WEBVTT - how the internet learned to extract 0:00:09.800 --> 0:00:11.920 When was the last time you heard somebody say something 0:00:11.960 --> 0:00:15.080 optimistic about the Internet? All about you? But for me, 0:00:15.520 --> 0:00:18.919 it's been a while, which sucks, because there was a time, 0:00:19.000 --> 0:00:21.240 and I'm talking about the nineties and the two thousands 0:00:21.239 --> 0:00:23.680 and even up into the early twenty tens, when a 0:00:23.680 --> 0:00:26.439 lot of the conversation about the Internet and technology in 0:00:26.520 --> 0:00:28.640 general was really idealistic. 0:00:29.160 --> 0:00:33.360 Basically, what happened to the idea that the Internet was 0:00:33.400 --> 0:00:36.919 this magical network everybody would be able to start their 0:00:36.960 --> 0:00:40.519 own little thing and have pockets of wealth emerged all 0:00:40.560 --> 0:00:43.680 over the country, not to mention make every country into 0:00:43.760 --> 0:00:47.280 a democracy, not to mention make every creative person a star. 0:00:48.400 --> 0:00:51.080 Tim Wu is a legal scholar who writes about monopolies, 0:00:51.240 --> 0:00:53.600 and he is very critical of some of the big 0:00:53.640 --> 0:00:56.800 tech companies like Google and Amazon and Meta, But he 0:00:56.880 --> 0:01:00.600 didn't always feel that way. Back in those early inner days, 0:01:00.840 --> 0:01:03.200 a lot of us really believed that tech was going 0:01:03.240 --> 0:01:04.880 to change the world for the better. 0:01:05.400 --> 0:01:07.240 Actually, at the very late part of that, I was 0:01:07.280 --> 0:01:10.360 working in the Silicon Valley, so I was drinking the kool. 0:01:10.160 --> 0:01:11.880 Aid from the firehose like straight on. 0:01:12.480 --> 0:01:16.520 And before that, I was working in the US government 0:01:16.560 --> 0:01:19.839 at the Supreme Court, my coke clerk. Actually my office 0:01:19.880 --> 0:01:23.560 mate was Ketanji Jackson, who is now the. 0:01:23.000 --> 0:01:24.080 Supreme Court Justice. 0:01:24.120 --> 0:01:28.240 So we were friends, and you know, I got to 0:01:28.280 --> 0:01:31.160 say we were very optimistic, but you know, it didn't 0:01:31.200 --> 0:01:33.440 quite all work out the way we had thought. 0:01:34.600 --> 0:01:38.200 Tim worked in the Biden administration advising on anti trust policies, 0:01:38.400 --> 0:01:41.039 and he's now a law professor at Columbia. His most 0:01:41.120 --> 0:01:43.800 recent project is a quest to understand how the Internet 0:01:43.840 --> 0:01:46.759 went from this utopian vision to something that a lot 0:01:46.760 --> 0:01:49.120 of people blame for everything that's wrong in the world, 0:01:49.440 --> 0:01:51.840 and he wrote a book about it called The Age 0:01:51.880 --> 0:01:54.720 of Extraction. So today's conversation is going to take us 0:01:54.720 --> 0:01:58.320 from Bible versus to rap music, to some Israeli map 0:01:58.400 --> 0:02:01.440 software that you've probably used without even realizing it, to 0:02:01.560 --> 0:02:03.960 that feeling that you get when you smoke way too 0:02:04.040 --> 0:02:06.440 much weed and you can't get up off the couch, 0:02:06.960 --> 0:02:08.960 and hopefully by the end of it, you'll have a 0:02:08.960 --> 0:02:12.120 better idea of what happened to that nineties Internet optimism, 0:02:12.160 --> 0:02:14.880 why it didn't pan out, and maybe some things that 0:02:14.919 --> 0:02:26.359 we could do about it. Right now, I'm afraid Kaleidoscope 0:02:26.400 --> 0:02:33.800 and iHeart podcast this. This is kill Switch I'm Dexter Thomas. 