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Evil?

UPDATE: It’s looking more and more to me as if the New York Times report that provoked the first half of this post went too far. See the footnote below with denials of a deal from Verizon and Google, though those statements leave much to be asked: namely, what are the discussions; what is the compromise over net neutrality? But I just read this from a CNBC interview with Eric Schmidt that spoke more clearly: “Schmidt clarified that the net neutrality he advocates is not a neutrality between different types of content, but between the same type of content. He wants to make sure that there’s no discrimination between one video download over another.” So under that rubric, a YouTube video would not get discriminatory treatment over my video.

Update on the update: The Times stands by its story. What we need here is a good dose of transparency. It is, again, our internet they’re talking about.

The original post:

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The report that Google is making a devil’s pact with Verizon for tiered internet service is disturbing because I wonder whether people inside Google are still asking that vital question: “Is this evil?” I wonder whether Google is still Google.

I don’t mean to come off like a high priest of the net neutrality church. But if ISPs like Verizon can charge tiered pricing for quality (vs. unquality?) service, then it’s the consumers who’ll get screwed because costs will be passed onto us. ISPs (like newspapers) want added revenue streams but those streams always end up at our feet. But we know that.

What also concerns me is that creators will get screwed, too. Only the big guys will be able to afford to pay ISPs for top-tier service and so we return to the media oligarchy that — O, irony — YouTube and Google broke apart. Google, I fear, is gravitating back to the big-media side because it wants those brands on YouTube so it can get their advertisers on YouTube because those advertisers are still too stupid to see where the customers really are. And then we’re back to a world of big-media control over what we get to see. It was the millions of little guys — people who made their own videos, people who embedded videos — who made YouTube YouTube.

But that’s short-sighted strategizing, I think — I hope — because fragmentation is infinite; blockbusters will get ever-harder and ever-more-expensive to create; advertising will catch up with reality, the real world, and customers and (unless the Wall Street Journal ruins it) become far more targeted and relevant; advertising will also start to fade away; the mass market will shrink.

But this is a last-gasp attempt to hold onto mass-market economics (vs. open-market scale). [Craig Roth in the comments makes the critical point that the story I linked to is supposition rather than announcement, a caveat I certainly should have delivered. As I said in response to him, I thought this was worth discussing before it was fait accompli in the hopes that it won't be.]

It’s an uncomfortable moment for a Google fan boy. This report comes at the same time that Google killed Wave. Now Wave has had its detractors who are now cackling, but it’s not the specific platform that concerns me. It’s that Google can’t figure out how to launch new platforms. Wave was a bust. Buzz was a bust. Knol was a bust. Orkut was mostly a bust. Brilliant people like Gina Trapani hung their hats on these platforms; she wrote the book on Wave and others started developing it and now the rug’s pulled out from under them because Google didn’t support their development, which is what would have made Wave a success. Evil or merely rude?

The reason these efforts were busts is because Google didn’t think them through, didn’t have the corporate discipline to find and execute on clear-eyed strategy. I’m all for beta — I learned that lesson from Google — but you can’t just spend your life throwing shit against the wall to see what sticks. Eventually, you’re knee-deep in shit. But you can do that for a long time — if you have lots of money. A poor startup uses betas to learn precious lessons because they can’t afford to fail. This rich company is using betas, I fear, rather than making hard decisions up front — because it can afford to. So Wave may have ended up dead anyway but if it were run by entrepreneurs it would have struggled long and hard before taking its last breath.

I worry that Google isn’t an entrepreneurial company anymore. It didn’t start those platforms under the hard economics of entrepreneurship. And it hasn’t nurtured some outside entrepreneurs well. If it did, Dodgeball would be Foursquare today.

My real fear then is that Google is too big. I certainly don’t mean that in the way that EU regulators do: “so big we have to rule it.” Uh-uh. No, I mean it may be too big for its own good. Too big for the right hand to find the left hand and have coherent strategies for operating systems (Android v. Chrome) and applications (Docs v. Wave). So big that it starts to identify with other big guys (ISPs and Hollywood entertainment conglomerates). Big is a fine thing when it brings critical mass and the freedom to innovate. As Eric Schmidt himself says, lack of innovation can kill a tech company. So can bad innovation — fat innovation.

I’ve never bought the arguments that Google is a one-trick pony. Honda is a one-trick pony; it makes cars. That’s not Google’s problem. Its problem is that everything it faces is new and it can’t ever afford the luxury of leaning back on old lessons and old relationships. So what does it hold onto on that rapids ride? It has to hold onto its mission — organize the world’s information, etc. — and its evolving definition of evil so it doesn’t stray. It also needs to find the organizational structure — the firm-jawed management — to force different teams with different agendas to work to shared goals and to hold them to entrepreneurial discipline.

