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Heavyweights on the rampage

Google fighting on two fronts as former friends fall out

Posted By Martyn Warwick , 16 March 2010 | 0 Comments | (1)
Tags: Internet Regulation legislation Finance

History is littered with stories of empires that believed they were invincible and so could take on the world, fight on several fronts, extend their lines to breaking point and still win. The same thing can happen in industry and Google is the latest to head down this rocky road.

Already at loggerheads overseas and in confrontation with the Chinese government over censorship issues, Google has decided to fight on the home front as well and has fallen out with its former ally, Verizon Communications of the US.

Strong rumour has it that Verizon is lobbying the US Federal Trade Commission (FTC) to block Google's US$750 million acquisition of the mobile advertising company AdMob.

Google's ambitions seemingly know no bounds and Verizon (along with many other mobile phone operators) is scared stiff that the purchase of AdMob is the necessary precursor to the Cookie Monster launching its own cellular venture.

Google is already well on the way to completing such a scenario. It has developed and rolled-out the Android mobile operating system and introduced a Google handset, the Nexus One. The logical next step is for it to become a fully-fledged mobile network operator in its own right. Indeed Google already owns part of the "4G" wireless broadband company Clearwire, so the portents are obvious.

Bloomberg News says the FTC is now "reaching out" to some of Google's many rivals and is eager to get their input on the AdMob purchase.

Meanwhile, over in the Far East, Google is playing a high-stakes poker game with the Chinese authorities.

Google has 36 per cent of the China search engine market (equivalent to 400 million users and growing by 25,000 a day).


However, it says it is "99.9 per cent decided" to pull out of the Chinese market altogether "within a matter of weeks" if it can't come to some sort of accommodation with the government over censorship "issues". That doesn't leave a lot of room for manoeuvre. And the trouble is that the Chinese are seldom the first to blink in stand-offs of this sort, as Rupert Murdoch discovered a few years ago when his Chinese satellite TV interests came close to biting the dust over the self same issue. In that case it was Murdoch who backed-down.

Faced with this thinly disguised ultimatum, the Chinese authorities say they are not prepared to compromise their Internet censorship regime just to allow Google to have a presence in the country.

In an ominous pronouncement on Friday last, Li Yizhong, the minister for industry and information technology, said: “If Google takes steps that violate Chinese laws, that would be unfriendly, that would be irresponsible, and they would have to bear the consequences.”

Eric Schmidt and his top bods would do well to read and reflect upon Shelley's sonnet "Ozymandias":

"I met a traveler from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal these words appear:
“My name is Ozymandias, king of kings:
Look upon my works, ye Mighty, and despair!”
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away."

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