0:02:35.120 --> 0:03:17.960 I'm all right, So, I mean, I think you're talking 0:03:18.000 --> 0:03:21.680 about this kind of stretch from late nineties into the 0:03:21.680 --> 0:03:25.679 early two thousands. I mean, I remember, you know, I'm 0:03:25.680 --> 0:03:29.000 a kid growing up in Sanmadadino, California, but you're not 0:03:29.040 --> 0:03:31.160 familiar with it. It's about an hour east of La 0:03:31.800 --> 0:03:34.880 Nobody really goes there, right, and I'm feeling like, shoot, 0:03:35.520 --> 0:03:39.600 I don't have to leave Sammonddino. Everything I want I 0:03:39.640 --> 0:03:41.520 could find it on the Internet. I could learn to 0:03:41.600 --> 0:03:44.200 do anything. I can connect with anybody. I remember the 0:03:44.240 --> 0:03:46.200 first time I was talking with somebody on aim and 0:03:46.280 --> 0:03:49.680 it was incredible. I can just talk to somebody on 0:03:49.720 --> 0:03:51.800 the other side of the planet for free, you know, 0:03:51.840 --> 0:03:53.720 as long as I pay the dial up bill, right, 0:03:54.200 --> 0:03:57.880 And it seemed like something new was coming out every 0:03:58.000 --> 0:04:02.400 year where I'm going to be able to just do 0:04:02.520 --> 0:04:05.680 things that I never even thought were possible. And there 0:04:05.760 --> 0:04:09.280 was definitely a time where everything felt optimistic, but the 0:04:09.320 --> 0:04:10.920 optimism seemed realistic. 0:04:11.520 --> 0:04:12.160 Yeah it did. 0:04:12.360 --> 0:04:15.920 And you know, even going further back, I grew up 0:04:16.000 --> 0:04:18.040 in a very kind of hippie environment. 0:04:18.360 --> 0:04:19.640 I actually was living in Canada. 0:04:20.000 --> 0:04:22.600 I went to a school where all the grades were 0:04:22.640 --> 0:04:25.839 kind of combined into one. And you know, that was 0:04:25.880 --> 0:04:28.880 its own kind of utopian movement back in the sixties 0:04:28.880 --> 0:04:31.599 and seventies. And I think a lot of us thought 0:04:32.800 --> 0:04:37.800 that the Internet was kind of the instantiation of a 0:04:37.839 --> 0:04:40.400 lot of the ideas from that era. You know, you 0:04:40.440 --> 0:04:42.479 were going to let people connect with each other, and 0:04:42.560 --> 0:04:45.160 as soon as people connected, you know, of course there 0:04:45.200 --> 0:04:48.880 would be peace. Right, all right, all violence and problems 0:04:48.880 --> 0:04:49.840 are misunderstanding. 0:04:49.880 --> 0:04:51.360 All we got to do is just talk to each other. 0:04:51.400 --> 0:04:53.080 Will be good, Yeah, we'll be good. 0:04:53.240 --> 0:04:55.400 I remember a friend of mine said, like, the Internet 0:04:55.480 --> 0:04:58.800 is like Esperanto. Do you know Esperanto the language? 0:04:59.160 --> 0:04:59.480 Yes? 0:05:00.120 --> 0:05:02.800 Oh my gosh, yes, I made the mistake of spending 0:05:02.839 --> 0:05:06.320 about a couple weeks trying to learn Esperanto. Yes, yes, 0:05:06.760 --> 0:05:11.920 but yes, so Esperanto basically the language that the idea was. Listen, 0:05:12.160 --> 0:05:15.840 we need to leave aside all the national languages. We 0:05:15.880 --> 0:05:19.839 create a new language, and that will allow for equality 0:05:19.839 --> 0:05:22.360 because we'll all literally speak the same language, will all 0:05:22.400 --> 0:05:24.680 actually be on the same page. That will lead us 0:05:24.680 --> 0:05:28.040 into this really promising future. And some people really dedicated 0:05:28.080 --> 0:05:28.839 themselves to. 0:05:28.720 --> 0:05:30.440 It entire lives, entire lives. 