How much did Microsoft pay to compete with Google?
At the trial against Google Satya Nadella, Microsoft's number 1, revealed a 100 billion dollar investment in Bing in an attempt to oust Mountain View from its monopoly
With the advent of artificial intelligence, the geography of the Internet will probably change, changing and changing, without centers or even peripheries, but so far still characterized by a hub crossed by more or less everyone: Google. It is Google that is consulted for searches for a restaurant, for information on traffic, for the latest news or the latest gossip regarding one's favorite star.
DOES AI REOPEN THE GAME BETWEEN GOOGLE AND MICROSOFT?
It has "always" been like this (does anyone still remember Virgil?) but it doesn't mean that it will be like this forever. Because, precisely, thanks to AI we will delegate the task of searching and cross-referencing the data directly to them. An epochal change, which not surprisingly immediately alarmed the Mountain View giant. Does this mean that Microsoft, to compete with Google, has shelled out 11 billion dollars, i.e. the amount invested so far in the OpenAi software house responsible for ChatGpt? Not exactly…
THE LAWSUIT AGAINST GOOGLE
This curiosity can be answered by reading the documents of the trial involving the United States Department of Justice against Google. As is known, in fact, in the US Alphabet is accused of maintaining its monopoly on search engines through unfair practices. According to the Department of Justice, for example, among the disputed practices is the fact that Mountain View paid 10 billion a year to smartphone manufacturers to keep Google as the default search engine. The company just reached a settlement in principle to avoid a lawsuit over monopolistic practices in the Android app store.
According to the Department of Justice, Google has deliberately maintained and abused its monopoly power (it holds 90% of searches in the United States) through anticompetitive and exclusionary distribution agreements that block default search positions on browsers, mobile devices, computers and others devices, among other restrictions.
“Two decades ago, Google became Silicon Valley's poster child as a start-up with an innovative way to search the Internet. That Google is long gone. The Google of today is a monopolistic gatekeeper of the Internet and one of the richest companies on the planet,” begins the original indictment.
MICROSOFT'S MEGA INVESTMENT
Well, from the documents not covered by omission it emerged that, during the deposition of Satya Nadella , the CEO of Microsoft (a company that knows a lot about monopolies, which will mislead some), revealed the amount of the Redmond company's investment in Bing : 100 billion dollars. In short, the Redmond giant had to shell out to try to undermine Sundar Pichai 's monopoly.
THE FAILED NEGOTIATION WITH APPLE
“Do you think Google would continue to pay Apple if there was no competition in search engines? Why would he do that?” Nadella asked rhetorically in the courtroom, also revealing that Microsoft made Apple a better offer than Google's to make Bing the default search engine on iPhones, but the Cupertino company rejected it, using it exclusively, the accusation of the Microsoft CEO, to raise the price with Google.
Unfortunately, Nadella's testimony was not reported in full given that the trial is closed separately, so we must be satisfied with the excerpts that Bloomberg managed to obtain which concern Microsoft's very expensive counter-moves to avoid being pushed out of the market dominated by Google.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/quanto-ha-sborsato-microsoft-per-competere-con-google/ on Sun, 08 Oct 2023 05:07:51 +0000.