Google Shows How To Navigate The Political Web

May.21.12 | About: Alphabet Inc. (GOOG)

The most important part of Google's (NASDAQ:GOOG) original "don't be evil" mantra was a desire to stay above the political fray.

But as the Internet has become increasingly vital, as it has come to define economies, it has of necessity become a political football. The ability of Internet companies to navigate these new, more treacherous political waters will define success or failure.

Google executive chairman Eric Schmidt put it well this weekend, in a graduation address at Boston University.

"You're connected to each other in ways those who came before you could never have dreamed of. You're using these connections to strengthen the invisible ties that hold humanity together and to deepen our understanding of the world around us."

Of course, the headline coming out of that talk was his advice to turn the Internet off for at least an hour each day, to have a real conversation, to engage directly with people rather than indirectly.

So how is Google doing at meeting the challenge? Not as bad as its critics think.

In both these cases, some reporters insist on looking at the negatives. China is making open sourcing Android a condition of approval. Europe is threatening antitrust action unless it's satisfied. But that's how all political deals get done, with a lot of posturing from the side that's essentially giving in.

Many people who look at this take a binary view of the market. You either "give in" to bad peoples' demands of stand on principle and get banned. Google has, so far, managed to find a third way, by focusing on its own image and reputation yet at the same time remaining open to negotiation.

The pressure from here will only get bigger. And all Internet companies will be measured on how well they do at it in comparison with Google. It's not as black-and-white as "don't be evil," but it may turn out to be better for the bottom line.

Disclosure: I am long GOOG.