All of these are just early warning signs — every early. It’s good — for Google and also for a fan boy like me — to see these cracks because, used properly, they are lessons that help a company get back on its track and shade its eyes from the bright glare of hubris. But only if they ask the really hard questions. Like, is that evil?

: MORE: On a different thread, I also want to note that I think the way this devils’ deal works out is that it will give the FCC and possibly even the FTC and Congress the rope they need to hang ISPs on net neutrality. Is that Google’s really evil plan? It doesn’t like regulation but wants it in this case and so it’s creating the invitation for it? Naw. As I said, I’m not a conspiracy theorist. In any case, I do think that such a deal will invite regulation.

: I won’t cry for ISPs. I was at a meeting of cable ISPs some years ago when they were all cackling about their margins on broadband exceeding 40%. They ain’t hurting. The solution to all this remains competition. Remember that Google’s founders entered the big spectrum auction a few years ago to force neutrality and they want broadcast white spaces opened up to become “wi-fi on steroids” and thus competition for broadband providers.

: ALSO: I want credit for not making a WWGD? gag. I leave that to Twitter. But it may, indeed soon be time for a sequel (or update).

: LATER: Verizon put a statement on its public policy blog that says the Times report linked above is “mistaken.” It doesn’t say whether there’s any agreement but talks about its “purpose” — a “policy framework that ensures openness and accountability, and incorporates specific FCC authority, while maintaining investment and innovation. To suggest this is a business arrangement between our companies is entirely incorrect.” I’m not sure what that means. The more transparency about these dealings from all parties — including the FCC — the better.

Google said on its public policy Twitter feed: “@NYTimes is wrong. We’ve not had any convos with VZN about paying for carriage of our traffic. We remain committed to an open internet.”

The AP quotes the FCC saying that Google and Verizon are involved in stakeholder talks and Verizon is quoted saying that it is talking with Google about a “compromise on net neutrality” in the AP’s phrasing. The question remains: What are they talking about?

Google takes the FTC to school

Google just issued a response to the Federal Trade commission’s staff discussion draft on potential recommendations to support the reinvention [read: preservation] of journalism [read: newspapers]. (here was my reaction). It’s a wonderful document that takes the FTC — and the news industry — to school on the First Amendment, copyright, fair use, antitrust, media history, business, and technology. The government and publishers should be embarrassed to need such remedial education.

Highlights:

This says it best:

The large profit margins newspapers enjoyed in the past were built on an artificial scarcity: Limited choice for advertisers as well as readers. With the Internet, that scarcity has been taken away and replaced by abundance. No policy proposal will be able to restore newspaper revenues to what they were before the emergence of online news. It is not a question of analog dollars versus digital dimes, but rather a realistic assessment of how to make money in a world of abundant competitors and consumer choice.

Google’s doc leads off with promotion of its efforts to work with news organizations: Living Stories, traffic sent to news sites, technology help, and so on. They might as well just have linked to James Fallows’ paean and Eric Schmidt’s Wall Street Journal op-ed. You’ve heard these points before. My problem with them, as I’ve said, is that Google is trying to make friends with an industry that only wants enemies to blame for its failures. But at last, Google stops pulling punches and slaps down the industry’s self-deluding myths and the FTC’s dangerous ideas.

“[T]he current challenges faced by the news industry are business problems, not legal problems,” Google says,”and can only be addressed effectively with business solutions. Regulatory proposals that undermine the functioning of healthy marketplaces and stall the pace of change are not the solution.”

Google points out that newspapers’ circulation peaked between 1890 and 1920; that newspapers declared radio would kill them and only newspapers should hold the sacred and hallowed mission of news; that newspapers declared TV would kill them and characterized broadcast reporters as “parasites” (a lovely tip of the hat to Rupert Murdoch). We won’t buy that again. “The internet, rather than being the cause of journalism‘s downfall, provides a unique opportunity for news organizations to renew and reinvigorate journalism,” Google says.

Google lectures the FTC and the industry on internet business basics: “Unfortunately, the Discussion Draft does not acknowledge the basic economics of search engines and similar services and instead erroneously suggests that search engines are somehow cannibalizing newspaper advertising revenue rather than serving as an important connection to potential consumers.” Aggregators, Google points out earlier, send traffic and business opportunities to publishers. And Google does not make a significant amount of revenue from news … just as newspapers do not (subsidizing it with more lucrative verticals).

Google lectures the FTC et al on the unbundling of news. Fact o’ life. It then offers a primer on how publishers should be treating the readers who come to them via links.

Google restates the FTC’s dissection of newspaper revenue: 80% advertising, 17% newsstand, 3% subscriptions. “Pay walls,” it says, “could be an effective way to raise the 3% revenue figure.” A zinger for publishers. But Google’s fine with pay walls if publishers want them. It’s just not fine with government regulating them. “Innovating to create products and services that consumers want to pay for,” Google says, “is the only way to guarantee long-term subscription revenue growth, and none of the policy proposals are designed to foster that kind of innovation.” A zinger for the FTC (one I wish Google had dwelled on more since it does know innovation.)

