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Kinda surprised. Google's core business is advertising. Some vertically integrated aux services (like chrome) feel ripe for antitrust, but I wasn't expecting a

Kinda surprised. Google's core business is advertising. Some vertically integrated aux services (like chrome) feel ripe for antitrust, but I wasn't expecting ads themselves. What is Google without ads?

bdcravens 1y ago
("Genius, Billionaire, Playboy, Philanthropist") Everything else. Cloud provider, operating systems, browsers, hosting business apps, phone licenser, Internet provider, smart home manufacturer, and various moonshots. Their ad company is a monopoly because of those other services. Google as an ad company that can't leverage those other lines of business to gain an advantage over other ad companies still has a viable ad business. They can compete on the basis of that lone company's strengths. ("If you're nothing without this suit, then you shouldn't have it")
- internetter 1y ago
  Thanks, I like the last quote. But I'm curious... Would it be preferable to have Google owning all of these services you listed—just not the ad company they depend on, or the inverse—all the companies are spun out? I see your point, but also, if Google continued to own all these other things, it would still be a terrifyingly large spread, no?
  - bdcravens 1y ago
    Large companies, even monopolies, aren't the problem. Unfair leverage to suppress competition is. Those products without the subsidizing revenue of ads, and ads without the information flows of those products, is the goal. Who gets what part of the company is the wrong question to ask. The org chart would get split along those business units. In all likelihood, the company called "Google" would be the software side, since that's where search lives.
    - lanstin 1y ago
      They are a problem in terms of an efficient free market; they make the information flow asymmetrically biased in their favor, and cause higher prices and implicit collusion. That is true even without any intent to harm.
      - bdcravens 1y ago
        Sure, but generally speaking that's an orthogonal to the issue of antitrust. The same could be same of many of the typical "big tech" players, or even some of the YC "winners".
- PaulHoule 1y ago
  Google can afford to lose money on many of those things because of the ad monopoly. (How much is Android worth in that it keeps Apple out of antitrust trouble with iOS? What quid pro quo does that enable?)
tiltowait 1y ago
Being a monopoly, in itself, isn’t illegal. The question is whether the company maintains its monopoly through illegal tactics or leverages that monopoly in illegal manners. (NYT really ought to add “illegal” to their title.)
- dang 1y ago
  The HTML doc title has that wording, so we've swapped out the article title for that. Thanks!
ndiddy 1y ago
The original Google research paper by Brin and Page explicitly points out that a search engine financed by advertising is inherently anti-consumer: > 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 example, in our prototype search engine one of the top results for cellular phone is "The Effect of Cellular Phone Use Upon Driver Attention", a study which explains in great detail the distractions and risk associated with conversing on a cell phone while driving. This search result came up first because of its high importance as judged by the PageRank algorithm, an approximation of citation importance on the web [Page, 98]. It is clear that a search engine which was taking money for showing cellular phone ads would have difficulty justifying the page that our system returned to its paying advertisers. 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. > Since it is very difficult even for experts to evaluate search engines, search engine bias is particularly insidious. A good example was OpenText, which was reported to be selling companies the right to be listed at the top of the search results for particular queries [Marchiori 97]. This type of bias is much more insidious than advertising, because it is not clear who "deserves" to be there, and who is willing to pay money to be listed. This business model resulted in an uproar, and OpenText has ceased to be a viable search engine. But less blatant bias are likely to be tolerated by the market. For example, a search engine could add a small factor to search results from "friendly" companies, and subtract a factor from results from competitors. This type of bias is very difficult to detect but could still have a significant effect on the market. Furthermore, advertising income often provides an incentive to provide poor quality search results. For example, we noticed a major search engine would not return a large airline’s homepage when the airline’s name was given as a query. It so happened that the airline had placed an expensive ad, linked to the query that was its name. A better search engine would not have required this ad, and possibly resulted in the loss of the revenue from the airline to the search engine. In general, it could be argued from the consumer point of view that the better the search engine is, the fewer advertisements will be needed for the consumer to find what they want. This of course erodes the advertising supported business model of the existing search engines. However, there will always be money from advertisers who want a customer to switch products, or have something that is genuinely new. But we believe the issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent and in the academic realm. Kind of funny how they basically predicted Google's degradation years in advance.
nashashmi 1y ago
Google is playing all sides of the dice. They used adsense to enlist publishers. They used adwords to get marketers. They used an ad buying and selling platform to corner the entire ad line. Google bought Doubleclick for $3 Billion. Today it is worth $22 Billion. When Google got into ad-tech, they drifted away from their core market: users. And started to endorse the other side that turned users into products.
- hnfong 1y ago
  IIRC, before Google got into ad-tech, they didn't have a business model. Not sure whether "core market: users" make sense in this context.
  - nashashmi 1y ago
    Their business model was search advertising. And they created many product products from that revenue. They tried to monetize the other products which is why they got into ad tech .
- turtletontine 1y ago
  You’ve nailed the first two stages of enshittification in your story there. Stage 1: bring in users with a genuinely good product they like! Stage 2: once users are locked in, prioritize your business customers (in this case, advertisers) and make things continually worse for your users. But stage 3 is just as crucial: once the advertisers are locked in, make things worse for THEM just for your benefit. That’s how google makes such obscene margins on adverting. Publishers and advertisers would love an alternative - but google has done an excellent job of preventing that through unlawful monopolization tactics. Hence thus case, and why it’s so important.

