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“The quality of the leads is very good but we can’t get the volume we would like,” said Jason Carter, the UK managing partner for digital at Universal McCann. “We would like more competition in the marketplace.”

No wonder Microsoft re-ignited its courtship of Yahoo — the best way it can see of catching up on its search rival. A deal between the two could turn an effective monopoly into a duopoly. Meanwhile, talk of reining in Google — whether it is required, how it could happen — remains just that. Asked last November at a media conference for his thoughts on how the industry would develop, John Smith, chief executive of BBC Worldwide, said: “I wonder if regulators might start to gain an interest in search engines.”

Six months later, he and the rest of the industry are still waiting. Part of the trouble is that Google doesn’t look like much of a monopoly. Rather than driving up prices, it gives away for free all its services — maps, searches, e-mail and spreadsheets. Keywords are auctioned off to the highest-bidding advertiser.

Not surprisingly, Google is no fan of regulation. At the Zeitgeist event, co-founder Larry Page laid out why. “The internet is still very young,” he said. “It has really benefited from a small amount of regulation. If you have static regulation of businesses they tend never to change. We see this with some of the telecoms [firms] — their main customer ends up being the government regulator, not their real customers, people who are using these systems. That would be a mistake [for the internet].”

In a decade, Google has come from nowhere to reach a market value greater than Wall Street stalwarts Hewlett-Packard or Disney. However, the internet has proved to be a fickle medium with low barriers to entry.

In defending its own position, Google’s stock response is always that users are only a click from using a rival search tool. After all, it took no time for the likes of Altavista and Lycos to become spent forces. The trouble is that Google’s success means that consumers go elsewhere less and less often.

“There probably comes a point when they can’t use the same old argument,” said Simon Levine, joint global head of the technology, media and commercial group at the law firm DLA Piper. “It would be better if they were regulated properly. The only thing that makes them special is that regulators aren’t sure how to do it. That’s not a good reason for not doing it.”

Efforts in Brussels to impose some sort of governance on the internet for the first time have largely failed. Britain’s Ofcom rallied support among other national watchdogs to water down the Audio Visual Media Services Directive, a plan to police online content from the end of 2009 in the same way that regulators oversee broadcasting and advertising.

Like Google, Ofcom argued that new rules would stifle creativity and investment. In addition, chief executive Ed Richards is reluctant to wade into a fast-changing industry that has no country borders.

“What is clear is there is no public appetite to regulate the internet,” said Cliff Fluet, a media partner at the law firm Lewis Silkin. He estimates that 80% of the income lost by commercial radio flows online.

However, “TV-like” services, such as Itv.com and the BBC’s iPlayer, will still be covered by new rules, extending the inequality further. Google’s YouTube, where 10 hours of video clips are posted every minute, will be unaffected, relying instead on loose self-regulation. Google wants consumers and the partners it deals with to take it on trust that it will not act improperly.

“One of the big assets we have is a big consumer brand,” added Page. “It is very clear that our users are everybody and that is who we are answerable to. We need you all to trust us or else we have no business.”

Google argues that it commands only 9% of all UK advertising spending. For competition purposes, though, the Office of Fair Trading is yet to consider the UK advertising market as a whole, instead dividing it strictly along sector lines.

Google’s share of the UK market could grow exponentially if chief executive Eric Schmidt realises his ambition of selling advertising into the print, radio and outdoor markets.

Google’s £1.5 billion acquisition of Double Click will give it a strong position in online display advertising.

With a new communications act still three years away, the rest of the media industry is watching intently. Trinity Mirror’s Bailey said: “Given their strengths and market-leading position, it is critical that they remain true to their corporate philosophy: to make money without doing evil.”

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