Let me start by saying that I’m sure the legal teams for both Facebook and Google are made up of some of the best and brightest corporate litigation minds known to mankind.  They do more than just eat their Wheaties every morning.

I believe it is a fair assessment that the legal counsel for Microsoft Corporation did it’s job pretty well back in 1998 when they thwarted a total breakup of the company after reaching a settlement with the federal government, a minor slap on the wrist in comparison to the possible alternatives. That being said, U.S. prosecutors brought litigation pursuant to the Sherman Antitrust Act in United States v. Microsoft and Bill Gate’s brain child has not been quite the same ever since.

Having to split publicly-held shares of the company, and loosen a proprietary barricade towards competition in the web browsing industry allowed for the birth of open source competitors like Mozilla.  It is quite clear that even despite a highly touted release of their new Windows 7 last month, Microsoft still has an uphill battle to return to the glory days of the 90’s.

Fast forward nearly a decade later and the same questions are rising to the surface again, but this time with Facebook and Google.

The reason: Both have an overwhelming majority of the market share in the social network and search industries respectively, and as 19th century English historian Lord Acton once said, “Power tends to corrupt, and absolute power corrupts absolutely.”

Google-Facebook-MonopolyAccording to comScore data, Facebook still has a firm lead in the race to be King of the Social Network, tallying 97.4 million U.S. users in October 2009, more than double the amount a year earlier.  Twitter dropped 7.9 percent in October from September, marking the second monthly decline for the social-networking site this year.  MySpace still stands in second place at roughly 50 million users.

Google controls approximately 65 percent of the search engine market.  Last month, Google ranked 1st in unique visitors again (shocker, I know)  with just over 164,000 unique visitors and the Google Ad Network ranked 3rd at 87 percent reach, narrowly behind AOL and Yahoo!  Today Google shares are trading at $584.84  (NASDAQ GS: GOOG), $6.00 above their 52-week high.

I understand the argument, ”If someone else’s products or services are more reliable and/or of better quality a free-market economy should allow for the cream of the crop to rise to the top.”  The problem is both companies are liquidating the competition by absorbing significant web properties such as YouTube and Feedburner in the case of Google and Friendfeed in the case of Facebook.  That is just a starting point.  Imagine what will happen as both Android and Google Chrome OS start to commandeer the operating system business?

Joshua Palau, contributing writer over at Search Engine Watch wrote a compelling piece “Google: The Accidental Monopoly“ in which he argues that you cannot fault Google for playing an active role in American Capitalism by making great products and crushing the competition.  He has some valid points, but one must not forget that whether it be accidental or intentional, as the old saying goes: if it walk like a duck, acts like a duck, and talks like a duck it’s probably a duck.

The facts cannot be ignored when bringing up monopoly or anti-trust in the same sentence as Google and Facebook.  I don’t believe that I’m a paranoid New Yorker cynical of big business and capitalistic expansionism.  I will be the first to praise both companies for creating outstanding software that has been tremendously beneficial to me both personally and professionally.  I do believe that if either company gains more power at the expense of their competition the quality and reliability of their software will ultimately pay the price.  Just take a look at Internet Explorer.

I would love to hear your thoughts on whether you believe Facebook and  Google are on their way to establishing monopolies or anything else you want to talk about.