On antitrust, is Google the next Microsoft?

Not too long ago, nearly every move that Microsoft made seemed to draw complaints that the company was abusing its market dominance.

Now another market-leading technology company is under fire in Washington as well. An unlikely combination of onetime antitrust defendants like Microsoft and AT&T and liberal consumer groups that have been their traditional antagonists are taking aim at Google.
Interviews by CNET News.com last week show that Microsoft and its occasional allies have met separately with key congressional committees that deal with consumer protection and antitrust issues--both of which announced last week that they will hold hearings on Google's plan to spend $3.1 billion to buy DoubleClick.

The Federal Trade Commission, which must review the merger on antitrust grounds, has also been meeting with Google, Microsoft and those nonprofit consumer groups, according to sources familiar with the meetings. The European Union, egged on by American consumer groups like the Electronic Privacy Information Center and the pro-regulation Center for Digital Democracy, is reviewing the merger too.

All this amounts to the first serious political threat to a company that has grown to a market capitalization of $162 billion by worrying more about serving customers than catering to the whims of bureaucrats and politicians. Longtime Washington observers believe that even if the DoubleClick acquisition is eventually permitted, federal scrutiny will only increase.

In addition to its full-time staff lobbyists, also involved in Google's efforts to fend off antitrust bureaucrats are four newly hired lobbyists in the Washington office of the law firm Brownstein Hyatt & Farber (including Makan Delrahim, a former top Justice Department antitrust official). Google's earlier hires include the now-renamed PodestaMattoon, which draws its name from longtime Democratic dealmaker Tony Podesta, and King and Spalding, home to former Republican Sens. Connie Mack and Dan Coats.

A Google representative said there had not, however, been any personal visits to Washington in support of the DoubleClick deal by top executives like CEO Eric Schmidt and co-founders Larry Page and Sergey Brin, who famously showed up in blue jeans and sneakers when he arrived on Capitol Hill for meetings with politicians last summer.

Citing confidentiality concerns, an FTC representative declined to comment on anything beyond the fact that the investigation is continuing. AT&T, which has made public statements in opposition to the merger before, would not comment. Time Warner, which reportedly has voiced concerns about the deal, also would not comment.

Microsoft spokesman Jack Evans declined to offer details about his employer's attempts to sink the DoubleClick deal. "As a general rule, we don't comment on specific lobbying efforts," he said Friday. "Microsoft continues to believe the Google-DoubleClick acquisition raises a number of serious questions about the effects it will have on advertisers, publishers and consumers, and we believe it warrants closer scrutiny."

By any measure, Google is seriously outgunned in Washington. Its spending on lobbyists in 2006 amounted to a mere $720,000--a fraction of what the Google co-founders spent on their personal jet. By comparison, last year AT&T wrote checks for at least $27 million to buy political influence and Microsoft spent $8.9 million.

The disparity is even greater over a longer period. Starting in the late 1990s, when Google was moving into its first office, AT&T and Microsoft spent a combined $179 million while Google spent a mere $540,000. (That's counting lobbying and political contributions through 2005, as calculated in News.com's special report last year.)

It's no surprise that Google has paid little attention to Washington and hired a government
relations director just over two years ago: it's not in a heavily regulated industry like AT&T. Microsoft, of course, began writing fat checks to lobbyists--including Rick Rule, a former top Justice Department antitrust official--only after its antitrust headaches began in 1997.

Google PageRank Explained

What is PageRank?

PageRank was developed at Stanford University by Larry Page (hence the name Page-Rank) and Sergey Brin as part of a research project about a new kind of search engine. The project started in 1995 and led to a functional prototype, named Google, in 1998. Shortly after, Page and Brin founded Google Inc., the company behind the Google search engine. While just one of many factors which determine the ranking of Google search results, PageRank continues to provide the basis for all of Google's web search tools

PageRank is a numeric value that represents how important a page is on the web. Google figures that when one page links to another page, it is effectively casting a vote for the other page. The more votes that are cast for a page, the more important the page must be. Also, the importance of the page that is casting the vote determines how important the vote itself is. Google calculates a page's importance from the votes cast for it. How important each vote is is taken into account when a page's PageRank is calculated. PageRank is Google's way of deciding a page's importance. It matters because it is one of the factors that determines a page's ranking in the search results. It isn't the only factor that Google uses to rank pages, but it is an important one.

