My Guardian column this week is a reprise of the discussion here about Google and its size in the market.
Month: September 2008
-
-
Google: Monopoly or marketplace?
Joe Nocera tells a cautionary tale in today’s NY Times about Google’s power in advertising. The man who runs Sourcetool.com complained to the Justice Department after Google found that his site didn’t live up to its standards and raised the rates on him (Google’s way of shooing away sites it doesn’t approve of). The implication is that Google can wield too much power as a monopoly.
But in the Google age, nothing is as it seemed.
I don’t want to be accused of being an apologist for Google (which will happen anyway because my book is admiring) but I can see their stance on Sourcetools. It’s not a splog — the owner puts effort into building a useful directory, Nocera says — but it does look and act like one. Google is trying to protect us from sites — even paying advertisers — that detour and delay us from getting the answer to our question. If I ask for earthmoving machinery, I’d like to get the link straight from my first search (on Google) rather than being directed to Sourcetool, where I’ll take five more links to get a not-very-satisfying list of companies. Google says it always focuses on the end-user.
Nocera and Sourcetool point out, though, that Google holds the power to raise prices and disadvantage sites without explanation or appeal. That raises fears that it can and will act as a monopoly.
Except the issue isn’t that Google is a monopoly. It’s that Google has become the marketplace. It where we all go for information. It’s where advertisers go for us.
It’s no different from a newspaper. Even when there were two papers in towns, one of them was the marketplace for homes, cars and jobs. That allowed the paper to set rates as high as the market could bear, which was very high. Google would say the difference is that it doesn’t set rates, the market does in auctions for keywords. Except in this case, by punishing Sourcetool, Google did set the rate. And it has the power to do that.
craigslist is also no different, except that Craig Newmark set most rates at zero. He’s the marketplace now and now that he has us by the neck, he could raise rates — as eBay did once it dominated the marketplace it created (though that invited competition from Amazon, Etsy, et al).
What it comes down to is trust. Once a service becomes the marketplace, do we trust them not to use that position to gouge us? There really is no alternative. The closest was Yahoo and now even it is coming to Google to sell ads because that will be far more profitable — that is what the Justice Department antitrust division is investigating now.
But if the Feds rule against the Yahoo deal, it is in essence stealing hundreds of millions of dollars not from Google but from Yahoo. It is restricting Yahoo’s access to the marketplace. That would be as unfair as Google unfairly punishing a site that doesn’t meet its standards.
The first obvious solution is transparency. If we all knew Google’s standards and trusted that they were, indeed, looking out for the end-user and if Sourcetool knew Google’s standards and abided by them, that would blunt Sourcetool’s complaint. Indeed, part of its complaint is that it can’t find out the standards. But then here comes the Google age wrinkle: If Google revealed its standards, it would only be feeding the needs of evil spammers, giving them to manual to game the system.
Still, the bigger Google gets, the more trust will be an issue. I think they need to look at alternatives. Why not, for example, establish an appeals panel made up of advertisers and users to adjudicate issues such as Sourcetool? This would require Google to hand down its laws — or more to the point to draft its constitution: the definitions for good sites rather than spam, not in algorithm-busting detail but as high-level goals. But another Google era wrinkle appears: scale. When the web is developing by the minute, it’s impossible — and potentially limiting and dangerous — to write even the broadest definition of what’s good. And your good is not mine.
It’s all about trust. The question will be whether I trust Google or the government or the market more. I’ll take the market first, Google second, government third. If Google uses its power monopolistically and maliciously, I believe it would hurt Google’s business as some painful proportion — not all — of its audience and advertisers look for alternatives and then as entrepreneurs and competitors see the opportunity to meet that need.
The government didn’t need to go after Microsoft. Google has. That it is say, the market created an opening Google is now trying to fill with Docs and now Chrome. The irony here is that Microsoft, so long burned by antitrust harassment, is not empathetic with Google’s possible plight at the hands of the same tormenters but it wants to join in the tormenting. But that’s a different drama.
I’m not sure whether Google was unfair to Sourcetool or not. I don’t think it’s a very good service; I see it as a delay and detour, though not a malicious one. Nocera is sympathetic to Google’s view: “Listening to Google executives explain how the company’s algorithm works, I came away largely convinced that Google was operating in good faith.” But then, we need to ask whether Google used its power well in this matter.
Larry Lessig famous wrote that code is law. Today, Google is law. It is up to Google to convince us — the market — that its law and enforcement of it is just. To do that, it must be as consistent — which gets harder the bigger you are — and open as it can be.
(My Guardian column, up Monday, also touches on another solution: Competition.)
-
The beast
I’m at the Online News Association hearing Tina Brown talk about her Daily Beast. She told me last night it will capture the daily zeitgeist with editors–more than 20 of them–rather than algorithms.
She throws over her past in print. She says it is good to work online in a medium that is “vibrant with life instead of constantly obsessed with fears of its own extinction.”
“Old war stories about the glories of media in the past,” is no longer exciting. “Yes, it was great but hey, it’s over. The tipping point has happened.”
