"Century Anti-Monopoly" case: Microsoft CEO "stabs" because of monopoly, even with AI, we can't catch up with Google search.

Wallstreetcn
2023.10.02 21:56
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Microsoft CEO Nadella testified in court during the Google monopoly case, stating that Google can use the enormous profits generated by search advertising to acquire exclusive rights to content for the next generation of AI-based search, thereby accelerating its lead. The media has referred to Nadella's testimony as crucial evidence supporting the U.S. Department of Justice's allegations against Google.

During the trial of the "actual antitrust case," which poses the most severe threat to Google in the past 25 years, Microsoft's CEO, Satya Nadella, dealt a blow to Google.

On Monday, October 2nd, Nadella testified in court during the trial of the Google antitrust case and solemnly warned that Google may expand its monopoly position in the search market to the new generation of artificial intelligence (AI) tools.

Nadella stated that Google may use the enormous profits obtained through search advertising to invest in purchasing content from publishers for the development of AI-based search, thereby gaining exclusive rights to this content and accelerating its own leading position.

In other words, with the search advertising as its cash cow, Google can confidently make acquisitions, making it even more difficult for competitors like Microsoft, even with AI technology, to catch up with Google.

Nadella also expressed the ubiquitous monopoly position of Google search in people's lives, saying, "You wake up in the morning, refresh, and then search on Google."

Media comments suggest that compared to his statement when Microsoft launched the AI version of the search engine Bing in February this year, Nadella's testimony on Monday can be considered a 180-degree turn. At that time, he said that generative AI was a way for Bing to return to the market and make Google feel uneasy.

Media pointed out that Nadella's new stance is crucial in supporting the claims of the US Department of Justice, which accuses Google. The Department of Justice believes that Google not only currently dominates the market but will also dominate it in the future if not controlled.

Wall Street CN previously mentioned that in the Google search monopoly case that began in early September, the US Department of Justice accused Google of spending over $10 billion a year and signing exclusive agreements with companies like Apple to maintain its position as the default search engine for the internet and mobile devices.

The Department of Justice stated that Google has been "illegally maintaining" its established monopoly position since 2010 and currently holds approximately 89% of the market share in the internet search market.

Google's lawyers argued that Google became the top search engine because users prefer Google over its competitors. Companies choose Google as the default search engine because it is the best choice, not because of a lack of competition.

During the trial on Monday, Google's lawyers attempted to prove that Bing lagged behind Google search because it was not as strong and Microsoft did not invest as much in developing search.

When testifying that day, Nadella stated that Microsoft invested $100 billion in its search engine. After being questioned by Google's lawyers, he revealed that in 2007, Microsoft estimated that it had only half the number of search engineers compared to Google and was three to five years behind Google in creating competitive products.

Nadella also admitted under questioning by Google's lawyers that even if Microsoft reached agreements with Verizon, BlackBerry manufacturer Research In Motion Ltd., and Nokia to make Bing the default search engine, Microsoft still failed to gain a significant share in the mobile search market. He said, "My competitor has a 97% market share."

Nadella also mentioned the long-standing controversy over Google's Search Ads 360, an advertising software. Microsoft previously accused Google of not keeping up with the new features and ad types of Bing in this software. As a result, potential advertising clients found it less convenient and effective to advertise on Bing using this software compared to Google.

Nadella stated that Microsoft hopes advertisers can easily transfer their advertising campaigns from Google to Bing with just one click. "We have always asked them to add some features that we want, but they told us that it doesn't make sense to do so."