Another zinger to the industry and the FTC comes as Google points out that classified revenue implosion had “nothing to do with copying or free-riding and everything to do with the emergence of a new, more effective and more efficient product into the marketplace. The FTC would ordinarily regard such a situation as a cause for celebration – consumers are getting a better product at a lower price – not an opportunity to slow down that innovation through regulation.”

Google salutes the flag the FTC raised on making government information more accessible — but then Google went the extra step to suggest “harmonization of state and federal law relating to copyrightability of government information.” There, the agreement ends.

Google decries proposals to extend copyright law and limit fair use and repeats its fine arguments against the antiquated notion of hot news from its FlyOnTheWall brief. “Facts, hot or cold, cannot be protected by copyright since there is no author of them,” Google instructs the FTC. “This has been the law of copyright since its inception….”

Google goes after proposals to establish taxes and fees to support legacy news operations. And it attacks efforts to let news organizations fix prices and charge aggregators. The doc makes the FTC eat its own words: “The FTC‘s long-standing position regarding antitrust exemptions properly subordinates a desire to advantage individual firms (here, print news organizations) to the need for a competitive, even playing field that offers the maximum good to consumers.”

Bottom line: There’s no need for the FTC’s meddling:

….Google continues to work with publishers to find ways to ensure that journalism survives and thrives on the Web. We remain optimistic about the future of journalism: The Fourth Estate is too crucial a part of a functioning democracy, and the Internet too powerful a medium, for journalism to die in transition to a Web-first approach. News organizations have more readers than ever, more sources of information than ever, more ways to report and tell stories than ever, and more potential ways to generate revenue than ever. Journalism will change, but the free market and free society will ensure that it won‘t die.

Amen and good night.

Comments to FTC 20 July 2010

Related: Here’s a segment of On the Media this week with me lambasting the FTC:

The Quark of programming?

I think Google’s App Inventor tool that enables anyone to program an Android app could be profound. But then, I thought Buzz was a big deal, so what the hell do I know?

Is it possible that the App Inventor could do to development what Quark did to publishing and Blogger did to the web: enable anybody to do it?

Dave Winer is skeptical and speaks from experience. He and I just made a bet: “that in two years Google’s Android app developer will not have any effect on the priesthood of programming.” If it does, Dave pays me — and he’d be a happy man if he loses. But I fear he’s right and I’ll end up paying him $20, making us both sad because in my view it’s a good thing when priesthoods get displaced. (Nick Carr, Andrew Keen, et curmudeonly al would disagree.)

As soon as I tweeted about App Inventor, developer curmudgeonliness erupted. @srmccoy said, “I’m afraid the WYSIWYG model is going to create a bunch of lazy devs who never bother to learn the skills of their craft.” That’s what I heard about Quark and design in its time. @fakebaldur said, “Quark was an exp. app for print designers, blogger free for amateurs and App Inventor a hideous monstrosity for geeks.” Straddling the fence, @thunsaker said, “I’m kinda scared of what this will produce. Glad that non-techies will bet a taste of development, though.” Now that’s the attitude.

Will App Inventor yield lots of crappy apps? Of course, it will, just as Quark enabled sinful design and Blogger wasted bits. That is true of all such technologies that lower the barrier to entry to a former domain of priests. That’s precisely what the printing press did. As much as the web breaks down priesthoods, it created new ones. Developers are merely the latest. They say that mortals can’t do what they do. But what if they could? What if they could translate a thought not just into words and design but into action?

I imagine Marc Benioff of Salesforce.com going positively batshit over this, enabling businesses to create apps for, say, their sales teams to manage and share information about and with clients. I imagine small businesses using App Inventor to create apps like Chipotle’s that enable customers to make burrito orders before they arrive. I imagine teachers being able to make exercises and quizzes in apps (forget the electronic textbook; give me the electronic workbook!).

More important, I imagine, as @thunsaker says, someone who never thought she’d develop picking up App Inventor to make the first step and then deciding to learn more using more sophisticated means. That’s how priesthoods really get destroyed. Oh, at first, the priests always lament that people can do crappy versions of what they do. But soon, they, too, start making good versions. And that’s when priests are displaced.

App Inventor is also a brilliant competitive shot at Apple. Steve Jobs would never tolerate this as he won’t tolerate crap. So those companies and small business and teachers I listed above will have to go to the free space of Google’s Android to create. There’s a clear competitive differentiation. Google believes it will win by having more devices running its free OS and more applications running on them.

But this also brings out a key challenge for Google and another key competitive differentiation: quality. There will be — there already is — more crap on Android. So Google has to do two things: invent better means to surface quality (if anybody can do that, they damned well better be able to) and encourage the creation of more quality (I think they need to invest in talent, as YouTube is doing with video creators). That’s what I said on the latest This Week in Google.

