Google needs to choose search or content

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We've seen many signs lately that Google is confused about its role as a company. It has an identity crisis. It must decide if it wants to be a search engine or a content company--and you have to wonder if regulators, especially in the EU, will continue to allow it to be both.

Of course, Google (NASDAQ: GOOG) began life as a search engine, something it did extraordinarily well, so well in fact, that to this day it controls a vast majority of the search engine market, and that's part of the problem. comScore reports that in July, Google controlled 66.8 percent of the U.S. search market, unchanged since June. Microsoft (NASDAQ: MSFT) was a distant second with just 15.7 percent.

According to the site NetMarketShare.com, Google controls almost 85 percent of the search market worldwide. The closest competitors are Yahoo with 6.94 percent, followed by Bing with just 4.44 percent. If you can believe these numbers, that my friends spells total dominance.

Graph courtesy of NetMarketShare.com

As Danny Sullivan pointed out in a recent Marketing Land post, today Google is so much more now than a site that points to other's content. Now it produces hardware like the Nexus 7 tablet and Android phones from Motorola Mobility (NYSE: MMI). It has Google Play to sell apps, books, movies and music. It recently bought other content destinations, like Frommers.com.

I've always defended Google's popularity as a search engine because people choose to use it freely. Google isn't forcing anyone to use its search engine, but now with a such robust content strategy, there is clearly a conflict of interest here should Google point to its own content ahead of that of its competitors.

Google, instead of being a pure search engine, now has other priorities. And just as it leaves open to question if it can stay neutral as both the creator of Android, and a hardware manufacturer that creates products with Android, it becomes much more difficult for Google to maintain any credibility that its search engine results are pure. Now, with increasing amounts of its own content, Google is leaving itself wide open to accusations of favoring its own content over that of others.

And with such a dominant position in the search engine market, Google could be more likely to attract the attention of regulators in the EU and the U.S., and of companies who believe, rightly or not, that Google is favoring its own results over theirs. In fact, it's happening already.

In April, Bloomberg reported that TripAdvisor had filed a complaint with EU regulators that Google was favoring its own results over those of its competitors. Now that Google owns Frommers.com, it only gives more credence to such complaints from travel sites, and as Google buys or develops a larger variety of content, the more susceptible it becomes to such allegations.

One way to solve this dilemma would be to break up the company into two separate entities. One would be the search engine, and one would be everything else. By spinning off the search engine into a separate entity, Google could shield itself from accusations of favoring its own content over others in the search results.

I don't necessarily see Google heeding my advice, but rest assured, over time the problems of being a dominant search engine and a content company are only going to become pronounced, and if Google doesn't do something to resolve the situation, it may find that government regulators will eventually force its hand. - Ron

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