Is Google Evil 3.0

Is

Evil?

Joe BuzzangaOctober, 2011

Joe BuzzangaOct. 2011

E sarà mia colpa, Se cosi è(And will it be my fault, if things are so?)Stendhal, Le Rouge et Le Noir, Chapitre 4, livre 1, apocryphal quote attributed to Machiavelli

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Topics

Market Power Case Study in Market Power: Microsoft Fear, Loathing and Monsanto The Accusers and their Grievances Google On Google The Open Ideology Concluding Unscientific Postscript

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A Billion Dollar Equation

http://youtu.be/hp7130Bjec4

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In the Beginning….

The web was small, and search was young

“In 1998, the year Google was incorporated, Yahoo!, which had hundreds of millions of users, was declared the winner of the “search engine wars” – it got twice as many visitors as its nearest competitor and had “eviscerated the competition.”

Source: Eric Schmidt’s testimony, Senate Antitrust Hearing, p.2 Sept. 21, 2011 http://www.bgr.in/2011/09/22/googles-eric-schmidts-testimony-at-ftc-anti-trust-senate-committee-hearing/

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But Today..Market Power

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And Growing..

Source: NY Times, Oct. 13, 2011

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Market Power=Marvelous MarginsSome Examples

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Market Power

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Quasi-Monopoly Rents and Profits

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Market Power: The Case of Microsoft

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Bill Gates Contribution to Humanity

Pay me for software !1976 open letter to hobbyists in Homebrew Computer Club Newsletter, Vol. 2, Issue 1, 1976http://www.digibarn.com/collections/newsletters/homebrew/V2_01/gatesletter.html

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The OS that Conquered the World

“windows is a hairball of an operating system” ---scott mcnealy, CEO Sun Microsystems

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U.S vs Microsoft

U.S. vs Microsoft: May,18, 1998 “Cut off the Air Supply” of Netscape

Attributed to Microsoft executive Paul Maritz, during Microsoft antitrust trial

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U.S. vs Microsoft

“MICROSOFT'S POWER IN THE RELEVANT MARKET 33.  Microsoft enjoys so much power in the market for Intel-compatible PC operating systems that if it wished to exercise this power solely in terms of price, it could charge a price for Windows substantially above that which could be charged in a competitive market. Moreover, it could do so for a significant period of time without losing an unacceptable amount of business to competitors. In other words, Microsoft enjoys monopoly power in the relevant market.

34. Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows.”

Source: Judge Jackson, Findings of Fact, U.S. Vs Microsoft, http://www.justice.gov/atr/cases/f3800/msjudgex.htm

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Fun With Bill

?

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Awkward Transition

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Fear, Loathing and Monsanto

http://www.pubpat.org/monsanto-seed-patents.htm

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Consider Your Friendly Wireless Carrier

Source: NY Times, Oct. 9, 2011 :http://www.nytimes.com/2011/10/10/

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Dominance Attracts Attention

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The Complaints

Google invades my privacy (consumers) Google violates intellectual property (media companies) Google search results are unfair (businesses) Google favors its content properties in it’s supposedly

“scientific” search results rankings (businesses) Google destabilizes governments

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Evil Empire?

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Google On GoogleWe’re the Good Guys

Motto: “Don’t be evil”

Mission: “Our mission is to organize the world’s information and make it universally accessible and useful” (Google 2010 10K, page 3)

The Open Ideology

The Cult of Numbers or Everything is an Engineering Problem

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Evil Empire?

“There is at Google a utopian spirit not unlike that found at the Burning Man, the annual anarchic-animistic retreat in Nevada’s Black Rock desert… Brin and Page have been regular attendees.

…Burning Man’s ten stated principles include a devotion to “acts of giving”; creating social environments that are unmediated by commercial sponsorships, transactions or advertising”; and a “radically participatory ethic” that can lead to “transformative change”

--Source: Auletta, Ken, Googled, New York, Penguin Books, p.18

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Google On Google: Products

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Google’s Product

Search Not software Not hardware Not content Not distribution

Brilliant but vulnerable Google utterly reliant on an open web

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Google on Google: Playing Defense“Basically, any product that stands between the user and Google and has the potential to distract the choice of search destination is a threat. A great example is Firefox. Like many browsers, Firefox has a search bar built into the upper right corner. This leads to a substantial number of Google searches for which Google pays Firefox a handsome fee.

