Echoes of Microsoft, IBM in Google tussle

Back in the 1960s and 1970s, IBM was the tech industry's juggernaut, lording it over the competition, seemingly without breaking much of a sweat. The same was said of Microsoft, which enjoyed similar predominance in the software business for most of the 1980s and 1990s.

Then both companies attracted the attention of the trustbusters and their worlds changed dramatically.

Finding themselves the targets of government antitrust regulators, executives at IBM and Microsoft were forced to spend precious time with lawyers instead of thinking about customers and the competition.

IBM found itself mired in a 13-year antitrust battle with the Justice Department. Starting in 1969, IBM was forced to put 200 attorneys on the job at one point to handle a case that involved 974 witnesses and 104,400 pages of transcripts. The investigation was abandoned by the early 1980s but by then, the rise of the PC clonemakers signaled the tech industry shift away from mainframes to a new market where IBM was just one of many competitors - and not a very good one, at that.

The DOJ and 19 states (along with the District of Columbia) sued Microsoft for allegedly abusing its market heft to stifle competition. Even though that charge was ultimately upheld by an appeals court in 2001, the company got off relatively lightly - some would describe it as a proverbial slap on the wrist - agreeing to a deal that set up a technical committee to make sure Microsoft complied with the terms of a consent decree it signed with the government. But all the while that Microsoft was focusing - understandably so - on staving off the government, upstarts like Google and Salesforce.com were quietly building new Internet businesses that would later rock Microsoft's business.

Paging through their histories, it's now clear that IBM and Microsoft - despite appearing to have weathered their respective battles - never recovered that killer mojo. Now the same questions are bound to get asked about Google, which finds itself the target of a formal antitrust review of its business practices.

For its part, Google says it's played by the rules and was "still unclear exactly" what the government wants - a refrain that sounds eerily reminiscent of similar statements by Big Blue and Microsoft when they first knocked heads with Uncle Sam.

The government investigation is likely going to focus on whether Google abused its dominance of Internet search to spread into other online markets. Rival Internet companies assert that Google manipulates its results to steer users to its own sites and services and bury links to competitors. For its part, Google says the accusations of anti competitive behavior as whining by competitors, not users, who like its services. That has a familiar ring. If Google's management was in the mood, they could use their own search engine to call up nearly word-for-word defenses offered by Microsoft when it first knocked heads with regulators.

CBSNews.com and its sister sites will be covering this developing story in the days and weeks - and maybe months ahead.

Google: Trustbuster concerns 'unclear'
Larry Dignan: Reading between Google's lines
FTC, Senate ratchet up Google antitrust probes
Google subpoena: An attack on capitalism
Google antitrust: Easy to charge, hard to prove

  • Charles Cooper On Twitter»

    Charles Cooper is an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.

Comments