First, let me explain in more detail why the values shown in the Google toolbar are not the actual PageRank figures. According to the equation, and to the creators of Google, the billions of pages on the web average out to a PageRank of 1.0 per page. So the total PageRank on the web is equal to the number of pages on the web * 1, which equals a lot of PageRank spread around the web.

The Google toolbar range is from 1 to 10. (They sometimes show 0, but that figure isn't believed to be a PageRank calculation result). What Google does is divide the full range of actual PageRanks on the web into 10 parts - each part is represented by a value as shown in the toolbar. So the toolbar values only show what part of the overall range a page's PageRank is in, and not the actual PageRank itself. The numbers in the toolbar are just labels.

Whether or not the overall range is divided into 10 equal parts is a matter for debate - Google aren't saying. But because it is much harder to move up a toolbar point at the higher end than it is at the lower end, many people (including me) believe that the divisions are based on a logarithmic scale, or something very similar, rather than the equal divisions of a linear scale.
Let's assume that it is a logarithmic, base 10 scale, and that it takes 10 properly linked new pages to move a site's important page up 1 toolbar point. It will take 100 new pages to move it up another point, 1000 new pages to move it up one more, 10,000 to the next, and so on. That's why moving up at the lower end is much easier that at the higher end.

In reality, the base is unlikely to be 10. Some people think it is around the 5 or 6 mark, and maybe even less. Even so, it still gets progressively harder to move up a toolbar point at the higher end of the scale.

Note that as the number of pages on the web increases, so does the total PageRank on the web, and as the total PageRank increases, the positions of the divisions in the overall scale must change. As a result, some pages drop a toolbar point for no 'apparent' reason. If the page's actual PageRank was only just above a division in the scale, the addition of new pages to the web would cause the division to move up slightly and the page would end up just below the division. Google's index is always increasing and they re-evaluate each of the pages on more or less a monthly basis. It's known as the "Google dance". When the dance is over, some pages will have dropped a toolbar point. A number of new pages might be all that is needed to get the point back after the next dance.

The toolbar value is a good indicator of a page's PageRank but it only indicates that a page is in a certain range of the overall scale. One PR5 page could be just above the PR5 division and another PR5 page could be just below the PR6 division - almost a whole division (toolbar point) between them.

Microsoft claims Linux is infringing on 235 patents

Microsoft claims that free software like Linux, which runs a big chunk of corporate America, violates 235 of its patents. It wants royalties from distributors and users. Users like you, maybe.

Free software is great, and corporate America loves it. It's often high-quality stuff that can be downloaded free off the Internet and then copied at will. It's versatile - it can be customized to perform almost any large-scale computing task - and it's blessedly crash-resistant.

A broad community of developers, from individuals to large companies like IBM, is constantly working to improve it and introduce new features. No wonder the business world has embraced it so enthusiastically: More than half the companies in the Fortune 500 are thought to be using the free operating system Linux in their data centers.

"It's a tinderbox. Patent law's going to be the terrain on which a big piece of the war's going to be fought. Waterloo is here some where." --Eben Moglen, Executive director, Software Freedom Law Center

But now there's a shadow hanging over Linux and other free software, and it's being cast by Microsoft (Charts, Fortune 500). The Redmond behemoth asserts that one reason free software is of such high quality is that it violates more than 200 of Microsoft's patents. And as a mature company facing unfavorable market trends and fearsome competitors like Google (Charts, Fortune 500), Microsoft is pulling no punches: It wants royalties. If the company gets its way, free software won't be free anymore.

The conflict pits Microsoft and its dogged CEO, Steve Ballmer, against the "free world" - people who believe software is pure knowledge. The leader of that faction is Richard Matthew Stallman, a computer visionary with the look and the intransigence of an Old Testament prophet.

Supreme Court eases patent standards

Caught in the middle are big corporate Linux users like Wal-Mart, AIG, and Goldman Sachs. Free-worlders say that if Microsoft prevails, the whole quirky ecosystem that produced Linux and other free and open-source software (FOSS) will be undermined.

