Is Google (Nasdaq: GOOG ) a monopolist? TradeComet says it is, and wants its day in court to prove it. Welcome to Microsoft's (Nasdaq: MSFT ) world, Larry and Sergey. Coffee and bagels are next door. Bill will be with you in a moment.
The soon-to-not-be-so-secret sauce?
TradeComet is a New York-based holding company whose subsidiaries include SourceTool, a "global business-to-business (B2B) search engine" for buyers of industrial products, according to a company press release. Executives there accuse Google of killing SourceTool by raising prices for critical traffic-building services a hundredfold.
"With no notice, Google changed from cheerleader to tyrant when it realized we were a competitive threat," CEO Dan Savage said in a statement, positioning his company as if it were on track to be the next Baidu.com (Nasdaq: BIDU ) -- before Google squashed its hopes, that is.
To be fair, these are serious accusations that deserve a fair hearing. And while I doubt that SourceTool was ever a competitive threat to Google, its website is comprehensive -- it's just not a search engine. Rather, it's a directory, much more like Yahoo! (Nasdaq: YHOO ) was in its early days.
Too bad that doesn't matter. Thanks to this suit, investors and regulators are now faced with a very troubling question: Can Google do whatever it wants with its PageRank search algorithm, even if its actions harm businesses that depend on it for traffic?
There's no good answer here if you're an investor. Say yes, and Google gets to be this decade's Microsoft, a search engine that laughs at its so-called competition, crushes upstarts, and, ultimately, suffers a crippling regulatory probe.
Say no, and Google risks becoming a government lapdog, a lame-duck researcher slouching toward obscurity a la Xerox PARC or Bell Labs. Both still employ some of world's brightest minds but they're also no longer the unparalleled source of innovation they once were.
Thanks, TradeComet. Thanks a lot.
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