For regulators, Google is the new Microsoft

I didn’t appreciate it at the time, but in retrospect I agree with Bill Gates’ testimony to the Senate Judiciary Committee back in 1998 when he said, “People who feared IBM were wrong.” He added, that “Technology is ever-changing” and “No company owns the factory for ideas.” He was defending Microsoft against a barrage of antitrust charges.

Gates was more on-target than I suspect he realized or might have hoped for, given the extent to which Google and Apple(AAPL) have taken both market share and mind share away from the company he founded.

One of the major concerns of regulators near the end of the last century and the beginning of this one was Microsoft’s bundling of the Internet Explorer Web browser. And that concern remains. Just this March, Microsoft was fined $733 million because it failed to implement a mandatory pop-up screen giving European consumers the ability to select their browser of choice. Microsoft, which paid the fine without protest, said it was a technical glitch in an early version of Windows 7.

While I’m sure Europe can use the money, the fine struck me as the proverbial beating of a dead horse. Of course, Microsoft is far from dead. Its desktop operating system and its Office suite of products remain a cash cow and maintain the company’s domination in those markets. But to fret over the installation of a browser on desktop operating systems during an era where everyone is focused on mobile — and when desktop users can easily download Google Chrome, Mozilla Firefox and other browsers — struck me as downright silly.

Which brings us back to Google. During his closing remarks, Google CEO Larry Page said that, “Every story I read about Google is us versus some other company or some stupid thing.” He added that, “Being negative is not how we make progress,” and “the most important things are not zero sum. There is a lot of opportunity out there.”

He was talking about — among other things — the allegation that Microsoft recently configured its Messenger product so that it won’t interact with Google’s. He made no direct references to government probes, but they couldn’t have been far from his mind, considering how many governments on both sides of the Atlantic are looking into various Google practices. Of course, it’s not an entirely lopsided playing field — Google spends a lot of money on policy teams in Washington and other capitals.

Given the importance of mobile and the rate of growth of Android, Google is becoming the new Microsoft. Sure, Apple is a strong competitor but Google keeps gaining market share — mostly with phones but recently with tablets as well. There’s no question that Google practically has a monopoly on Web search. And with the rapid growth of its Chrome browser, it’s starting to dominate there as well.

Google isn’t just spending on its core products, but also on future technology like Google Glass and driverless cars. And now that Google is entering the streaming music service, I’m sure there are a lot of nervous executives at Pandora, Spotify, Rhapsody and other companies whose turf is being invaded by Google, and will likely soon be invaded by Apple and Amazon as well.

It’s no wonder that watchdog groups like Santa Monica-based Consumer Watchdog have their sights set on Google, as do privacy groups like the Electronic Privacy Information Center. And it’s probably a very good thing that Google is being watched carefully, even if some of the attacks against it may be somewhat overblown.

But as we keep our collective eyes on Google, don’t forget what Gates told that Senate committee. So far, the rule of gravity seems to apply to companies as well. Eventually, “what goes up, must come down.”