intel and Microsoft . Some analysts say that government opposition, here or in Europe, could pose the biggest threat to Google’s continued success.

The Justice Department derailed an important partnership between Google and Yahoo in November because of concerns it would cement Google’s dominance and reduce competition. And Google now faces three new government antitrust investigations.

The Justice Department is examining the hiring practices at Google and other technology companies, and it is investigating a class-action settlement between Google and groups representing authors and publishers. The Federal Trade Commission is looking into ties between the boards of Google and Apple.

None of the investigations take aim at Google’s core advertising business. And unlike other technology giants in years past, Google has not been accused of anticompetitive tactics. But the investigations and carping from competitors and critics have Google fighting to dispel the notion that it has a lock on its market, even as it increases its share of search and online advertising.

MORE FROM NYTIMES.COM

Current DateTime: 01:56:35 10 Nov 2009
LinksList Documentid: 22528754

• Business
• DealBook Blog
• Small Business News

Eyes are rolling, especially in reaction to the idea that Google is a relatively small player in a giant market. “They describe where they are in a market under a kind of a fairy-tale spun gloss that doesn’t reflect their dominance of key sectors,” said Jeff Chester, executive director of the Center for Digital Democracy. “Google search is an absolute must-have for every marketer in the world.”

Microsoft declines to comment on its archrival’s efforts. But during Mr. Wagner’s presentation to journalists in San Francisco this month, Microsoft P.R. handlers, who had learned the gist of the presentation, were e-mailing reporters offering rebuttals of Google’s arguments. Mr. Wagner faced a barrage of pointed questions.

Hand-wringing over Google’s power is not new. But some experts say that the steady stream of headlines about antitrust investigations could tarnish Google’s image with consumers, who by and large still view the company, and its growing list of free and innovative online services, positively.

“No company, whether it is Google, Microsoft or anyone else, wants to be portrayed in a negative way,” said David B. Yoffie, a professor at Harvard Business School. “It is absolutely right for Google to be worried, to be prepared, to be paranoid and to respond accordingly.”

Kent Walker, Google’s general counsel, said the company expected its success would lead to greater scrutiny of its actions.

• Tech Check with Jim Goldman

“The goal isn’t charm so much as it is explaining our business,” he said. “We think we have a great story to tell.”

The task of telling that story has fallen, in part, to the boyish, 33-year-old Mr. Wagner, a former antitrust lawyer at the Justice Department who drops words like “goofy” and “wacky” with an aw-shucks grin into discussions of complex legal and economic issues. In contrast to Microsoft a decade ago, whose executives would rarely hide their disdain for regulators, Mr. Wagner speaks of his former colleagues at the Justice Department in deferential tones.

“They definitely care about doing the right things for users and consumers,” he said. “My company cares about doing the right things for users and consumers.”

Mr. Wagner’s job has not been easy. The slides he uses in his presentations have been circulating long enough that Consumer Watchdog, an advocacy group that is critical of Google, has posted an annotated version of them that disputes nearly every one of Google’s assertions.

CONTINUED : Television, newspapers, billboards

---

1 | 2 | Next >