Google, the Snake Oil Monopoly of the 21st Century: A Year in Review

By Sean Stillmaker in Miscellaneous on Jan 1, 2011 5:00PM

After two hours of playing the Parker Brothers board game someone will have a monopoly and the game ends. The same can be said in reality, and 2010 was Google’s best year. The search engine giant made record profits, acquired more companies and made their future plans known more this year than any previous. The behemoth went unchallenged against Congress while Chicago and China were the only two to fight back.

In 1870 John D. Rockefeller incorporated Standard Oil in Ohio. By 1879 Standard Oil controlled 90 percent of the oil refineries in the U.S. Later that year the Grand Jury of Pennsylvania handed down an eight-count indictment against Rockefeller with conspiracy of securing a monopoly. Rockefeller avoided the ruling by securing a promise with the Governor of New York not to approve any extradition, according to The Tyranny of Oil by Antonia Juhasz.

So in 1882 he dissolved the company and created the Standard Oil Trust of Ohio, which was used as a ploy to establish the appearance of business competition. The trust had the general supervision of 14 wholly owned companies and 26 partly owned companies.

The nation’s farmers were the ones most affected by the monopoly. Standard Oil controlled the producers of wheat, corn, sugar, and other crops. Alliances were soon formed, and the powder keg exploded with Chicago being the foreground. On May 4, 1886 the Haymarket Massacre occurred with striking labor factions opposing big business.

In 1890 the Sherman Antitrust Act was created. The law prohibited monopolies and any attempt at one. In 1911 the Supreme Court ruled that Standard Oil had illegally monopolized the petroleum industry and broke the company up. The three men who wrote the legislation were Republicans John Sherman, George Edmunds and George Hoar. The act passed 51-1 in the Senate and unanimously in the House. Standard Oil then broke up into independent companies with different boards of directors.

If you’re still following me, let’s flash forward to the 21st Century, where oil is in limited supply and the information superhighway is the hottest capitalist commodity.

Google made a record profit of $7.29 billion in the third quarter of 2010 acquiring a total of 25 independent companies, more than any year previous (although the source is Wikipedia, Gizmodo backs it up). The U.S. has hesitated on a probe, but the European Commission has stepped up its effort on an antitrust investigation into the web service.

This year Google made its largest offer for an independent company, $6 billion for Chicago based Groupon, the company declined the offer. The price would’ve have been Google’s highest for an independent company. The most Google ever purchased was $3.1 billion in 2007 for DoubleClick. Before that it was $1.6 billion for YouTube.

Google to this date has 85 companies under its name. The most recent acquisition was Widevine Technologies, a digital rights software used to secure video content based in Seattle on Dec. 4. This acquisition fits in nicely with their recent proposal to acquire Miramax’s film catalog to stream on YouTube for a price.

Fed up with Google blocks China eventually stonewalled the company over the summer when it didn’t get its traffic from pornographic websites. Google lost 20 percent of their hits, according to documents released by Wikileaks under Federal scrutiny.

Google continues gobbling up independent companies to further expand it's grip on the market. They bought up Android in 2005 for their phone market, they're expanding into the TV market and prepping for a computer controlled car.

Google was then a proponent of the Net Neutrality Act that passed the Federal Communications Commission Dec. 21 in a 3-2 decision. The act paves the way for Internet service providers to charge for premium and faster access while disabling competitor applications on cell phones.

It's OK, y'all pick up your heads when Google starts charging for Internet access because it's not like oil companies never increased gas prices. Happy New Year.