They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layaers are basically software products with no variable costs, this is a very viable defensive strategy ”

--Source: The Freight Train That is Android, Abovethecrowd.com, March 24, 2011, http://abovethecrowd.com/2011/03/24/freight-train-that-is-android/

Android, Chrome, Google Apps, etc are a Defensive strategy to protect search

keep the open web strong and remove any proprietary or competing product layers between Google and users

Funded by monopoly profits?

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Google’s Customers

It’s not you and I

Who are our customers? Our customers are over one million of advertisers, from small businesses

targeting local customers to many of the world's largest global enterprises, who use Google AdWords to reach millions of users around the world.

Source: Google Investor Relations FAQhttp://investor.google.com/corporate/faq.html#money

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Google Revenues

96% of Revenues is Advertising (2010)(can this be consistent with the lofty mission?)

--Source: Google 2010 10K, p.29

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Early View of Advertising“Currently, the predominant business model for commercial search engines is advertising. The goals of the advertising business model do not always correspond to providing quality search to users….

For this type of reason and historical experience with other media [Bagdikian 83], we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.”

Source: Brin & Page: The Anatomy of a Large Scale Hypertextual Web Search Engine, Appendix A, Advertising and Mixed Motives, Stanford University, 1998

Figure 1: High Level Google Architecture

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But today…

The Revolution will be Ad-Supported

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Some Google Highlights (source Google 2010 10K)

“Google Instant (launched late last year) starts searching with every keystroke, thereby saving users time on every search. To date, Google Instant has now saved our users over 100 billion keystrokes and counting. Going forward, this is just the tip of the iceberg in terms of the kind of interactivity one should expect to see in search.

Google Translate works in 58 languages

…we've now scanned (and enable searchers to discover) more than 15 million books, which we estimate to be more than 10 percent of all the books published since Gutenberg—and we're still going strong. These books span hundreds of languages and over three million are already available online as Google eBooks.

YouTube, which is only six years old, now serves over two billion videos per day from a selection of over 500 million.

Android, our own mobile operating system for smartphones, first shipped only two years ago, and now it's the most used in the world with over 300,000 devices activated daily.

Chrome (Google’s web browser) was released two and a half years ago. Today, at version 10 Chrome is over six times faster than it was then and over 120 million people now use it. What’s more, it’s helping push browser standards forward everywhere.”

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A Syllogism on Domination

Search is the oxygen of the internet economy1

1.“Search is the oxygen of the information economy”

Doug Merrill, Google CIO, Aug. 2007http://www.youtube.com/watch?v=2GtgSkmDnbQ

Google Dominates Search

Google is the oxygen of the internet economy

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Why Google is Different than Microsoft

Search actually works No customer lock in; no switching cost Search is the “oxygen” of the web--- and the web disrupts

everything More transformative than MSFT Windows

Open Ideology Share the same engineering arrogance and hubris

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U.S. vs Google

“Senator Herb Kohl, a Democrat from Wisconsin and chairman of the panel, said Google’s mission appears to have changed over the years, as it has acquired companies like Motorola Mobility and Zagat. Early on, Google’s “goal was to get the user off Google’s home page and on to the Web sites it lists as soon as possible,” Mr. Kohl said. But critics now say Google favors its own businesses over others in its search results and other businesses like advertising and mobile.”

Source: NY Times, Sept. 21, 2011 Times Google

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Google’s Response

Significant competition from other search engines and other ways of finding information

“Among major search engines, Microsoft‟s Bing has continued to gain in popularity, perhaps because it comes pre-installed as the search default on over 70 percent of new computers sold. Microsoft‟s Bing is the exclusive search provider for Yahoo!…

…Microsoft‟s Bing launched in June 2009 and has grown so rapidly that some commentators have speculated that it could overtake Google as early as 2012.”

Source: Eric Schmidt’s Testimony, Senate Antitrust Hearing, Sept. 22, 2011

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Google’s Response

“Google‟s search results are ultimately a scientific opinion as to what information users will find most useful.”

Source: Schmidt testimony, Senate Antitrust Hearing, p.3

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The Virtuous Google

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The Virtuous Google

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The Open Ideology

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Google View: We’re the Good Guys

“At Google we believe that open is better than closed.” --Source: Schmidt Testimony, Sept 21, 2011, p.6

“We have also made strategic investments in critical product areas, like Android, Chrome, and Chrome OS—following our core philosophy of building open platforms with optionality, and creating infrastructure that allows everyone on the web to succeed”.