She confesses being new to the web world. She’d never heard the word “wireframe” and says that tech geniuses are in another hemisphere. She recalls having scoops to hold onto in print but that day is over. She is happy not to be boxed in in presentation. She discovers the new world. She’s a convert.
She discovers “citizen journalism” as well but she cites big media efforts to get contributions rather than citizens’ enterprises. It’s a paragraph taken from some speech in 2004.
Now she gets to her pitch. Wind up: “People seeking to be informed are becoming increasingly overwhelmed.” Cue the stats about how many blogs and YouTube videos there are. She said that at the Democratic convention, everybody was filming everybody else: “a hall of mirrors.” Now she quotes Nick Davis bemoaning “churnalism.” Methinks she’ll cure.
She says we fear we’re going to miss that special moment of news. She says there’s so much we can’t believe: splogs, flogs, and misinformation. “That’s the part that scares me the most.”
Tina to the rescue. “What can we do to cut thorugh all this static, fake stuff, and noise…. There’s nothing wrong with algorithms. They’re fantastic…. It is the time for editors to reassert themselves ot curate in a more rigorous way.
Forward to the past. She praises other aggregators — Real Clear Politics, HuffPo, Arts & Letters Daily — “but there is still room, I think, for more metaaggregation with a distinctive voice just as there was always room for another magazine with a distinctive point of view.”
She says they started development eight weeks ago and hope to be up in the early fall. The launch will be evolutionary, she says, with new features up every 4-6 weeks.
She offers a site for “the news junkie who wants a speedy scan of the zeitgeist.”
She says her job as an editor was the write clever billings and headlines to get readers to read stories they wouldn’t otherwise read. The first duty of the journalist whether in print or online or no TV is to attract interest, she says. The next is to bring skepticism.
One underestimates Brown at one’s peril. From the sound of it, it’s magazine-think to the web, editing the world. For the proof, I’ll await the pudding.
In questions, she says she wants people who will forego the wisdom of the crowd to have their own take.
She says “there has to be pushback” against big-media companies hiring young people without experience and making writers put out too much. “It will indeed destroy their brands.”
It’s all very magazinethink.
“I think this period where anybody thought that anybody could write a posting for a venerable brand is a terrible mistake…. There hasn’t been enough pushback from the creative world…. The great con of the 20th and 21st century is the way that talent has been exploited by this technology boom….”
A journalism student asks for advice. She’s a print student but she’ll take a job in print, online, anything. “Well, you’re an easy lay, aren’t you,” says Tina, who advises not to go to a big company like Time Inc, where “you’ll be making big-media slugs coffee all day long.”
One person from the audience tries to hear more about her business plan. Tina won’t talk about it. Another tries to get her to talk about her video strategy. She won’t talk about it, saying she doesn’t want to give Forbes any ideas I get up and ask her to give us some idea of what the Daily Beast will be and she cuts me off and she she won’t talk about it. “I don’t want to give a press conference about The Daily Beast.”
As I sit down, the friend next to me says, “She’s a tough lay.”
-
Another 9/11
For the first time, I decided not to go to the World Trade Center site on today’s anniversary. My wife has wondered for years why I insisted on going. I said it was to pay respect and my thanks. It is my unfuneral.
But this year the hole is, at long last — too long — filling up. This year, the place will be used to score political points — at least it will be in a fair and balanced way. This year, I’m busy with life.
And this year, I’m angry. Every year, the emotion is different. I take my own pulse on the day. That emotion is a bit more self-centered this year, probably because I’m upset that the health condition that came out of 9/11 for me continues (though I’m fine). Last night, because of the condition, I got screwed by an insurance company, which also brought forward the life-passing-before-eyes moment of seven years ago. It’s making 9/11 seem like Groundhog Day. It won’t go away.
It’s vital that we remember. That is why I went to the site for six years. But there’s no forgetting.
-
The start of reverse syndication (and end of the AP?)
New Jersey’s Star-Ledger today put out an entire edition without anything from the Associated Press within. The sharp-eyed reader will notice lots of local news by staff plus articles from other papers–Washington Post, LA Times, McClatchy, the Glouceseter County Times–and content from online services such as Sportsticker.
It’s one more nail in the heart of the AP as other papers cancel their contracts and more threaten to.
At the same time, Political announces that it will give stories to papers with ads attached that Politico and Addify sell and they will share revenue with the papers. Politico’s deal is the first major substantiation of the reverse-syndication model, a product of the link economy. It’s another nail in the heart of the Associated Press, which is built instead for the content economy.
The old syndication model in the old content economy just won’t work today when all the world needs is one copy of a story up in the cloud with links to it. Today, the more links that article can get, the more valuable it is. So sharing value with those who send links to it only makes sense.
The AP is not bad (no matter what foolish things it may have done in the blog kerfuffle recently). It’s just expensive. Papers the size of the Cleveland Plain Dealer say they pay $1 million a year. As they get more local, as reverse syndiction models come to the fore, as they have to tighten budgets, the industry-supported AP syndication model is mortally threatened. Still, this isn’t about the AP. It’s about the new architecture of news and media.