On Twitter @charlesarthur invoked Sturgeon’s Law. I’ll invoke another. What App Inventor really does is bring the new law of content creation even to development: In a world of overabundant content creation, value flows to the curator. Before, development talent and resources were scarce. Now, if their product is not scarce and if easy tools make the creation of crap easier, then there’s value in finding and enabling the good stuff. The trick is extracting value from that; that’s the problem journalists are having today.

As my son goes off to college to study computer science, this makes me wonder whether there’s a new opportunity and challenge here. Dave Winer’s right to question whether there will be any impact at all. We’ll see. I have $20 and more riding on this.

There is no hot news. All news is hot news.

The most dangerous defensive tactic parried by legacy news organizations today is their attempt to claim ownership of “hot news” and prevent others from repeating what they gather at their expense for as long as they determine that news is still hot. It is a threat to free speech and the First Amendment and our doctrines of copyright and fair use. It is a threat to news.

The old companies — NY Times, Advance, Gannett, Belo, McClatchy, Scripps, AFP, AP, Washington Post, et al — are lining up against the new companies — Google and Twitter — on hot news as they file briefs in the TheFlyOnTheWall.com case. I’ve just read both briefs and will give you highlights in a moment.

Hot news also makes an ominous appearance in the Federal Trade Commission’s thinking about rescuing legacy news companies as it proposes a constitutionally abhorrent doctrine of “proprietary facts.” And hot news is a factor in the dissemination of Rolling Stone’s story about Gen. Stanley McChrystal, which the Times’ David Carr writes about today, scolding Time and Politico for reproducing the story because RS hadn’t (and because it was so hot).

Hot news refers to a 1918 case, INS v. AP, in which one wire service — barred from transmitting news from Britain in the war — rewrote the others’ news for its clients three time zones away. It was cited in the Fly case, in which brokers — Barclays, Merrill, Morgan Stanley, et al — complained that the web site repeated its analysts’ recommendations. Now news companies want to use hot news to restrict aggregators and others; Google and Twitter are trying to cut them off at the pass.

Hot news is ridiculously obsolete. What’s hot today? As Tom Glocer, head of Thomson Reuters, said, his news is most valuable for “miliseconds.” Hot news limitations should be repellant to journalists, even desperate ones, because every journalist builds on the facts revealed by others. It should further be repugnant to them as it constitutes a form of court-supervised prior restraint. Hot news restrictions would be suicidal to news organizations — even though they foolishly think it would protect them — because it would restrict everyone’s ability to spread the news via links and send journalists audience. Hot news should worry every citizen because the free flow of information is vital to a democracy.

The architecture of news and media — how it is gathered and shared — has changed utterly since 1918 … and 1998. That’s what makes the Rolling Stone story instructive. McChrystal’s quotes leaked and spread instantly, having significant and instant impact on news and the affairs of state. The fact of the quotes was hot news indeed. As I asked four days ago, under hot news, would the magazine have been able to prevent others from repeating these facts? Ridiculous, no? Because Rolling Stone did not publish its own story online and because it was so hot, Politico and Time published PDFs of it — even though Time is a party to the Fly brief — which Carr perhaps rightly scolds them for. But maybe he should also scold Rolling Stone for not recognizing the importance of its news and recognizing the opportunity in sharing it. Once Rolling Stone did put the story on the web, the other publications linked to it. The link economy works when given a chance. So does the First Amendment.

“Once facts are made public,” says the Google-Twitter brief, “they belong to the public.” Once McChrystal’s quotes were known, they were part of the democratic dialog. To restrict us — anyone — from repeating them is to steal from the public. (That is a key argument in my next book.) “The reporting of truthful information,” says the brief, “is one of the most protected forms of speech under the Constitution…” These parties aren’t just fighting about old and new media. They are fighting about the nature and value of the public sphere.

The two briefs illuminate the worldviews of the two camps all too clearly. The legacy companies’ brief argues that hot news is “necessary to protect the news industry’s incentive to gather and report news….” It complains about “free riders” who may repeat their news at lower cost. “One of the greatest concerns among news originators,” they say, “is inexpensive technology that allows easy aggregation of news.” The legacy companies nowhere even acknowledge the economic value of links to their news.

The news companies complain about newspapers going bankrupt, not acknowledging that fate came as the result of high debt and mismanagement. They even have the balls to whine that news is a “low-margin business under economic pressure” (though not long ago, it was a high-margin monopoly). They say they are not going after occasional use of others’ facts — since they all do it — but instead the “systematic” (read: computerized) gathering of their news. They do not acknowledge the tools — robots.txt — that allow them to cut off aggregators. It’s an intellectually disappointing, morally weaselly attempt to get anticompetitive aid from the courts while blithely ignoring the profound constitutional implications for news and the democracy.

