A Connecticut startup waging a David vs. Goliath battle against search giant Google will have its day in the U.S. Senate on Wednesday as the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights takes a look at Google’s business practices.

The startup, Norwalk-based Kayak.com, is one of the founding members of FairSearch.org – a group that includes a number of travel related search engines who claim that Google’s market dominating search engine presence is shutting out competitors. The group also lists Microsoft as one of its sponsoring members – a company that itself faced similar anti-trust accusations in the 1990s for its dominance of the operating system and web browsing markets.

Kayak quickly compares airline, hotel, and rental car rates through its website and mobile apps. Kayak’s business model is different from other travel booking sites in that it is a search engine rather than a reservation system. Kayak instead directs visitors to airlines or travel bookers where it receives a referral commission for the sale. Additionally, Kayak displays impression-based advertising that visitors see when running searches. More than 70 million searches are conducted on the site and its mobile applications monthly.

Kayak co-founded FairSearch when Google sought to acquire ITA Software, a firm that operates an airline database that powers the backends of a majority of airline and travel sites. Kayak and FairSearch protested on anti-competitive grounds, given Google’s use of the acquisition would be to compete against the other travel search providers.

Google launched its Flight Search product last week.

“Google chose to enter the flight search market with a similar business model to ours. Which is fine, as entrepreneurs we welcome and thrive on competition,” said Kayak Chief Marketing Officer Robert Birge, “The concern was that Google would simultaneously enter the market and be in a position to undermine their competitors by controlling this underlying asset.”

The Justice Department was equally concerned, allowing Google to proceed with the $700 million acquisition provided it signed a five-year agreement to allow the government to monitor the company’s business practices related to the ITA databases. That agreement also restricted Google from seeing how their competitors are using the database. Birge says U.S. antitrust law could protect Kayak and other travel search competitors after the agreement’s expiration.

Despite the group’s victory on the ITA acquisition, Birge says that other concerns remain, specifically Google’s integration of its own products into “above the fold” search results. As an example, Birge pointed to a Google search for “hotels near New York.” After the search is executed, Google returns with a number of paid advertisements as well as its own price comparison results for hotels in the area. Users need to scroll down to see regular “organic” search results.

“If I click on anything on this page, this is a Google product,” Birge said, “Ninety-percent of the clicks off this search are going to happen with what you see above the fold without scrolling down. All of this is Google.”

For its part Google says that nothing restricts users from going to Microsoft’s Bing, Yahoo, or other search providers. The company points to their Dataliberation.org site that gives instructions and tools for extracting data stored on Google’s servers should a user wish to switch to a competing service.

“We built Google for users, not websites, and our goal is to give consumers the most useful answer to their queries. Sometimes the best answer is a link to a website, but other times it might be a video, map, shopping result, or flight times. Naturally some websites will always be unhappy with where they rank or how we present results, but the great thing about the openness of the Internet is that consumers can always switch to another site with just one click.” Google spokesman Adam Kovacevich said.

Birge says that argument, given Google’s extensive market share, is “hogwash.”

“There’s such an incredible scale advantage to search that the ability of anyone to compete with them is really minimal. The truth is, the only way anyone has to compete with them is instead in specific verticals,” he said.

“Verticals” in the search market refer to searches in specific areas like prices for flights or DVD players. Google’s entry into these vertical markets has Birge most concerned, but that entry may have more to do with Microsoft’s own search engine, Bing, gaining search market share.

According to web measurement firm Comscore, Google accounted for 64.8 percent of all web searches (about 11.1 billion) conducted in August, 2011 – a two-year low. Microsoft has made significant inroads in growing Bing’s marketshare, controlling 30.5 percent of searches according to Comscore’s measurements – nearly double Microsoft’s share of the market when Bing launched in 2009. Most of that initial share increase came as the result of integrating Bing into Yahoo’s search and pushing smaller rivals lower, but recent gains have come at Google’s expense.

Microsoft is paying dearly for every incremental piece of the market they claim, losing over $2 billion as it attempts to market their search engine. The costs include signing expensive deals with PC manufacturers like Hewlett-Packard to place Bing as the default search engine on new computers. But gaining market share has tremendous value, with even a percentage point or two having the potential to shift billions of annual revenue from one competitor to another. Google posted $2 billion in profits primarily from ads run on its properties in just the last quarter alone. Those ad dollars come from eyeballs, and the longer Google can keep users in its properties the more ads it can display.

Google has responded to Microsoft’s creeping market share aggressively, overhauling its search algorithms and integrating more vertical searches and other changes to the look and feel of the search experience.

The search algorithm changes Google made in late February 2011 underscored how much control Google has in driving traffic to websites big and small. The change impacted nearly 12 percent of all Google results, with the Online Publishers Association estimating that more than a billion dollars in advertising revenue shifted in the wake. Smaller sites complained of significant drops in traffic and revenue, with top search results going to larger competitors.

Closer to home, CTWatchdog.com, run by consumer journalist George Gombossy, lost tens of thousands of visitors in the first month of the algorithm change. Gombossy says the issue was short lived and traffic quickly rebounded. Google said that while major algorithm changes happen rarely, their proprietary search technology is fine-tuned regularly.

“We make more than 500 changes per year to our search algorithms, and those changes are driven by consumer feedback. Our results are a type of ‘scientific opinion’ of what we hope is the most useful answer, and other search engines’ results reflect their own opinions about what’s best,” Kovacevich said.

In an industry that has largely operated outside the scope of government regulation and taxation, drawing regulatory attention does have its risks. Birge says that FairSearch and his company are not necessarily looking to bring anti-trust proceedings against a competitor.

“Our primary goal is to make sure that folks in positions of influence and power are well educated on these topics, because they are very complicated and that they hear directly from the companies that are affected by it on a day-to-day basis,” Birge said.

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FairSearch’s advocacy has attracted more than just the attention of the U.S. Senate, however. The Federal Trade Commission is conducting a separate investigation of Google, including whether its search and advertising practices are anti-competitive.

Google is taking the accusations seriously, creating a website that addresses issues raised by FairSearch.

The stakes couldn’t be higher for Google Chairman Eric Schmidt, the only person from Google from whom Connecticut Senator Richard Blumenthal and his colleagues wanted to hear. He likely wasn’t the company’s first choice. Schmidt, who up until recently was Google’s CEO, has been called the “Joe Biden of tech” by uttering some cringe-worthy soundbites over the years. The company wanted to send a lower-level executive but changed course when threatened with a subpoena.

The hearing begins at 2 p.m. Wednesday, September 21.  It will be streamed live from the Committee’s website.

Lon Seidman is the host and producer of “Lon.TV,” a consumer technology video show that is on a number of platforms including YouTube and Amazon. He creates in-depth, consumer-friendly product reviews and commentary. His YouTube channel has over 300,000 subscribers and more than 100 million views.

In addition to being a full-time content creator, Lon is an adjunct faculty member at the University of Hartford (his alma mater) where he teaches a course in entrepreneurial content creation.

Prior to becoming a full-time creator, Lon was a partner at The Safety Zone, his family’s business that manufactures gloves and safety equipment. The company has locations around the globe and employs over 200 people worldwide. The Safety Zone was acquired by the Genuine Parts Corporation in 2016.

Lon is also active in public service, serving as the Chairman of the Essex Board of Education, a member of the Region 4 Board of Education, and as the Secretary / Treasurer of the Connecticut Association of Boards of Education. He was endorsed by both Democrats and Republicans for his re-election in 2021.

The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.