0:05:30.480 --> 0:05:35.440 And my friend had you know, saw the Internet as Esperanto, 0:05:36.000 --> 0:05:39.560 the successful version, you know, like it had actually eliminated. 0:05:39.600 --> 0:05:41.400 They believed all the. 0:05:41.000 --> 0:05:44.440 Differences between computers and ultimately between us, and you know, 0:05:44.560 --> 0:05:47.800 that was the original idea basically of cyberspace, which was 0:05:47.880 --> 0:05:51.440 like this better world that was the like the Internet, 0:05:51.560 --> 0:05:53.800 no one knows you're a dog era where you're going 0:05:53.839 --> 0:05:57.159 to pretend to be like somebody else, and that would 0:05:57.160 --> 0:05:59.960 be liberating. Maybe I'm just like whoever, I am like 0:06:00.040 --> 0:06:04.080 half Asian dude, but in cyberspace, I don't know, like 0:06:04.160 --> 0:06:06.360 a blue space alien or something. 0:06:06.120 --> 0:06:10.640 Right, and that's a beautiful thing. Yeah right, Okay, Then 0:06:10.760 --> 0:06:14.080 what happened? So as Tim was starting research for his book, 0:06:14.279 --> 0:06:16.960 he looked at Google, not as in he was searching 0:06:17.040 --> 0:06:19.520 up things on the Google search engine. He started looking 0:06:19.560 --> 0:06:22.560 at Google LLC as a source, or at least as 0:06:22.560 --> 0:06:25.960 a symbol of how tech companies went from seemingly visionary 0:06:26.200 --> 0:06:27.960 to obviously exploitative. 0:06:29.000 --> 0:06:32.120 There was Google. It started at a university at Stanford. 0:06:32.320 --> 0:06:35.640 It was originally housed on some random computers. Then it 0:06:35.680 --> 0:06:37.320 was in a garage, so it had all these kind 0:06:37.320 --> 0:06:42.599 of idealistic settings. Their early talk was very idealistic. We 0:06:42.720 --> 0:06:44.440 just want to organize the world's information. 0:06:45.360 --> 0:06:45.840 There was this. 0:06:45.880 --> 0:06:49.320 Idea they had that our main goal is to take 0:06:49.400 --> 0:06:51.600 you where you need to go. We're not going to 0:06:51.680 --> 0:06:54.080 hold on to you. We just want to show you 0:06:54.160 --> 0:06:57.080 the way. Their slogan was don't be evil. 0:06:57.600 --> 0:06:57.920 Yeah. 0:06:58.080 --> 0:07:01.720 I mean I remember being a genuine fan of Google. 0:07:02.760 --> 0:07:05.560 I mean I was like an unplayed employee. Man, Gmail 0:07:05.680 --> 0:07:08.840 came out. I remember having my Gmail invice. You remember 0:07:08.839 --> 0:07:11.560 that where you you They didn't give it to everybody, 0:07:11.680 --> 0:07:13.800 so you had a limited amount of invites. Man, I 0:07:13.920 --> 0:07:16.960 was passing those things out. Every new thing that Google 0:07:17.040 --> 0:07:20.720 came out with. It felt like, I don't want to 0:07:20.720 --> 0:07:23.560 say a utopian future, but it felt like everything was 0:07:23.640 --> 0:07:28.080 going to be interesting and amazing and convenient and helpful. 0:07:28.560 --> 0:07:30.080 I mean, how can you argue against that? 0:07:30.680 --> 0:07:33.600 Yeah? No, I agree, and I shared that feeling. 0:07:34.160 --> 0:07:38.360 I thought there was something very well intentioned about Google, 0:07:38.480 --> 0:07:41.240 the early company. I mean, some of your listeners might 0:07:41.240 --> 0:07:42.960 be like, what are they talking about? 