The Google-Twitter brief issues many calls to the importance of free speech and news in a democracy that only a few years ago the news organizations would have been saluting. It cites a 1991 case, Feist Publications v. Rural Telephone Service, in which the court said that “[t]he first person to find and report a particular fact has not created the fact; he or she has merely discovered its existence.” Thus even competitors “remain free to use the facts contained in another’s publication to aid in preparing a competing work.” Says the brief: “Central to Feist is the rejection of the notion that ‘sweat of the brow’ can itself create intellectual property rights. ‘The primary objective of copyright is not to reward the labor of authors but to “promote the Progress of Science and useful Arts.”‘” Hot news, they argue, “attempts an end-run around the Copyright Clause.”

Google-Twitter remind the court that news organizations all use each others’ facts: TV stations repeat newspapers’ reporting without attribution and now newspapers do the same to TV. Indeed, the brief says Feist establishes that “the freedom to use facts — even to “free-ride” on facts gathered by others through great effort — is constitutionally protected. Friend Spencer Reiss just told me how he moved mountains to cover Nelson Mandela’s release from prison in time for a hard Newsweek deadline only to find that his editors in New York got what they needed from TV. That is our news ecosystem; it’s not new, only bigger and faster.

“In a world of modern communications technology,” the Google-Twitter brief says, “where anyone with a cell phone may disseminate news throughout the world even as it is occurring, the notion that a single media outlet should have a monopoly on time-sensitive facts is not only contrary to law, it is, as a practical matter, futile.” They worry that news organizations would pay sources not to cooperate with competitors and that judges would become “super-editors” determining the hot time period of, in their example, news about the Times Square bombing.

Worse, even the fear of litigation would “chill the lawful dissemination of important news by fostering uncertainty among news outlets as to how long they must ‘sit’ on a story before they are free of a potential ‘hot news’ claim.” During last week’s damaging storms in the New York area, I saw a Long Islander complain that by keeping its news behind a wall, Newsday was ill-serving the safety of its community. Says Google-Twitter: “Breaking news may involve a threat to public health or security, but the district court’s opinion, if affirmed, would stifle the dissemination of such crucial facts — a particularly dangerous outcome in circumstances where the time-sensitive nature of the event is the precise reason why the facts should be widely disseminated as quickly as possible.” If Newsday has a better forecast than a competitor, could it keep the fact of a warning of danger to itself?

In the U.S. and Europe, news organizations are trying to extend copyright and limit fair use but the Google-Twitter brief is eloquent in objection. “Under Feist, this Court has repeatedly confirmed that facts must remain in the public domain, free from any restraint or encumbrance.” It quotes another case: “[A]ll facts — scientific, historical biographical, and news of the day … may not be copyrighted and are part of the public domain available to every person.” Another: “[R]aw facts may be copied at will. This result is neither unfair nor unfortunate. It is the means by which copyright advances the progress of science and art.” Another: “[A]llowing the first publisher to prevent others from copying such information would defeat the objectives of copyright by impeding rather than advancing the progress of knowledge.” Do news organizations truly want to oppose the progress of knowledge?

Says the Google-Twitter brief: “The modern ubiquity of multiple news platforms renders ‘hot news’ misappropriation an anachronism, aimed at muzzling all but the most powerful media companies. In a world of citizen journalists and commentators, online news organizations, and broadcasters who compete 24 hours a day, news can no longer be contained for any meaningful amount of time.” This fight sn’t just about a few huge companies. This fight is about our rights.

Google finally reveals AdSense cut: 68% on content

At last, Google is revealing its split on AdSense: 68% to publishers for content ads, 51% for search ads.

I had two primary complaints about Google in my otherwise admittedly and obviously wet-kiss book, What Would Google Do?: Google’s policy aiding government censorship in China and its opacity on advertising relationships. The first is pretty much fixed and this morning, Google is addressing teh second. so is the second. (Uh-oh, now I have fewer excuses not to be a fanboy.)

At a press meeting with Google execs in Davos in January, I pressed them about the advertising openness, having discussed the issue with publishers at DLD in Munich right before. In Davos, Google’s president of global sales, Nikesh Arora, replied that the company was reconsidering its transparency on AdSense. This morning, they’re revealing the deal in a blog post (to which I’ll link as soon as it’s up; this news was embargoed for 10a ET). From the post:

Today, in the spirit of greater transparency with AdSense publishers, we’re sharing the revenue shares for our two main AdSense products — AdSense for content and AdSense for search. . . .

AdSense for content publishers, who make up the vast majority of our AdSense publishers, earn a 68% revenue share worldwide. This means we pay 68% of the revenue that we collect from advertisers for AdSense for content ads that appear on your sites. The remaining portion that we keep reflects Google’s costs for our continued investment in AdSense — including the development of new technologies, products and features that help maximize the earnings you generate from these ads. It also reflects the costs we incur in building products and features that enable our AdWords advertisers to serve ads on our AdSense partner sites. Since launching AdSense for content in 2003, this revenue share has never changed.

