Despite the challenges, Nadella emphasized Microsoft’s persistence in the search game. He conveyed his belief that search remains a vital software category that Microsoft can contribute to, even with its low market share.
Judge Amit Mehta, presiding over the trial, probed Nadella on how Google’s dominance may have hampered innovation in the market. Mehta inquired about the possibility of startups using AI innovation to challenge Google’s market share.
Nadella acknowledged the difficulties faced by startups, asserting that Microsoft’s significant investments in search have sustained other search players, such as DuckDuckGo, which relies on Microsoft’s search index. He emphasized the challenges faced by startups, attributing their struggles to Google’s default placements.
Market Strategies: Carrots and Sticks
Nadella’s testimony shed light on the intricate strategies that Google deploys to maintain its dominant position. He detailed Google’s use of both incentives and threats, describing it as a “game of carrots and sticks.”