0:07:43.040 --> 0:07:46.040 Who are these Is there something wrong with them? 0:07:47.280 --> 0:07:50.360 Right? But no, I think they're very well intentioned. 0:07:50.520 --> 0:07:53.440 A lot of my friends who were like in another 0:07:53.480 --> 0:07:55.720 era might have gone to work at nonprofits, went to 0:07:55.720 --> 0:07:57.360 go work at Google because. 0:07:57.120 --> 0:07:58.320 They believed in the mission. 0:07:58.360 --> 0:08:01.120 They believed in it, and the early Google, you know, 0:08:01.440 --> 0:08:03.840 didn't have a business model, and then they kind of 0:08:03.880 --> 0:08:07.800 grudgingly took on advertising, but said all the stuff, how, 0:08:07.800 --> 0:08:10.560 we're just gonna be totally different kind of advertising. It's 0:08:10.560 --> 0:08:12.480 gonna be actually stuff you really. 0:08:12.400 --> 0:08:13.880 Want because you're looking for it anyway. 0:08:14.520 --> 0:08:17.360 So it's not gonna be annoying, it's not gonna be cluttery, 0:08:17.680 --> 0:08:19.680 it's not gonna mess with things, you know. 0:08:19.720 --> 0:08:20.560 The founders had. 0:08:20.400 --> 0:08:24.480 Already written a paper where they said that advertising rex search, 0:08:25.120 --> 0:08:27.080 so they were already on record on saying that like 0:08:27.800 --> 0:08:31.760 paid search, where whoever pays most gets the top link, 0:08:32.120 --> 0:08:32.880 is a terrible thing. 0:08:33.520 --> 0:08:36.440 Actually, let's get specific about that paper. It came out 0:08:36.480 --> 0:08:39.280 in nineteen ninety eight and it's titled The Anatomy of 0:08:39.320 --> 0:08:43.800 a large Scale Hypertextual Web Search Engine. And in that paper, 0:08:43.840 --> 0:08:46.880 Sergey Brandon Larry Page, the founders of Google, wrote the 0:08:46.920 --> 0:08:51.200 following quote, the goals of the advertising business model do 0:08:51.320 --> 0:08:55.920 not always correspond to providing quality search to users. And 0:08:56.040 --> 0:08:59.439 later on they say that quote, we expect that advertising 0:08:59.480 --> 0:09:03.280 funded so search engines will be inherently biased towards the 0:09:03.320 --> 0:09:08.360 advertisers and away from the needs of the consumers. End quote. So, 0:09:08.520 --> 0:09:11.520 just to summarize, almost thirty years ago, the founders of 0:09:11.559 --> 0:09:15.680 Google said in public that ads would bias search engines 0:09:15.880 --> 0:09:17.000 and make them worse. 0:09:18.000 --> 0:09:18.800 So what happened. 0:09:19.240 --> 0:09:22.640 So they started making money, and then they made this 0:09:22.760 --> 0:09:25.840 decision in the early two thousands that they were going 0:09:25.920 --> 0:09:26.520 to go public. 0:09:27.000 --> 0:09:29.360 But they had this idea. 0:09:29.360 --> 0:09:32.199 We're going to go public, but we're not going to 0:09:32.280 --> 0:09:33.120 do it like normal. 0:09:33.240 --> 0:09:34.400 We don't want to become evil. 0:09:34.840 --> 0:09:37.559 So they wrote this big, long letter to their shareholders 0:09:37.800 --> 0:09:40.199 and it starts with like, we're. 0:09:40.000 --> 0:09:41.920 Not a normal company. We don't want to be a 0:09:41.920 --> 0:09:42.679 normal company. 