We pay our AdSense for search partners a 51% revenue share, worldwide, for the search ads that appear through their implementations. As with AdSense for content, the proportion of revenue that we keep reflects our costs, including the significant expense, research and development involved in building and enhancing our core search and AdWords technologies. The AdSense for search revenue share has remained the same since 2005, when we increased it.

We also offer additional AdSense products including AdSense for mobile applications, AdSense for feeds, and AdSense for games. We aren’t disclosing the revenue shares for these products at this time because they’re quickly evolving, and we’re still learning about the costs associated with supporting them. Revenue shares for these products can vary from product to product since our costs in building and maintaining these products can vary significantly. Additionally, the revenue shares for AdSense for content and AdSense for search also can vary for major online publishers with whom we negotiate individual contracts.

Of course, we can’t guarantee that the revenue share will never change (our costs may change significantly, for example), but we don’t have any current plans to do so for any AdSense product. Over the next few months we’ll begin showing the revenue shares for AdSense for content and AdSense for search right in the AdSense interface.

They’re also not revealing splits for YouTube, a program that just started. Note also that big publishers, such as the New York Times Company, have long known — and negotiated — their splits, which also aren’t revealed. A Google spokesman told me last night that these splits hold for classic AdSense pay-per-click ads and also for newer display, CPM ads. They also hold globally.

How do the splits compare? It’s not uncommon for ad networks to take 50% or more. BlogAds, one of the more generous networks, customarily takes 30% on sales it makes and has other models (if sales come through a publisher site, only 14%; they also offer networked sales).

: LATER: On Twitter, I noticed some confusion about agency commissions vs. sales commissions. Agency commissions are on the buy side as ad agencies take a commission — often, 15% — for placing media. That’s not what we’re talking about here. This is a sell-side commission and I know, for example, that when it started, DoubleClick took at least 50% for sales. DoubleClick also serves ads and that’s a separate fee. I don’t have the latest numbers for these separate tasks; if you can add figures, I’d be grateful.

Google’s German screw-up

Since some have asked — from media and Twitter — here’s my take on Google collecting too much data via its Street View car — not just wi-fi addresses but “payload data” that went over those networks:

Google fucked up.

It’s pretty much as simple as that. And their screw-up sure doesn’t help me when German media come to me asking how I can defend the Google they love to hate. I got a bunch of conspiracy-laden questions from a German reporter this morning: Google says it was a mistake and the reporter asks — not without betraying a considerable bias — “Is that really possible?” I responded: “Yes. Google is not perfect.” The reporter asked: “What will Google do now? Is there a chance to completely recover?” There’s wishful thinking in that question, eh?

Let’s analyze the situation: To what conspiratorial use could Google have possibly put a trace smattering of random data caught in one moment on a given street? I would challenge anyone to take that data and find a business purpose for it. In one second on one street in Hamburg one unknown user read a story on Focus.de. Yeah, so what?

Somebody fucked up. It was sloppy and stupid of them and sure doesn’t help their PR problem in Germany. But I struggle to see how this story shows anything more than that.

Well, it does show one thing: The bias that German media have toward Google. When I was at re:publica in Berlin, I got questions like these from many German reporters: “Isn’t Google too big?” they’d “ask.” Show me the law that defines “too big,” I responded. I contend that German media are merely jealous: Google understood how to make money online better than they did. And they are reflexively running to government to regulate it and can’t find a reason why. So when something like this screwup happens, they get their hopes up.

But this also shows how out of touch German media is with its audience on this point, for the German populace clearly does not mistrust and hate Google the way media do. They use Google more than just about any country on earth, giving Google search a 97.26% share of market. Was gibt? Was geht?

Source: StatCounter Global Stats – Search Engine Market Share

Finally, good news for Google

James Fallows writes an important cover story for The Atlantic on how Google wants to help save the news. It doesn’t break a single new nugget of news. It’s the piece’s attitude that makes it must reading for everyone in the news business, in the U.S. and even moreso in Europe.

Google is not the enemy. But don’t take my word for it if you don’t want to. Take Fallows’.

Fallows, who has been admirably forward-thinking and curious in his coverage of technology and media (see his test of Bing v. Google, for example), comes at the question of Google’s relationship to news as neither enemy nor fanboy. He simply wants to understand what Google’s attitude is toward the news and then what the company is doing to back up its expressed sentiments about helping save (or I’d prefer to say, advance) news. He writes:

Everyone knows that Google is killing the news business. Few people know how hard Google is trying to bring it back to life, or why the company now considers journalism’s survival crucial to its own prospects…. But after talking during the past year with engineers and strategists at Google and recently interviewing some of their counterparts inside the news industry, I am convinced that there is a larger vision for news coming out of Google; that it is not simply a charity effort to buy off critics; and that it has been pushed hard enough by people at the top of the company, especially Schmidt, to become an internalized part of the culture in what is arguably the world’s most important media organization. Google’s initiatives do not constitute a complete or easy plan for the next phase of serious journalism. But they are more promising than what I’m used to seeing elsewhere, notably in the steady stream of “Crisis of the Press”–style reports.

