The Three-Way Race, in Politics and Search

On the eve of the Super Tuesday primaries I’ve noticed a small but curious synchronicity, a sideways rhyming, between the Microsoft – Google – Yahoo elephant dance, and the back-and-forth among the top remaining candidates on the Republican and Democratic sides in the presidential primaries.

In graduate school I once wrote an 85-page study of “The Strategic Triangle: U.S., Soviet, and PRC Realignment during the 1970s.” Ah, the good old days of Henry Kissinger and grand-game geopolitics. But let’s stick to the more prosaic cage match dominating our politics right now.  Last week, John Edwards finally dropped out (or “suspended” his campaign, preserving some shred of pre-convention viability I suppose), and in doing so he refused to endorse either Barack Obama or Hillary Clinton. Both campaigns said great things about Edwards *after* he left the race, of course, the better to woo his supporters.  But before he dropped out, while he was still showing up in debates, both Clinton and Obama (and their surrogates) showed quite a bit of peevish annoyance that the third-place fellow wasn’t giving up and tossing them his endorsement.

Similarly, Mike Huckabee is hanging on by a thread on the Republican side, to the great solace of John McCain and the fuming of Mitt Romney, the latter believing that Huckabee’s conservative supporters would line up with him in a binary choice between Romney and McCain. (Would that count as a Baptist-to-Mormon conversion?) Romney spent the weekend bashing Huckabee even more than his putative rival, McCain.  Triangulation and frustration boil over into a combustible mix, obviously.

The same combination appears to be brewing in the Googleplex, while investors and analysts dump on the once shiny GOOG, which tanked yet again today, dropping below $500. 

Now, Google isn’t the only high-flyer that’s hurting; Apple is off 34% since December.  But one can’t help noticing when AP reported the fact today that Goldman Sachs has actually removed Google from the “Goldman Sachs Technology Framework Favorite Growth list,” noting not only the Microsoft move but Google’s own performance shortcomings evident even earlier.

So maybe we can understand when tempers get short.  Like Mitt Romney, flailing away at the smiling Mike Huckabee, or John Edwards siding with Obama against Hillary, now Google is going on the attack. This weekend, David Drummond, Google’s senior vice president and chief legal officer, attacked the Microsoft-Yahoo move on the official Google blog (which, unlike my own, bears no disclaimer about not representing company views).  Drummond waved both arms and hopped on his chair, hoping to get the SEC to glower at Microsoft.  Same with CEO Eric Schmidt’s personal phone call to Yahoo’s Jerry Yang after the Microsoft offer was announced, in what some have seen as trying a bit too hard.To some on the sidelines, for example the New York Times, “Google emerged over the weekend with plans to play the role of spoiler, [but] Google’s broadly worded concerns lacked detailed claims about any anticompetitive effects of the deal.” Reuters pointed out industry data showing Google’s share of the global search market at a whopping 75 percent, Yahoo at 16 percent and Microsoft at around only 3 percent of Web searches (other studies differ in the numbers, but not in according Google a lion’s share).  Hardly fodder for SEC apoplexy.

The bottom line doesn’t have to be calculated today – and good thing for Google.  According to Market Dispatches, “it looked today that Wall Street didn’t expect Google to succeed. The stock was down 4% to $495.43, its first close under $500 since Aug. 20. Google is down more than 28% so far this year and down 33% from their all-time high in November.”

I will note this: Drummond’s name is familiar in the context of SEC investigations. Maybe he has the zeal of the reformed, given his own background (“Google’s Chief Legal Officer Slapped With SEC Fines“); he had to pay $700,000 to settle a Securities and Exchange Commission complaint alleging he helped mislead investors while overseeing the finances of his previous employer, SmartForce.  Interesting choice for a “do-no-evil” spokesman.