“Google is in a position to determine who will succeed and who will fail on the Internet”

Schmidt says Google has not “cooked” search results

Diane Bartz and Malathi Nayak

Reuters US Online Report Technology News

Sep 21, 2011 16:33 EDT

WASHINGTON (Reuters) – Google Inc has not “cooked” its search results to favor its own products and listings, Executive Chairman Eric Schmidt told a Senate hearing examining if the search giant abuses its power.

Members of the Senate Judiciary Committee’s antitrust panel said on Wednesday that Google has evolved to become a dominant and potentially anti-competitive force on the Internet.

“Google is in a position to determine who will succeed and who will fail on the Internet,” said Republican Senator Mike Lee. “In the words of the head of the Google’s search ranking team, Google is the biggest kingmaker on Earth.”

Google has been broadly accused of using its clout in the search market to stomp rivals as it moves into related businesses, like travel search.

The Federal Trade Commission is looking into that charge and others, including whether Google manipulates its search result rankings to favor its own products.

Lee aggressively quizzed Schmidt over whether Google deviates from its search algorithm to boost its own listings.

He brought a chart that showed a study comparing the success rate for shopping-related key word searches. Lee said that search rankings for price comparison sites — Nextag, PriceGrabber and Shopper — varied while Google’s shopping site was consistently ranked third.

“I see you magically coming up third every time,” Lee said. “I don’t know whether you call this a separate algorithm or whether you’ve reverse engineered one algorithm, but either way you’ve cooked it, so that you’re always third.”

Schmidt replied: “Senator, may I simply say that I can assure you we’ve not cooked anything.”

Schmidt calmly walked the senators though his argument that Google operates in a competitive environment. He is confident the FTC will clear the search giant of any wrongdoing.

“While no company would request such a government investigation, we are confident that our business practices will stand up to scrutiny,” Schmidt said.

Google controls more than two-thirds of the global search market. But Schmidt argued that specialty web sites — like those with restaurant reviews and travel search — give Google stiff competition.

Facebook is another competitor, Schmidt contends. “Consumers, particularly young ones, increasingly are turning to their online friends to find out what to wear, where to eat, and what to watch,” he said.

Colin Gillis, an analyst at BGC Partners, said some of the senators were “gunning hard” for Google but Schmidt handled himself professionally. “He appeared well-coached to me,” Gillis said.

The senators were at times frustrated by what Democratic Senator Al Franken characterized as “fuzzy” answers from Schmidt about how Google prioritizes its search results and whether it unfairly uses rivals’ content.

Franken questioned Schmidt about complaints from Yelp — which provides user-generated reviews of restaurants, shops and other local businesses — that Google unfairly rips reviews from Yelp to build Google’s competing site, Google Places.

Franken asked if Google is still using Yelp’s content to drive business to Google Places.

“As far as I know, not.” Schmidt answered.

Franken skeptically asked, “As far as you know?”

“Again I’ll have to look, but I’m not aware of any,” Schmidt said.

Schmidt was Google’s chief executive officer from 2001, but vacated the post to company co-founder Larry Page in April.

Schmidt now serves as executive chairman and oversees government affairs — a position of critical importance during the FTC probe and lawmakers’ reviews.

(Reporting by Diane Bartz and Malathi Nayak in Washington; Additional reporting by Alexei Oreskovic in San Francisco; Editing by Tim Dobbyn)

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