That's my advice to Google (GOOGL) in this market-abuse case in Europe. Let's hope it's not too late for them to do so.
And what exactly does Google need to do to get out from under this anti-monopoly case? How about taking a page from the Cisco (CSCO) playbook, mainly what Cisco did a couple of months ago? CEO John Chambers spent time with many heads of state to ask what they needed from Cisco to help digitize their countries.
He then invested $100 million in French start-ups and decided to work with the French government to educate 200,000 people so they can do network infrastructure jobs and participate in the digitization.
You think Cisco's going to be investigated for market dominance? Nope. That company's going to be celebrated for supporting France in creating jobs, not destroying them.
My hope, given that the charitable trust has a position in Google, is that the top people go to Europe, meet with the EU's competition commission and come up with creative ways to create jobs, hire people and develop not rivals but so-called frenemies to which it could send traffic or lend ad support through some sort of foundation that gets this thing back on track.
Right now, I feel Google doesn't realize the threat to its core business, as almost half of its revenues come from overseas, a large part of them from Europe. We know Google almost settled last year for something that wouldn't have been onerous but, according to The Financial Times, the deal was blocked by the French and German governments as well as lobbying by media and telecom interests.
I don't know that you can appease the latter constituencies without damaging of the quality of the product. But it's a no-brainer to support companies financially that can ultimately blossom into good customers. It's a simple fact that the EU isn't biased against American companies; consider that Cisco competes directly with Nokia (NOK) and Alcatel Lucent (ALU), which employ thousands in Europe, and Cisco isn't hobbled on the continent. But the so-called anti-competitive "crimes," like the possible favoring of its own apps like YouTube in Android's operating system or steering search to Google entities, can be ameliorated by helping to support start-ups, a la Cisco, that can flourish with Google's help. It's a small price to pay vs. the potential for a $6 billion fine, the number bandied about, but more important, for a change in business practices that really hurt how Google makes money.
There was another company once that showed a genuine disregard for a government entity -- Microsoft (MSFT) back at the turn of the century. Initially it seemed that the anti-competitive case against Microsoft wouldn't be a serious stumbling block to business. But then the company's execs made statements that showed the company didn't respect or understand the way the Justice Department works. That left the judge astounded and Microsoft was caught up in years of legal wrangling.
The judge who ruled against Microsoft was quoted as saying he was appalled at the execs' cavalier behavior. "I think Microsoft didn't take this seriously enough," Judge Thomas Penfield Jackson was quoted as saying after he ruled that Microsoft had to be split in two. Ultimately, that ruling was overturned, but I think the entire case caused Microsoft to take its eye off the ball. In fact, I think one of the reasons Microsoft didn't see mobile and social and cloud coming and has been playing catch-up ever since was that it failed to recover from years of being on the defensive.
It simply didn't play ball.
It's time for Google to play ball with Europe or else I fear a replay of what happened to Microsoft. Cisco has shown the way. Google must follow. Or else.
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