Thursday, April 26, 2007

Laying the foundation for attacking Google

Below is a quote from Washington Post business columnist Steven Pearlstein excerpted a column he wrote on Google titled "How Much More Should It Be Allowed to Grab?"

[P]recisely because of its success, it's fair to ask if Google should be barred from furthering its dominance through acquisitions or collaborations. At issue are the recent purchases of YouTube, the leader in online video sharing, and DoubleClick, the leading broker of online advertising; in both instances Google used its gusher of profits to outbid rivals. There are also new joint ventures with Clear Channel, the giant radio broadcaster, and EchoStar, the satellite television operator.

Consider this: There may never have been a Google without the government's antitrust suit that prevented Microsoft from crushing upstart rivals. By the same principle, isn't it time to begin restraining Google to increase the odds another Google will come along?
I think it is safe to say that Steven Pearlstein will never be as productive or successful as any of the top leaders at Google. After all, if Pearlstein had real business acumen, he would not be a mere newspaper columnist hawking his opinions in a sea of opinion.

Nevertheless, Pearlstein feels himself competent enough ask if it is appropriate to regulate a massive company with thousands of employees and tens of thousands of investors—on the grounds that this company is now too successful and represents a coercive threat to others. Never mind that Google cannot outlaw or regulate its competitors; its mere success equals an act of violence that must be squelched.

Yet consider this: smashing the ability of the successful to reap the benefits of their good judgment and hard work creates a powerful disincentive for the successful to produce. Just what kind of innovation does Pearlstein think will come when the super-productive and super-innovative realize that all their best efforts guarantee them is an antitrust suit?

I suspect that Pearlstein doesn't think that deeply about the issue. The simple idea that there is some imaginary innovator out there who is somehow denied the right to outflank Google is probably justification enough. And that's what you get when you enshrine need as a value—and when great producers fail to justify their right to exist for their own sake.


Galileo Blogs said...

Nicely put, Nick. Need justifies every form of use of force.

As for who aided in laying the groundwork for attacking Google, Microsoft itself has played a role. Marx was right in one thing. Capitalists do make the noose by which they hang themselves. Correction: capitalists ignorant of their philosophical right to exist make the noose.

I cited the relevant New York Times article here:

Jack Galt said...

Microsoft's stand toward (and outright use) of antitrust is nothing short of appalling. Even Ayn Rand could not have imagined sanction of the victim turning into outright thuggery.

Jay Cross, Jr. said...

Crediting government witchunts for Google's rise is beyond disgraceful. Nothing the DOJ did to Microsoft paved the way for Google to succeed. The two companies have different goals (until recently) and more importantly MS was powerless to stop Google's entry into the marketplace.

Blane Burns said...

I am in favor of regulating the regulators with extreme prejudice.
Its just the way I am. Government hates any success other than its own and would like to take credit for all good things. It is responsible for none of the good things.