Fallows says that the three pillars of a new online business model for news, in Google’s view, are “distribution, engagement, and monetization.” My equivalents are the conveniently alliterative engagement (for the public), effectiveness (for advertisers), and efficiency (in the operation). That is to say, Google doesn’t touch — nor should it want or need to — the fourth and vital leg to sustainable business models for news: cost. That’s what will make it easier to get Politico’s local product, TBD.com, to profitability more easily than the competitive Washington Post can stay there. That’s why I am looking more at the entrepreneurial than institutional future of news. That’s why I think this quest Google and others are on is about more than saving newspapers and more than saving news; it’s about finding new opportunities. But nevermind that.

What Fallows finds inside Google is people who care about news, who are working to try to create new forms for news and structures for the companies that produce it, who are indeed making it a priority. He finds people who want to work together. I say news companies are fools not to at least listen.

Confusing *a* public with *the* public

I think Facebook’s problem lately with its disliked like button (and Google’s problem with the start of Buzz) is that they confuse the notion of the public sphere—that is, all of us—with the idea of making a public—that is, the small societies we create on Facebook or join on Twitter. Private v. public is not a binary decision; there is a vast middle inbetween that is about the control of our own publics. Allow me to explain….

Flickr: taberandrew

I’ve been trying to understand the vitriol I’ve seen in some quarters about Facebook’s latest moves—because I don’t fully get it. Oh, I understand the confusion Facebook’s privacy changes and settings cause—as Business Insider said, “Online privacy is the new programming a VCR.” Read EFF’s disquieting timeline of the mutation of Facebook’s privacy policy and look at this brilliant visualization of how Facebook has made the private public. I understand the problem.

But why is the reaction to Facebook’s latest move—the like button—so swift and so fierce, so last-straw-on-the-camel’s-back to some? Gizmodo dyspeptically listed 10 reasons to quit Facebook. Gizmodo and Engadget founding editor Peter Rojas quit Facebook, as did Google’s Matt Cutts, and my This Week in Google boss Leo Laporte disabled his account for awhile. Three heavier heavyweights in our world it’s hard to find and when they lose trust—which is what happened—that’s a big deal, bigger than Facebook seems to realize.

Clearly, there’s something more going on here, something fundamental. Facebook overstepped a line and so I want to try to find that line. I think it may lay here:

Facebook and Mark Zuckerberg seem to assume that once something is public, it’s public. They confused sharing with publishing. They conflate the public sphere with the making of a public. That is, when I blog something, I am publishing it to the world for anyone and everyone to see: the more the better, is the assumption. But when I put something on Facebook my assumption had been that I was sharing it just with the public I created and control there. That public is private. Therein lies the confusion. Making that public public is what disturbs people. It robs them of their sense of control—and their actual control—of what they were sharing and with whom (no matter how many preferences we can set). On top of that, collecting our actions elsewhere on the net—our browsing and our likes—and making that public, too, through Facebook, disturbed people even more. Where does it end?

Facebook has been playing this tension since its early days. Remember the hubbub over News Feed: When Facebook aggregated our updates into feeds, it freaked users, even though Mark Zuckerberg pointed out that all these updates were already visible to us among our friends on their pages. Zuckerberg’s vision was right in the end; the News Feed is critical to Facebook’s utility, value, and growth and it presaged the appeal of Twitter. But even in the public Twitter, even though we are publishing to the world, we still have a measure of control; we decide whom to follow—that is, which publics to join.

So let me repeat: In Facebook, we get to create our publics. In Twitter, we decide which publics to join. But neither is the public sphere; neither entails publishing to everyone. Yet Facebook is pushing us more and more to publish to everyone and when it does, we lose control of our publics. That, I think, is the line it crossed.

The irony in all this is that I think Facebook has been profoundly redefining our notion of a public in ways that—judging by its actions—even it does not fully grasp. I am listening to a fascinating radio series (and podcast) on the CBC based on the work of a project called Making Publics. This group of academics began five years ago with Jürgen Habermas’ belief that the public sphere—the counterweight to the state as heard through public discussion and opinion—did not emerge until the 19th century. They also agreed that prior to the Renaissance and the 16th century, “public” referred to people with public standing in the social hierarchy—the elite—rather than to all of us. But then the Making Public team saw that during the 16th and 17th centuries, the printing press, theater, art—that is, the means to publish and present—as well as markets enabled people to create and join their own publics.