bdcravens 1y ago

("Genius, Billionaire, Playboy, Philanthropist") Everything else. Cloud provider, operating systems, browsers, hosting business apps, phone licenser, Internet provider, smart home manufacturer, and various moonshots. Their ad company is a monopoly because of those other services. Google as an ad company that can't leverage those other lines of business to gain an advantage over other ad companies still has a viable ad business. They can compete on the basis of that lone company's strengths. ("If you're nothing without this suit, then you shouldn't have it")

internetter 1y ago
Thanks, I like the last quote. But I'm curious... Would it be preferable to have Google owning all of these services you listed—just not the ad company they depend on, or the inverse—all the companies are spun out? I see your point, but also, if Google continued to own all these other things, it would still be a terrifyingly large spread, no?
- bdcravens 1y ago
  Large companies, even monopolies, aren't the problem. Unfair leverage to suppress competition is. Those products without the subsidizing revenue of ads, and ads without the information flows of those products, is the goal. Who gets what part of the company is the wrong question to ask. The org chart would get split along those business units. In all likelihood, the company called "Google" would be the software side, since that's where search lives.
  - lanstin 1y ago
    They are a problem in terms of an efficient free market; they make the information flow asymmetrically biased in their favor, and cause higher prices and implicit collusion. That is true even without any intent to harm.
    - bdcravens 1y ago
      Sure, but generally speaking that's an orthogonal to the issue of antitrust. The same could be same of many of the typical "big tech" players, or even some of the YC "winners".
PaulHoule 1y ago
Google can afford to lose money on many of those things because of the ad monopoly. (How much is Android worth in that it keeps Apple out of antitrust trouble with iOS? What quid pro quo does that enable?)

tiltowait 1y ago

Being a monopoly, in itself, isn’t illegal. The question is whether the company maintains its monopoly through illegal tactics or leverages that monopoly in illegal manners. (NYT really ought to add “illegal” to their title.)

dang 1y ago
The HTML doc title has that wording, so we've swapped out the article title for that. Thanks!

ndiddy 1y ago

The original Google research paper by Brin and Page explicitly points out that a search engine financed by advertising is inherently anti-consumer: > 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 example, in our prototype search engine one of the top results for cellular phone is "The Effect of Cellular Phone Use Upon Driver Attention", a study which explains in great detail the distractions and risk associated with conversing on a cell phone while driving. This search result came up first because of its high importance as judged by the PageRank algorithm, an approximation of citation importance on the web [Page, 98]. It is clear that a search engine which was taking money for showing cellular phone ads would have difficulty justifying the page that our system returned to its paying advertisers. 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. > Since it is very difficult even for experts to evaluate search engines, search engine bias is particularly insidious. A good example was OpenText, which was reported to be selling companies the right to be listed at the top of the search results for particular queries [Marchiori 97]. This type of bias is much more insidious than advertising, because it is not clear who "deserves" to be there, and who is willing to pay money to be listed. This business model resulted in an uproar, and OpenText has ceased to be a viable search engine. But less blatant bias are likely to be tolerated by the market. For example, a search engine could add a small factor to search results from "friendly" companies, and subtract a factor from results from competitors. This type of bias is very difficult to detect but could still have a significant effect on the market. Furthermore, advertising income often provides an incentive to provide poor quality search results. For example, we noticed a major search engine would not return a large airline’s homepage when the airline’s name was given as a query. It so happened that the airline had placed an expensive ad, linked to the query that was its name. A better search engine would not have required this ad, and possibly resulted in the loss of the revenue from the airline to the search engine. In general, it could be argued from the consumer point of view that the better the search engine is, the fewer advertisements will be needed for the consumer to find what they want. This of course erodes the advertising supported business model of the existing search engines. However, there will always be money from advertisers who want a customer to switch products, or have something that is genuinely new. But we believe the issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent and in the academic realm. Kind of funny how they basically predicted Google's degradation years in advance.

nashashmi 1y ago

Google is playing all sides of the dice. They used adsense to enlist publishers. They used adwords to get marketers. They used an ad buying and selling platform to corner the entire ad line. Google bought Doubleclick for $3 Billion. Today it is worth $22 Billion. When Google got into ad-tech, they drifted away from their core market: users. And started to endorse the other side that turned users into products.

hnfong 1y ago
IIRC, before Google got into ad-tech, they didn't have a business model. Not sure whether "core market: users" make sense in this context.
- nashashmi 1y ago
  Their business model was search advertising. And they created many product products from that revenue. They tried to monetize the other products which is why they got into ad tech .
turtletontine 1y ago
You’ve nailed the first two stages of enshittification in your story there. Stage 1: bring in users with a genuinely good product they like! Stage 2: once users are locked in, prioritize your business customers (in this case, advertisers) and make things continually worse for your users. But stage 3 is just as crucial: once the advertisers are locked in, make things worse for THEM just for your benefit. That’s how google makes such obscene margins on adverting. Publishers and advertisers would love an alternative - but google has done an excellent job of preventing that through unlawful monopolization tactics. Hence thus case, and why it’s so important.