Google Inc (GOOG), Microsoft Corporation (MSFT): Search Engine Shorts

Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) are, for all intents and purposes the to two companies in Internet search, Google being dominant in many countries, while Bing has taken over second place thank to not only its own search engine but its alliance to be the engine behind Yahoo! Inc. (NASDAQ:YHOO) Search. Tuesday there were a couple of news items that crossed our desk here at the Insider Monkey newsroom that affected search engines. First, we’ll take you to Europe where some of the search engines are ganging up on one; then we come stateside to Washington, where all the search engines were put on notice by the federal government. IRS audit time?

(ANTI-)TRUST, BUT VERIFY

Dateline Brussels, Belgium, where the European Union Competition Commissioner, Joaquin Almunia, is getting feedback on the “field test” of recommended changes by Google Inc (NASDAQ:GOOG) in regards to making its search results more balanced instead of favoring Google and its affiliated websites at the top of results regardless of relevance to the search query. Almunia has been investigating Google for more than two years on charges of anti-trust violations regarding its search results, which has shown to push down rival or competing products and services in the results.

Google was demanded to come with a list of remedies for this issue, and the recommendations have been put through a field market test to see how the recommendations would function. Results are not good for Google Inc (NASDAQ:GOOG), as FairSearch — an Internet watchdog consortium of 17 companies including Microsoft Corporation (NASDAQ:MSFT) — has spoken out about the preliminary results of the field test. “It would be better to do nothing than to accept Google’s proposals,” said FairSearch’s Thomas Vinje. “The proposals would make things worse rather than better.”

It may still be months before the European Commission makes its final decision on the case.

WARNING SHOT?

Back in Washington, Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Yahoo! Inc. (NASDAQ:YHOO) are all on the same team this time, as they plus nearly 20 other top search engines in the U.S. (including specialized travel and hotel search sites) all received a warning letter from the friendly folks at the Federal Trade Commission, letting them know that deceptive advertising in their search results would not be tolerated. And we mean it this time.

The FTC apparently seems ready to start enforcing some rules regarding advertisements in search results, especially those positioned at the top of the first page of results. Have you felt deceived by these ads in how they look?