Google is especially known for its search business. In fact, many people now say they
“googled it” when explaining that they searched the Internet for information on a particular
subject. Google’s market share of the search markets is estimated to be about 75 percent in
the United States and an even higher 90 percent in Europe. In fact, many argue that this level
of market share gives Google an effective monopoly in these markets. Of course, this level of
market share has given Google significant power with advertisers and customers, power which
the firm can use against its competitors. For example, the Federal Trade Commission (FTC) in
the United States has stated that Google has pressured sites such as Yelp, TripAdvisor, and even
Amazon to allow it to obtain information on users of their sites. Additionally, the FTC argued that
Google has prevented advertisers from placing advertisements on other search engines. But,
the FTC also stated that Google had violated no laws. Google’s two largest rivals in the search
business are Bing and
Yahoo, both of which
have about 12+ percent
of the market. Yet, with
continuing changes at
other Internet-based com-
panies, firms such as
Amazon and Facebook
may become important
search market rivals in the
near future by changing
the focus of online shop-
pers. These companies
now compete for advertis-
ers in a number of markets.
Google is much more
than a search business.
It has entered many mar-
kets and is doing research
on and/or preparing to enter many more markets. For example, Google recently opened its
first Google retail shop in London and plans to open several more. The intent is to compete, at
least partially, with Apple’s successful retail stores. In another service market, Google recently
introduced Android Pay as a competitive response to Apple Pay and Samsung Pay (also in
response to Apple’s service product). Google has introduced a new flight search tool, Google
Flights, that helps customers find the best (including cheapest) airplane flights. This new ser-
vice competes with several such services but especially with its large rival Expedia (originally
started by Microsoft) which acquired Travelocity and Orbitz (two major competitors) in 2015.
Google has also recently entered several other new markets, such as the insurance search
market (e.g., for the best auto insurance), and is offering wireless connection to the Internet
competing with large telecommunications providers AT&T and Verizon. It is also planning en-
tries in the smartphone and smartwatch markets. The smartwatch product is being developed
in an alliance with TAG Heuer and Intel. The Google prototype smartphone will operate with a
core product and multiple components. It will be similar to a Lego product where a customer
can change screens such as adding a large screen to watch a major sporting event (e.g., the
Super Bowl). Of course, these smartphone and smartwatch products will compete directly
with Apple products and other companies as well.
Thus, Google competes in many markets and with multiple rivals. In some markets, Google
dominates such as information search. But in other markets, it is a new entrant with a small
market share competing against established and major companies (e.g., airline flight search
and wireless Internet services). In some markets, Google is a primary actor (e.g., search) offer-
ing major new services, and in other markets, it is a responder (e.g., Android Pay). As a result,
Google’s competitive actions are exceedingly complex with competitive dynamics across
multiple markets and competitors.
DOES GOOGLE HAVE COMPETITION?
DYNAMICS OF THE HIGH TECHNOLOGY MARKETSrexphotostwo497914