Google’s Charm Offensive

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Google's Eric Schmidt

Google may have finally mastered the ways of Washington.

Chairman Eric Schmidt is due to testify today at a hearing before the U.S. Senate on whether the Mountain View., Calif.-based company is abusing its market dominance in search. Google, of course, denies wrongdoing, At the same time, however, it wants to avoid the same antitrust issues that hobbled Microsoft for years.

“Hoping to fend off any antitrust action, Google has hired at least 13 lobbying and communications firms since May, when the Federal Trade Commission ramped up its probe of the Internet giant,” Wall Street Journal says.

Schmidt and the Google co-founders Larry Page and Sergey Brin have been criticized for being naïve in the ways of Washington. In 2008,  Brin, one of the world’s richest men, showed up to lobby members of Congress wearing blue jeans, silver mesh sneakers and a black T-shirt and jacket. That didn’t go over well among politicians who usually prefer pin-stripped suits and wing tips.   The headline for the Washington Post story about his misadventure was brutal: “Google Is A Tourist In D.C., Brin Finds.”

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Fast forward a few years and plenty has changed. For one thing, Google has discovered Republicans.  It has given $18,500 to GOP House members in the 2012 election cycle, according to Open Secrets.Org.  That’s $6,500 more than what Google donated to the minority Democrats. In the Senate, where the Democrats, are the majority, the situation is reversed — Google donated $22,000 to the Democrats and $8,500 to the Republicans.

Schmidt’s political leanings are hardly a secret. He campaigned for Obama in 2008 and there have been reports that the executive is in line for a cabinet position. Over the weekend, Schmidt gave an impassioned defense of Obama’s economic policies on ABC’s “This Week with Christiane Amanpour” where he urged passage of the President’s jobs bill. He called for more economic stimulus and even argued that the focus on Congress on cutting government spending is “ludicrous.”

Shareholders hope that Google’s new political savvy pays off. Shares of the Internet search leader is down almost 8% this year amid concerns over whether the broader economic slowdown will affect its business. So far, it really hasn’t.  Google’s second-quarter results – as usual – beat Wall Street expectations.  Its Google+ social network also is gaining traction against Facebook.

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Schmidt, who was pushed out of the Google CEO job early this year, has everything to gain by helping lead the very lonely cheering section for Obama among Fortune 500 leaders. The timing of a full-blown antitrust investigation couldn’t be worse.

Google’s Android operating system toppled Research in Motion’s BlackBerry as the leading OS on smartphones.  The Tablet market has proven to be a tougher nut to crack. Apple’s share of the Tablet market rose to 68.3% in the second quarter while Android’s share fell to 26.8% from 34% the previous quarter, according to market researcher IDC.

Google seems to have learned from the missteps that Microsoft made in its antitrust battle. The most important is to appear to be humble.   The affable Schmidt has pressed the flesh with members of the powerful Senate Judiciary Committee three times. Google, though, also has launched a television advertising campaign targeting committee members, the Journal said.

This time, the company can’t afford to leave anything to chance.

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