I am struck with how similar that moment of change is to the internet’s upheaval today. Gutenberg’s press—and the arts of painting and theatre and the skill of map-making—enabled a still-small elite to create publics; indeed, their hold on the public stayed in place until only a decade ago. Today, the web enables all of us to publish and thus to make publics and also to join new publics (and destroy the old, elite definition and control of the public). The three key inventions of the early-modern era that enabled this change were the compass, gunpowder, and the press. Our equivalents are—what?—the net, the web, and blogs. Berners-Lee is our Gutenberg. Or is it Ev?

Facebook refined the gross sense of publicness that blogs put in the hands of us all: everyone publishing to everyone. Its social network gave us the tools to create and join our own publics and gain control over what we make public and who can join it. That was a powerful gift that shifted the basis of interaction online from flaming to friendship, built on real identity and real relationships. Facebook helped civilize the internet. Yet I don’t think Facebook understands the value of that control because it continues to try to make us entirely public.

See once more Matt McKeon’s visualization of Facebook’s public evolution. Hear, too, Zuckerberg’s Law: “I would expect that next year, people will share twice as much information as they share this year, and next year, they will be sharing twice as much as they did the year before.”

People accuse Zuckerberg of killing privacy and of wanting it dead. I think that’s likely unfair. I think instead he does see a profound cultural shift, one that existed before him but one that he took advantage of and then served and refined: We connect by sharing. In his view, I’ll bet, he’s not killing privacy; we are. He’s fine with that. And to an extent, so am I, as I argue the value of publicness. But both of us miss this subtle but profound distinction between the public and a public at our peril. That’s the lesson I’m trying to learn here as I start to write a book about publicness (more on that later).

I will argue that we face choices today about keeping something private or sharing it with our public or with the public at large and that we need to see the benefits of sharing—the benefits of publicness—as we make that calculation. I will argue that if we default to private, we risk losing the value of the connections we can make today. I will argue that we need institutions—companies and governments—to default to public. And I will argue that the more we live in public, the more we share, the more we create collective wisdom and value. I will defend publicness. But I will also defend privacy—that is, control over this decision.

I would not be surprised to hear that Zuckerberg shares this gospel. I think he’s sincere when he says he sees Facebook as a tool to enable us all to change our world through connections. I think that’s why he’s pushing us to be public; it’s more than just a cynical commercial motive. Yet I think he gets in trouble when he doesn’t see these distinctions, which I’m trying to discern in our new definitions of private, public, publics, and identity. And so he risks blowing it. But I still think it’s not too late.

I don’t believe Facebook has gone evil—or gone rogue, as Wired insists. The problem for Facebook is more likely that it never defined evil—as in “don’t be evil.” Google is aware of its line, which is about losing value if it loses trust. Facebook seems almost unaware of its line and perhaps that’s because its is harder to find. I suggest they study 16th century history and the origins of the public as they reinvent the public.

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Flickr: Matthew Burpee

All this is related to the question of identity online—related but different. What I publish can add up to my identity and with different publics I have different identities. So identity is a key component of our notions of publicness.

The admirable Diaspora Project is trying to build an open and distributed version of Facebook to let us publish, aggregate, and control our own stuff to make up our own identities. That’s great, but I think that, too, conflates the ideas of a public and the public; it does what Zuckerberg is doing by having us publish everything to all, except it gives us ownership of that. I’m not criticizing the effort at all; I think it’s great. I’m just saying that this isn’t a substitute for Facebook; it’s something different, something more public.

Having captured what it thinks is our identities online, Facebook now wants to be the enabler and controller of our identities. But because we don’t want our stuff on Facebook to be completely public, Facebook cannot be that hub of public identity. The Diaspora Project can. But I wonder whether the Diaspora Project—like ClaimID and OpenID—can succeed because I wonder what our motivation is to keep our identities updated. I have a reason to update Facebook for my friends there or this blog for you all or LinkedIn for my professional contacts or Twitter for my instant ego gratification. But I haven’t had a reason to keep ClaimID (on this page) up to date. That’s the trap the Diaspora Project needs to avoid.

And this is where I think that Leo Laporte and Gina Trapani collaboratively stumbled on a big idea related to identity on the latest This Week in Google. Gina talked about our motive to update Facebook and Leo said the equivalent for identity would come if Google put our profile pages on the top of the search results for our names. If the first result for Leo Laporte in search were Leo Laporte’s profile page, he’d be motivated to keep it up to date, to make it the canonical Leo page. Brilliant, I think. Google, are you listening? Facebook?

* * *

Other notes…. The problem with the launch of Google’s Buzz was related but not so subtle: By mixing our email with its Twitteresque platform, Buzz, Google mixed our private and public. It not only mixed our email connections with the idea of publishing to the world, it also robbed us of the chance to create and control our own publics. In another of its Snuffaluffagus moments, I imagine that Google thought it was doing us a favor by making a public for us: our readymade society. But that was precisely the wrong move, for we want to make and join publics on our own. That is the essence of controlling our worlds.