Amid Economic Wreckage And Political Resistance, The Good Ship Google Steams Ahead With Smart Grid, Android, Chrome & More

Advertising spending is down across the board and the financial markets are in a crisis not seen since the Depression. Layoffs are happening or appear to be impending at a number of high-profile tech companies, including HP, eBay and Yahoo. Yet Google appears to be navigating through these difficult economic waters as though it were singularly immune to the problems and challenges affecting everyone else.

At a time when contraction and retrenchment are in the air, Google is expanding ambitiously. Yesterday, for example, the company announced a multi-pronged effort with General Electric on renewable energy, including creation of a “Smart [Energy] Grid.”

A couple of weeks ago Google launched Chrome, a browser intended to help the company advance and accelerate development of Web-based software applications and “cloud computing.” Next week we’ll get the formal announcement of the “Google Phone” — an HTC made smartphone from T-Mobile featuring the Android OS and related software. These are just a few significant efforts from Google, among dozens and dozens of initiatives.

Google’s core business — search — appears to be strong than ever. Last week metrics firm Hitwise announced that Google had reached 71 percent search market share in the US:

In most of Europe the company is even further ahead, with 80+ percent (or more) market share. Though in Asia (Korea, Japan, China) and Russia, Google has struggled to gain traction vs. home-grown rivals. (Meanwhile, in India, popular protests and legal threats forced Google [and Microsoft and Yahoo] to remove illegal ads for pre-natal gender selection kits.)

Google’s broad success and ambition have won admiration in many quarters but also started something of a backlash against the company as too powerful in the US and abroad. That backlash is reflected in articles such as the one that appeared in the NY Times on Sunday: “Stuck in Google’s Doghouse.” Although the essence of the complaints in the article about Google’s opacity and unresponsiveness have long been leveled against the Mountain View company.

The growing concern about Google’s size and power is also reflected in the aggressive opposition to the Google-Yahoo paid search deal coming from the Association of National Advertisers and the World Association of Newspapers. Both entities issued letters to the US government last week urging it to block the deal.

Despite this mounting concern among some third parties, Google says it’s ready to move ahead and maintains there are no anti-trust implications to the ads deal. The company has also long said that the deal doesn’t require Justice Department approval. According to an AP story today: [Google CEO Eric] Schmidt said U.S. government regulators are doing their “proper job” in investigating his company’s contract with Yahoo. He added that Google has answered questions raised by regulators but did not know how they would respond.

The executive underscored that Google believes it does not need to receive specific government approval to go ahead with its contract to supply advertising to run alongside a portion of Yahoo’s Web search results. Schmidt said Google is committed to going ahead with the Yahoo deal, as planned, in October.

It will be interesting to see what happens if Google and Yahoo begin to implement the deal before any final US government say. The Justice Department has hired litigator Sanford Litvack to advise it on a possible anti-trust case against Google.

Unlike other companies that have wielded great market power and been subject to government regulation, Google does not appear to have manipulated markets for its own benefit or sought to unfairly undermine competitors. There are those who might argue otherwise of course.

Yet Google’s success is a remarkable story that has turned the company from a cool startup a decade ago into a global giant and highly polarizing entity today.