--Source: Google 2010 10K, p.3

• Develop an open marketplace• Support Standards• Provide APIs• Release source code

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Apple vs Google

“We did not enter the search business, Jobs said. They entered the phone business. Make no mistake they want to kill the iPhone. We won’t let them, he says. …This don’t be evil mantra: “It’s bullshit.” Source: Steve Jobs, Wired, Jan. 30, 2010

http://www.wired.com/epicenter/2010/01/googles-dont-be-evil-mantra-is-bullshit-adobe-is-lazy-apples-steve-jobs

/

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Apple vs Google

A Googler (Tim Bray): “The iPhone vision of the mobile Internet’s future omits controversy, sex, and freedom, but includes strict limits on who can know what and who can say what. It’s a sterile Disney-fied walled garden surrounded by sharp-toothed lawyers. The people who create the apps serve at the landlord’s pleasure and fear his anger.

I hate it.

I hate it even though the iPhone hardware and software are great, because freedom’s not just another word for anything, nor is it an optional ingredient.

The big thing about the Web isn’t the technology, it’s that it’s the first-ever platform without a vendor (credit for first pointing this out goes to Dave Winer).”

--Source: Ongoing by Tim Bray (personal blog)http://www.tbray.org/ongoing/When/201x/2010/03/15/Joining-Google

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The Open Ideology

http://googleblog.blogspot.com/2009/12/meaning-of-open.html

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Is Android Really “Open”

So, What’s Android’s Definition of Open Source? For Google and Android, open source basically means you can download and compile the code, and this makes it open source. However, Android developers can download code and do what they want with it, but they can’t see updates immediately like Firefox changes. They have to wait until Google gives them the updates they need. As far as openness, transparency, and community, they don’t exist with Android. Google still rules the roost.

Is There a Better Open Source Definition? According to the software industry, the term open source has three core principles. These are: • A license that insures the code can be modified, reused and distributed • A community development approach. • Assurance the user has total freedom over the device and software • Android has maintained their open source stature in totally legal ways. You

can download the code, use it, and redistribute it. However, the community development atmosphere and total freedom to control devices that utilize the software platform are very lacking.

 http://www.techdrivein.com/2011/08/how-open-source-is-android-after-all.html

http://www.visionmobile.com/blog/2011/07/the-open-governance-index-measuring-openness-from-android-to-webkit/

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The Ideology of “Open”

http://googleblog.blogspot.com/2009/12/meaning-of-open.html

While we are committed to opening the code for our developer tools, not all Google products are open source. Our goal is to keep the Internet open, which promotes choice and competition and keeps users and developers from getting locked in. In many cases, most notably our search and ads products, opening up the code would not contribute to these goals and would actually hurt users.

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The Open IdeologyClosed Open

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The Open Ideology :What is Property?

La propriété, c'est le vol! (Property is Theft!)--Proudhon

Private property a historically specific concept tied to the industrial revolution and its economic infrastructure

There is an edgy and radical element in the open source movement.

Google’s role is ambiguous

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The Cunning of History

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The Network Revolution

MicroprocessorsOpen Network Protocols ( TCP/IP)Software

• Circuit Switched• Analog• Command And Control• Dumb End Points• Separate Networks

ClosedOpen

• Packet Switched• Native Digital• Flat, Anarchic• Smart End Points• Media Unified on IP

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Publishing’s Future?

Source: NY Times, Oct.16, 2011 http://www.nytimes.com/amazon

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The Open Ideology: The Extreme View

“For the first time in human history, we face an economy in which the most important goods have zero marginal cost.

Two different philosophies about the nature of humanintellectual production are in confrontation. One of them has all the chips; the other has all the right answers. This is part of the long struggle in the history of human beings for the creation of freedom. This time, we win.”

--Source: Eben Moglen, Freeing the Mind: Free Software and the Death of Proprietary Culture, Keynote Address, University of Maine Law School, June 29, 2003, p.3, 15

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Concluding Unscientific Postscript

Evil is a moral concept, companies are amoral Google is virtuous: maximizes shareholder value The Google wave has already crested Google’s Strengths are its weaknesses STM and other content providers are collateral damage

Short term protection by the power structure Long term?