Google told media outlets on Thursday that the Federal Trade Commission is eying CEO Eric Schmidt's dual membership on the board of Directors for Google and Apple as a potential violation of the Clayton Antitrust Act of 1914. Though initially not rivals, the two companies are poised to become competitors once more handsets running Google's Android platform become available to challenge Apple's iPhone.
Though the search-engine giant is coming under increased government scrutiny in several areas, this is only natural given the company's explosive growth, said Adam Kovacevich, senior manager of global communications and public affairs at Google.
"We believe that Google promotes competition and openness online, but we haven't always done a good job telling our story," Kovacevich said. "That's why we have recently been meeting with policy-makers, think-tank representatives, academics, journalists, ad agencies, and trade associations -- in the U.S. and Europe."
Navigating the Mind Field
Schmidt said Google has a heightened awareness that every move it makes is going to be intensely scrutinized. For this reason, Google recently took steps to slow the process of reaching final agreement on its book-search settlement after three library associations raised concerns that the deal could raise costs and violate readers' right to privacy. "We are more careful about when and how we do things that will raise concerns from any party, but it hasn't prevented us from doing anything," the San Francisco Chronicle quoted Schmidt as saying.
However, Schmidt draws the line when people begin comparing Google to Microsoft in the years leading up to the software giant's antitrust settlement with the U.S. Department of Justice. "They obviously don't remember the old Microsoft," said Schmidt, the Chronicle reported. "Go back to 1997 and look at the business tactics that Microsoft used."
The irony is that Microsoft intends to cite Google as an antitrust example when it defends itself against anticompetition charges before the European Commission next month, arguing that any mandate to force Microsoft to promote competing browsers would strengthen Google's stranglehold on the online advertising market. "Not only would Google's browser Chrome suddenly be on all Windows PCs, but it would strengthen Google's dominance in search advertising," a source with direct knowledge of Microsoft's legal defense told The New York Times.
Schmidt also told media outlets on Thursday that he believes Google's unprofitable YouTube unit will eventually become a profit and revenue driver for the company. However, he refrained from predicting just when this would happen. According to comScore, Google's YouTube was the top U.S. video property in March with about 5.9 billion videos viewed -- equivalent to a 40.9 percent share of the online video market. Google Sites also eclipsed the 100 million online video-viewer threshold once again in March, after first achieving the milestone in December, the research firm said.
The problem is finding ways to convert all those video views into revenue. Still, the search-engine giant says it's monetizing hundreds of millions of video views in the U.S. every month -- more than any other video site even has total views. "We have made great strides in expanding the amount of inventory available on the site -- from new premium content partnerships, to the expansion of the YouTube Partner Program to thousands of users, to the hundreds of partners using our Content ID tools to monetize user-uploaded content," said Aaron Zamost at Google Corporate Communications. "And we continue to improve our ad formats to help partners generate more and more revenue from their videos."
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