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Antitrust row: How mobile revolution saved Google's day
New York Times
San Francisco, January 08, 2013
First Published: 23:17 IST(8/1/2013)
Last Updated: 02:58 IST(9/1/2013)

When the Federal Trade Commission decided last week to close its antitrust investigation of Google without charges, one important factor, although hardly mentioned, was just beneath the surface: the mobile revolution.

Google has repeatedly made the argument - and the commission ultimately agreed - that the speed of change in the technology industry made it impossible for regulators to impose restrictions without stalling innovations. Exhibit A is the mobile device. Nowhere has technology changed as rapidly and consumer behaviour as broadly. As people abandon desktop computers for mobile ones, existing tech companies' business models are being upended and new companies are blooming.

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"Mobile is very much a moving target," said Herbert Hovenkamp, a professor of antitrust law at the University of Iowa who has been a paid adviser to Google. "This is a market in which new competitors come in a week's time."

When the commission began its investigation 19 months ago, for instance, the iPhone did not have Siri voice search, Apple did not have its own mapping service, and Yelp's mobile apps had no ads. By the time the inquiry concluded, all of that had changed. Google had new competitors on all sides trying to chip away at its hold on the mobile search and advertising market.

Still, Google is even more dominant on mobile phones than on desktop computers. It has 96% of the world's mobile search market, according to StatCounter, which tracks Web use. It collects 57% of mobile ad revenue in the US, while Facebook, its nearest competitor, gets just 9%, according to eMarketer.

But, analysts say, as people change their search habits on mobile devices - bypassing Google to go straight to apps like Yelp's, for example - that dominance could wane, or a competitor could swoop in and knock Google off its perch.

One of the investigation's main targets was Google's practice of pulling information from the Web and showing it on search results pages, so people do not have to click on links to get what they want. That is even more important on mobile devices, where people do not have the space or patience to click on several links, said Amit Singhal, Google's senior vice president for search.

"The rate of speed at which mobile search is moving, you just have to out-innovate everyone else," Singhal said. "That's the only way you win."


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