The Rise — and Fall? — of Google
Google’s dominance of the internet could bring them under threat of antitrust action.
- Since its founding in 1998, Google’s rise has been meteoric. But has the company grown too big?
- In Europe, Google accounts for more than nine of every ten Internet searches.
- As of early 2015, Google accounted for 79% of the Internet searches performed in the United States.
- 90% of Google’s $66 billion in revenues in 2014 came from advertising on its web properties.
Since its founding in 1998, Google’s rise has been meteoric. But has the company grown too big? There are those who argue that its dominance of key aspects of the Internet warrants antitrust action, whether by authorities in Europe, the United States or elsewhere.
Do you know what Google’s current market share is?
A. 92% is correct.
In Europe, Google accounts for more than nine of every ten Internet searches, according to web statistics firm StatCounter. When the European Commission formally charged Google on April 15 with violating EU antitrust laws, it alleged that the company’s dominance in search enables it to harm customers and competitors by favoring its own shopping comparison services over those of its competitors.
Compared to Google’s 92% market share, the second-ranking search engine, Microsoft’s Bing, is very small. It is used for less than 3% of all Internet searches in the EU. Microsoft also provides the results for the Yahoo search engine. Taken together, Microsoft provides the results for about 5% of European searches.
One of Google’s major competitive advantages in Europe is that it operates search sites for every major European language. (There are 24 official languages in the 28-member European Union.) While competitors such as Seznam in the Czech Republic or Vinden in the Netherlands are most useful to speakers of Czech and Dutch, they are not as well known to users outside their home countries.
Microsoft, Google’s primary competitor in Internet search, is itself no stranger to Europe’s antitrust authorities. Over the past decade, the European Commission has fined Microsoft €2 billion ($2.1 billion) for failing to comply with various antitrust rulings.
B. 79% is also correct.
As of early 2015, Google accounted for 79% of the Internet searches performed on desktop and tablet computers and mobile devices in the United States. While Google is thus the dominant search engine in its home market, its lead there is decidedly smaller than in Europe.
As in Europe, the Microsoft-provided results for Bing and Yahoo had a firm hold on second place, accounting for a combined 18% of all searches conducted in the United States. Fourth-ranked AOL accounted for a mere 0.4% of searches, according to StatCounter.
Microsoft’s share of U.S. searches has increased in recent months, a shift that has come at Google’s expense. This was, however, not the result of a newfound consumer preference for Bing or Yahoo over Google.
Instead, the shift occurred after Mozilla replaced Google with Yahoo as the default search engine in its Firefox web browser, the third-most popular browser worldwide. Mozilla reportedly made the switch because Yahoo agreed to share a greater percentage of its search revenues with Mozilla than Google had.
C. 71% is also correct.
Apple gets credit for having launched the smartphone revolution with the iPhone in 2007. However, in recent years Apple has progressively lost market share to smartphones running Google’s Android operating system.
In Europe, Android runs on 71% of mobile devices, followed by Apple’s iOS (21%) and Windows Phone (7%), according to IDC, a market analysis firm. In the United States, Android is even more prevalent, accounting for 77% of the mobile operating system market, compared to Apple’s 20% and Windows’ 3%.
While Google does not charge licensing fees to phone manufacturers, the Android mobile operating system ultimately contributes to Google’s bottom-line.
Approximately 90% of the company’s $66 billion in revenues in 2014 came from advertising on its web properties. And Android devices, when signed into a Google account and running Android apps, enable the company to collect a vast amount of data on users’ tastes and purchasing habits. This allows the firm to better target ads to consumers. Google also earns significant revenues by selling apps for Android devices.
D. 44% is also correct.
Google plays a dominant role in search and smartphone operating systems in Europe and the United States. Its Chrome web browser is also the market leader among web browsers in Europe and the United States — though its lead in this market is much narrower.
Chrome — which comes with Google set as its default search engine — has a 44% market share in Europe (matching its global market share) and 37% in the United States. Worldwide, none of its competitors — including Firefox, Safari and Microsoft’s Internet Explorer — have more than 15% of the market.
But while Google enjoys dominant positions for some of its core products in Europe and the United States, its position in China, the largest and fastest growing Internet market, is much weaker.
Google had a 30% share of China’s Internet search market in 2010, when the company announced it would no longer comply with China’s request to censor results. Since then, with many Google services blocked, its share has plunged to 2%, allowing home-grown competitors Baidu (72% of searches), Haosou (12%) and Sogou (9%) to grow in popularity.
Moscow-based Yandex now accounts for 41% of Russia’s Internet searches, a strong second to Google’s 50% market share. In contrast, in India, with its large population of English-language speakers, Google accounts for virtually all Internet searches, at 97%.