Chapter 12. The Dominant Power in the Industry?
It's Google's world. We just live in it.[]
—Chris Tolles, vice president of marketing, Topix Inc.
I think, therefore I Google.[]
—David Smith, columnist, The Guardian
Blogger Paul Ford published an article anticipating the future: "How Google Beat Amazon and eBay to the Semantic Web." He illustrated the story with a rough-cut cartoon of a giant robot standing on the globe and declaring, "I am Googlebot, I control Earth." Most readers saw the cartoon as a slap at Google, except for those who worked at Google. They contacted Ford requesting that they be allowed to put the doodle on t-shirts. Ford said no, but the cartoon popped up on walls, bulletin boards, and desks all over Google offices.[]
Sounds like Google is full of itself, doesn't it? A generous amount of hubris is essential to being a Silicon Valley leader. "There is a certain 'we can do this' arrogance in Silicon Valley," admits Marc Tarpenning, software engineer and one of the founders of Tesla Motors. "But all entrepreneurs need a bit of that because if you really understood how difficult this stuff is, you would just never do it."[]
While it is obvious that Google rules the kingdom of search, even the experts can't get a handle on the ramifications of Google's dominance. BusinessWeek wrote in 2007 that the company's data-gathering capability worries many people. Technology historian George Dyson, who wrote Darwin Among the Machines: The Evolution of Global Intelligence, believes Google could pose a national defense problem simply by virtue of its huge warehouse of data.
"That much money and power concentrated in one place can be dangerous," says Dyson, who sometimes advises the Defense Department on potential threats. While he doesn't think Google yet represents such a menace, he raises a more obvious concern: Google's vast network, now a substantial piece of the Internet itself, is "very quickly becoming vital national security infrastructure." Should anything happen to the company, he says, through market forces, terrorist attacks on server farms, or something else, that could compromise national defense.[]
Esther Dyson, a venture capitalist who has a close relationship with Google, wrote:
The danger lies in the concentration of information—arguably a concentration of power—that Google represents. Google doesn't merely point users to existing information on the Web; it also collects information that it doesn't share about its users' behavior. If you can use patterns in Google searches to track flu outbreaks and predict a movie's commercial prospects, can you also use it to forecast market movements or even revolutions?[]
Or even how to manipulate and influence searchers to think and act in certain ways? The thing about Google is most people don't realize how much it knows about them and how readily it can tailor response, information, advertisements, and so on, to sway their thinking. The very nature of propaganda and influence is that people tend to be unaware of how they are being worked over.
Google appears to be an unstoppable online giant, capable of growing at the same speed that the Internet grows. On a corporate level, Google challenges everyone even remotely near it. In 2008, it came out with the GPhone to confront Apple's iPhone, and Chrome to defy Microsoft, and then launched Knol, a peer-reviewed encyclopedia to undercut Wikipedia.
Andy Grove, former CEO of Intel, described Google as a company "on steroids, with a finger in every industry."
"Microsoft's power," Grove observed, "was intra-industry, Google's power is shaping what's happening to other industries."[]
Google's Marissa Mayer insists the company's power is legitimate and well-deserved: "Our influence comes from the end-users and the trust that we've built with them. If we stop putting their needs first, that will stop."[]
Esther Dyson agreed, arguing that people are always free to use another search engine if they think something unhealthy is going on. Dyson concluded,
A Google that is accountable to its users—searchers, advertisers, investors, and governments—is likely to be a better outfit that does more good in today's relatively open market. In short, there is no regulatory system that I trust more than the current messy world of conflicting interests. Whatever short-term temptations it faces—to manipulate its search results, use private information, or throw its weight around—Google, it is clear, could lose a lot by succumbing to them in a world where its every move is watched.[]
Dyson's reasoning is similar to comments regarding the credit and financial services industries prior to their 2008 catastrophes. In other words, she was saying the market, competitors, and customers keep the system honest and efficient. The recent failure of that concept convinced most Americans that while a free-market system has a crucial creativity and energy, every industry needs some guiding principles and oversight.
Even though most curbs to Google's power have come from the courts, it has been disciplined by the free-market system.
Each year, thousands of eBay enthusiasts trek to Boston for the online consignment store's sellers' convention. In 2007, Google showed up, too, staging a "Let Freedom Ring" party to protest eBay's refusal to let merchants use Google Checkout. "We were not pleased by this notion of the Google Checkout party and the marketing around it, I will tell you that," said eBay CEO Meg Whitman.[]
Checkout is a direct competitor with eBay's payment system, PayPal, which eBay acquired in 2002. PayPal is by far the online payment leader, with more than 143 million user accounts worldwide. A gem of an acquisition, PayPal has been growing faster than eBay's core auction and shopping business. Rajiv Dutta, who oversees PayPal, said, "I am convinced PayPal is one day going to be bigger than eBay."[]
"We're defending ourselves aggressively with PayPal," Whitman said. "That is one of our core businesses. We're not going to let that go away to someone who'd kind of like to be in the business."[]
As it happens, eBay also is among Google's largest advertisers, spending tens of millions of dollars a year on keyword advertising. Whitman promptly canceled all of its U.S. Google ads for more than a week. Google got the message and canceled its "freedom" party just as promptly.