The Computer & Communications Industry Association, a technology trade group, applauded the FTC for its handling of the high-profile case.
"This was a prudent decision by the FTC that shows that antitrust enforcement, in the hands of responsible regulators, is sufficiently adaptable to the realities of the Internet age," said Ed Black, the group's president.
The FTC has previously been criticized for not doing more to curb Google's power. Most notably, the FTC signed off on Google's $3.2 billion purchase of online advertising service DoubleClick in 2008 and its $681 million acquisition of mobile ad service AdMob in 2010. Google critics contend those deals gave the company too much control over the pricing of digital ads, which account for the bulk of Google's revenue.
If Google breaks any part of the agreement, Leibowitz said the FTC can fine the company up to $16,000 per violation. Last year, the FTC determined that Google broke an agreement governing Internet privacy, resulting in a $22.5 million fine, though the company didn't acknowledge any wrongdoing.
Google's ability to protect its search recipe from government-imposed changes represents a major victory for a company that has always tried to portray itself as force for good. The Mountain View, Calif., company has portrayed its dominant search engine as a free service that is constantly tweaking its formula so that people get the information they desire more quickly and concisely.
"The conclusion is clear: Google's services are good for users and good for competition," David Drummond, Google's top lawyer, wrote in a Thursday blog post.
Google's tactics also have been extremely lucrative. Although Google has branched into smartphones and many other fields since its founding in a Silicon Valley garage in 1998, Internet search and advertising remains its financial backbone. The intertwined services still generate more than 90 percent of Google's revenue, which now exceeds $50 billion annually.
Throughout the FTC investigation, Google executives also sought to debunk the notion that the company's recommendations are the final word on the Internet. They pointed out that consumers easily could go to Microsoft's Bing, Yahoo or other services to search for information. "Competition is just a click away," became as much of a Google mantra as the company's official motto: "Don't be evil."
Microsoft cast the FTC's investigation as a missed opportunity.
"The FTC's overall resolution of this matter is weak and — frankly —unusual," Dave Heiner, Microsoft's deputy general counsel, wrote on the company's blog. "We are concerned that the FTC may not have obtained adequate relief even on the few subjects that Google has agreed to address."
FairSearch, a group whose membership includes Microsoft, called the FTC's settlement "disappointing and premature," given that European regulators might be able to force Google to make more extensive changes.
"The FTC's inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators," FairSearch asserted.
Yelp also criticized the FTC's handling of the case, calling "it a missed opportunity to protect innovation in the Internet economy, and the consumers and businesses that rely upon it."
Investors had already been anticipating Google would emerge from the inquiry relatively unscathed.
Google's stock rose 42 cents Thursday to close at $723.67. Microsoft, which is based in Redmond, Wash., shed 37 cents, or 1.3 percent, to finish at $27.25.
In a research note Thursday, Macquarie Securities analyst Benjamin Schachter described the settlement as "the best possible outcome" for Google. "We believe that the terms of the agreement will have very limited negative financial or strategic implications for the company." Schachter wrote.
AP Technology Writer Barbara Ortutay in New York contributed to this story.