Spreading Freedom: Google, Microsoft And The War For The Web
WASHINGTON -- You can't swing a dead cat video in Washington lately without hitting a lobbyist, consultant, attorney or adviser on retainer to Google or one of its tech rivals. Google, whose top executives have long been a bottomless cup of campaign coffee for Democrats, is finally entering its bipartisan phase, theatrically hiring Republican operatives and broadcasting the news through insider Washington publications, pumping air into a K Street tech bubble.
The shift in political strategy comes as Google faces a serious antitrust threat, punctuated by a high-profile hearing on the company held Wednesday afternoon in the Senate. But Google's investment in the infrastructure of the conservative movement goes much deeper than what's been reported this summer.
The company known for its progressive politics is now giving money to the Heritage Foundation, the American Enterprise Institute, the Competitive Enterprise Institute, the Republican Governors Association, the GOP firm The David All Group, Crossroads Strategies, the Republican Attorneys General Association and the Republican State Leadership Committee, among others. On Thursday, Google and Fox News cosponsored a Republican presidential debate.
In the last nine months, Google has hired 18 lobbying shops -- not 18 lobbyists, but 18 firms, a dozen of them since July, a head-turning torrent of hiring that also includes consultants not required to register as lobbyists.
"I consider myself a public works project right here," Sen. Pat Leahy (D-Vt.), chairman of the committee leading the antitrust investigation, told HuffPost. "My colleagues call it the Leahy Full Employment Act."
The GOP effort hasn't quite sunk in: Republicans in the House and Senate reacted with pleasant surprise when told by HuffPost that Google had started donating to movement conservatives. "Are you saying they're finally becoming bipartisan? That's a good thing. Bipartisanship is a positive thing," said Sen. John Cornyn of Texas, the head of the Senate GOP's fundraising arm and one of three Republicans on the subcommittee holding the antitrust hearing. "I understand why people feel like they need to have people they can talk to on both sides."
Google certainly feels that need. In public and in private, Google officials complain that longtime rival Microsoft, with its more entrenched Washington operation, is more or less out to get them. Microsoft responds that it makes no secret of its lobbying or its efforts to rein Google in: Its complaint to the European Union, for instance, was made publicly, and it fully acknowledges its lead participation in a coalition, FairSearch.org, organized to lobby on behalf of antitrust action against Google. "Clearly Microsoft were the first people to start to blow the clarion call" on anti-trust issues, said one top Microsoft mercenary. "They had the resources to get people engaged in thinking about it, but I don't think they've had any trouble getting people to agree." Indeed, Google's public critics have been multiplying almost as quickly as their lobbying roster.
Google and Microsoft now dominate influence-peddling around Internet issues, each having spent $3.5 million on lobbying through the first half of 2011. Google's total lobbyist count is now up to 93, the highest number the company has ever had in Washington (roughly one for every six members of Congress). The biggest thrust of Google’s lobbying push involves antitrust, patents, copyright, trade and China.
Microsoft’s lobbying peaked in the mid-2000s, when Congress and antitrust investigators had their sights set on the software powerhouse. Currently, the company’s work in Washington is largely focused on setting and gaming the tax code, a pet issue for corporations seasoned in the ways of the capitol.
Still, Microsoft’s lobbyists also continue to work heavily on antitrust, patent, copyright, trade, and China issues. Sixty-four percent of the 76 lobbyists employed by Microsoft are registered on these issues. Eighty-one percent of those lobbyists have previous government experience, according to a HuffPost analysis of lobbying disclosure reports and data collected by the Center for Responsive Politics.
Microsoft continues to dominate Google when it comes to campaign and political action committee spending, outspending Google nearly tenfold in the first half of 2011. Microsoft reported contributing $580,000 to congressmen, candidates, political parties and leadership PACs, while Google reported $61,000 in donations over the same period.
Google Executive Chairman Eric Schmidt, speaking to reporters after his sworn testimony Wednesday, said that Microsoft had been lobbying hard to pressure Congress to bring the antitrust hammer down on Google -- the blunt pain of which Microsoft knows all too well.
Schmidt's rivalry with Microsoft has deep roots, dating back to his days as an executive with Sun Microsystems in the 1980s, when Microsoft -- in the eyes of Silicon Valley start-ups and, ultimately, the U.S. Department of Justice -- threatened to lock down the digital free market in America. The top tech executives have been at each ever since. "Everything's personal for all those guys," said a consultant for Microsoft who knows both sides well. "They don't have to fight over money, they're all fucking rich. They have to fight over ego and dominance and control."
Schmidt's fixation on Microsoft came through in the opening of his testimony. "I want to start first by taking a step back," Schmidt began. "Twenty years ago, a large technology firm was setting the world on fire. Its software was on nearly every computer and its name was synonymous with innovation. But that company lost site of what mattered and Washington stepped in. I was an executive at Sun and later Novell at the time, and in the years since, many of us have absorbed the lessons of that era. So I'm here today carrying a long history."
Schmidt said that he had "a message from our company: We get it. By that, I mean, we get the lessons of our corporate predecessors."
The conflict between Google and Microsoft has also triggered an international war over the nature of intellectual property, as to how -- and whether -- knowledge should be owned.
Google is benefiting from the freedom-loving street cred it won by theatrically bailing from China -- or at least publicly proclaiming its independence -- to shield its drive to succeed where Microsoft failed a decade ago. Meanwhile, Microsoft is using its remaining influence to fight Google, allied with the American entertainment industry and a loose coalition of tech companies, from Facebook to Travelocity to Yelp.
Overseas, Microsoft has also joined forces with the Chinese search giant Baidu, as China's government seeks to fight Google's influence there, as well. For Baidu, it's a second go-around with an American giant. In 2005, Google invested $5 million in Baidu before it went public, later cashing out for $60 million.
Microsoft's stated concerns about freedom in the U.S. intellectual-property market are complicated by the company's actions in China. Baidu's data is stored on state-owned servers and Baidu, according to its annual financial disclosure, retains information on its users' activity and provides it to government minders. Even before its partnership with Baidu, Microsoft's search engine Bing filtered out results for users in China that the state found threatening, including political dissent.