Microsoft counters that it is a matter of principle. "We live in a world where we honor, and support the honoring of, intellectual property," says Ballmer in an interview. FOSS patrons are going to have to "play by the same rules as the rest of the business," he insists. "What's fair is fair."

It's a breathtaking number. (By comparison, for instance, Verizon's (Charts, Fortune 500) patent suit against Vonage (Charts), which now threatens to bankrupt the latter, was based on just seven patents, of which only three were found to be infringing.) "This is not a case of some accidental, unknowing infringement," Gutierrez asserts. "There is an overwhelming number of patents being infringed."

Furthermore, FOSS has powerful corporate patrons and allies. In 2005, six of them - IBM (Charts, Fortune 500), Sony, Philips, Novell, Red Hat (Charts) and NEC - set up the Open Invention Network to acquire a portfolio of patents that might pose problems for companies like Microsoft, which are known to pose a patent threat to Linux.

So if Microsoft ever sued Linux distributor Red Hat for patent infringement, for instance, OIN might sue Microsoft in retaliation, trying to enjoin distribution of Windows. It's a cold war, and what keeps the peace is the threat of mutually assured destruction: patent Armageddon - an unending series of suits and countersuits that would hobble the industry and its customers.

Search Engine War!

Searching the Web on a mobile phone has been a lot like getting online via dial-up modem circa 1995: slow, tedious and not terribly useful. Typing on tiny buttons, squinting at a list of links and clicking through to a page that won’t display properly is enough to test anyone’s patience.

But that is beginning to change. Google, Microsoft and Yahoo have all trained their sights on cellphones, which they see as the next great battleground in the Internet search wars. They have thrown tens of millions of dollars and armies of programmers at the problem, seeking to develop tools that people on the move can actually use.

In recent months, the three search giants have introduced a new breed of search services that emphasize quick answers to urgent questions: Where is the best local pizzeria? How did the Yankees do against the A’s? What’s the fastest way to get to the airport?

The services are beginning to carry small ads related to searches like those that have turned desktop Internet search into a gold mine.

“The biggest growth areas are clearly going to be in the mobile space,” Eric E. Schmidt, chief executive of Google, said when asked about new opportunities at a conference here this week. In case his point wasn’t clear, Mr. Schmidt drove it home: “Mobile, mobile, mobile.”

The new offerings from the search companies are just the beginning. Search services that pinpoint a phone’s location using the Global Positioning System or that accept voice commands are coming out of the labs. Google has gone so far as to build a prototype phone with its own software inside, according to one person who has seen it.

But between the search giants and phone users stand some powerful gatekeepers — cellphone carriers like Cingular, Sprint and Verizon. On the PC, Web surfers can easily go to the search engine of their choice, but this takes longer on a cellphone. Carriers have the ability to dictate which search engine is easy to access and which is not through placement in their phones’ menus.

“Search will be even more of a choke point on the mobile device than on the PC because navigation is so hard,” said Marco Boerries, the senior vice president in charge of Yahoo’s wireless efforts.

After spending billions of dollars building wireless networks, building relationships with consumers and subsidizing the cost of phones, the last thing carriers want is to miss out on profits from the mobile search business. By and large, they have been eyeing the major search engines with a bit of foreboding.

“In the U.S., the carriers have complete authority over what happens on the phone,” said Sam Jadallah, a venture capitalist who has invested in mobile phone technology start-ups. For the nation’s wireless carriers, Google, Yahoo and Microsoft “are much bigger threats than they are partners,” he added.

The tension between the two sides is reflected in the scarcity of major alliances between carriers and big-name search companies. Among the big American cellphone operators, only Sprint has a wide-ranging partnership with a top search provider, Microsoft. Most other large carriers are working with small technology companies that offer generic search services, which the carriers can stamp with their own brand.

Gspace: Unlimited Online Storage!

One thing that's made Google's free Gmail online messaging service popular is its multiple gigabytes of storage space. There are several tools that let you use the more than 2GB of space as a virtual Internet drive, the most popular being GmailFS. If you'd prefer to use software that's independent of your base operating system, try Gspace instead. It's a Firefox extension that's easy to install and use.