Live

Watch CBSN Live

Four Things That Scare Google

Late last year, I wrote that Google's (GOOG) omnipotence was waning. The humbler beast that has emerged in 2010 is facing four definite threats; recent news has shown the company building preemptive bulwarks against them. I'm not saying that any of these factors will bring Google down -- there's only one fruit company with more cash and dexterity -- but it has picked its battles. As Stephen Colbert would say: here's the Threat Down.

You. That's right. You. As the Wall Street Journal observed on February 7th, Google's "tightwad" managers are sitting on almost $25 billion in debt-free cash, and (also like Apple (AAPL)) they refuse to pay dividends to shareholders. Perhaps the search giant thinks it can appease investors by hawking "Google-inspired" scarves on the Google Store.

It's also likely to run SuperBowl ads during Sunday night's game, despite CEO Eric Schmidt's comment in 2006 that overt brand management was "the last bastion of unaccountable spending in corporate America." (UPDATE: It did just that; here's the Google Super Bowl ad.) Clearly, the GOOG feels like they need to charm us. Is it to sell more Nexus Ones? Who knows. But some outlets have speculated that Google's direct-sales model for the "Google phone" is an effort to gain more information about how its customers use data and apps, suggesting that they don't trust you and Android to hit it off without a little personal coaxing.

The DOJ. Something tells me that when Googlers set out to create Google Books, they didn't foresee what a massive litigious pain in the ass it would become. At first, Google thought it had reached a peaceable settlement with the various plaintiffs back in 2008. Then on February 4 of this year, the Department of Justice frowned upon the deal reached in a New York District Court, saying the settlement provided Google "anticompetitive advantages." The DOJ acknowledged that the parties had made progress, but the original agreement, which afforded Google 37% of the revenue earned off scans of "orphan" books, will have to be heavily modified. Having invested so much already, Google is going to pay dearly for this initiative, and if it doesn't handle the Books debacle diplomatically, it could open itself up to yet more interference from anti-trust authorities.

Losing China. It's been almost a month since Google vowed it would cease to censor Chinese search results, and nary a thing has changed. As Computerworld notes, ditching Google.cn may vitiate the company's ability to begin selling enterprise software there. Here in the U.S., Google has ramped up its enterprise software push by starting up a direct-sales "app store" where businesses can shop for Google Apps. (Currently, Google relies on resellers to do that dirty work.) It's also just begun selling businesses on two of its shiniest new toys, Google Voice and Google Wave. Losing out on SMB sales in China could mean an entire generation of Eastern companies given over to competitors like Microsoft (MSFT).

Facing Facebook. The big blue social network may be wonky and, at times, nearly unusable, but that is changing -- and Google knows it. On February 5, a Microsoft manager blogged about a reinvigorated relationship between Bing and Facebook that would beef up Web search, hyper-local results, question-answer services and a generally "expanded relationship." TechCrunch reports that Facebook may also be working on a skunkworks "Gmail Killer," a fully-featured Web email client (codenamed "Project Titan") that could woo Google's prized millennial demographic. With 400 million users and counting, Facebook's assault would be no joke, especially considering that in some first-world countries (specifically, Australia) social network traffic and Web search traffic are reaching parity.

One thing that clearly doesn't scare Google? Apple. As Wired editor Dylan Tweney observes, the company's HTML5 and Javascript apps are making Apple's "walled garden," the iTunes App Store, into a non-issue by providing a native-quality experience inside Mobile Safari. The company has also let a concept tablet designs slip out on Chromium.org, enabled multi-touch on the Nexus One (pictured above) despite Apple's patent, and has begun to contribute more to the open-source WebKit project that underpins Apple Safari and its own browser, Chrome, than Apple itself.

Facebook and Justice might be spectral threats, but any tech sector company who doesn't have to fear Apple will probably fare just fine.