Google fires double barrell at Microsoft IE7 search

by Stan Beer

Tuesday, 02 May 2006

Google has fired off a double barrelled antitrust-like complaint to both the US Justice Deoartment and the European Commission (EC) over Microsoft making MSN Search the default search engine in the new version of its dominant Internet Explorer browser, IE7. Internet Explorer currently has 85% market share, a share that is slowly being eroded by Mozilla Firefox and, to a lesser extent Opera from Opera Software.

At present, Google is the default search engine in both Firefox and Opera web browsers but Google has to pay for the privilege. Google is arguing that Microsoft is engaging in anti-competitive practice by bundling its own search engine with its browser. Microsoft has retorted that the default search engine is easy to change. However, the software giant knows that a large percentage of users will not bother and will simply stay with the default, thus giving it an instant market share boost in the search engine space.

Google, which makes most of its money from search engine advertsing sales, is taking the prospect of an MSN search box in the top right corner of IE7 so seriously that it has not only fired a salvo at Microsoft through the US and EU regulators. It has also thrown its considerable weight behind the fast growing alternative to Internet Explorer, Mozilla Firefox, which has about 11% market share.

For the first time ever, Google has even allowed Mozilla to promote Firefox on its normally empty home search page and it has started a program offering websites $1 for each Internet Explorer user they can get to download Firefox.

Google currently has almost half of the search engine advertising market share but it depends heavily on that income. Microsoft meanwhile has been looking for ways to diversify away from its traditional slow growing desktop Windows and Office businesses into faster online growth markets such as search engine marketing. The release of the final version of IE7 in a couple of months could be the beginning of that move and this could be the biggest challenge that Google has faced to date.

That said, Microsoft still has a tough battle to face from already hostile regulators in the form of the Justice Department and the EC, both of which have already butted heads with Microsoft in the past over its competition practices. {moscomment}

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