0:09:43.080 --> 0:09:45.120 We're going to do all these things that are you're 0:09:45.160 --> 0:09:48.920 going to think are terrible, like crazy projects. We're going 0:09:49.000 --> 0:09:52.120 to care about our users, not our advertisers. Don't be 0:09:52.200 --> 0:09:53.640 evil as our model, on and on and on. 0:09:54.240 --> 0:09:57.120 In that two thousand and four letter, the founders wrote, quote, 0:09:57.320 --> 0:10:00.760 Google is not a conventional company. You do not intend 0:10:00.800 --> 0:10:01.440 to become one. 0:10:02.280 --> 0:10:07.480 But but they still decided to become a regular for 0:10:07.559 --> 0:10:12.360 profit Delaware corporation, which means that they're registered in Delaware, 0:10:12.559 --> 0:10:17.520 which has basically the loosest requirements for a corporation and 0:10:18.000 --> 0:10:20.240 is the standard in corporate America. 0:10:20.840 --> 0:10:24.960 Okay, yeah, standard, that is what conventional companies do. But 0:10:25.040 --> 0:10:29.120 remember Google said they weren't conventional, and as Tim points out, 0:10:29.280 --> 0:10:30.960 it didn't have to go that way. 0:10:31.440 --> 0:10:34.360 They could have maybe done things differently at that point, 0:10:34.440 --> 0:10:37.640 set up something either as a nonprofit if they really 0:10:37.640 --> 0:10:40.840 believe this stuff, they could have been the kind of 0:10:40.880 --> 0:10:45.240 corporation that is not necessarily for profit, what's called a 0:10:45.240 --> 0:10:48.959 B corp, like Pantagonia. But they chose the normal Delaware 0:10:49.480 --> 0:10:53.800 corporate form that every evil corporation in the world has, 0:10:54.240 --> 0:10:58.600 and then you know, over the next ten or fifteen years, 0:10:59.440 --> 0:11:02.679 they proceed to violate it, basically every promise in that letter, 0:11:03.640 --> 0:11:07.680 and right the reason was, I mean, it's so predictable. 0:11:08.440 --> 0:11:15.040 They had pressure to continually increase revenue, and ultimately that 0:11:15.200 --> 0:11:18.319 meant they had, in fact, to treat advertisers better than 0:11:18.360 --> 0:11:20.320 their users. That means they had to have more and 0:11:20.360 --> 0:11:23.200 more and more ads. It means they had to cut 0:11:23.280 --> 0:11:27.320 projects that didn't make sense. I mean, scripture says no 0:11:27.400 --> 0:11:31.439 man can obey two masters, and they believed that they 0:11:31.440 --> 0:11:34.640 were different. I think it's the original sin of Silicon Valley, 0:11:34.640 --> 0:11:38.160 maybe of America, is that we have this belief that 0:11:38.280 --> 0:11:40.560 we can have our cake and eat it too, obey 0:11:40.600 --> 0:11:44.000 the interests of their users and consumers, and also their 0:11:44.160 --> 0:11:46.760 advertisers and also their investors. 0:11:47.559 --> 0:11:50.080 I believe that you're the first person on this show 0:11:50.120 --> 0:11:54.000 to quote the Bible to me. But that's pretty appropriate 0:11:54.360 --> 0:11:57.959 because in some ways, no, for real, it does feel 0:11:58.000 --> 0:12:01.480 like we actually have straight from that light that felt 0:12:01.520 --> 0:12:07.120 really you know, people were truly evangelical about the promises 0:12:07.760 --> 0:12:11.040 of Silicon Valley, the promises of technology, but even specifically 0:12:11.040 --> 0:12:14.400 about companies. I really remember, you know, myself being one 0:12:14.400 --> 0:12:18.400 of them, felt really really optimistic about what Google was 0:12:18.480 --> 0:12:21.360 doing and what Google could do in the future. For 0:12:21.400 --> 0:12:23.960 most of us, though, I feel like they kind of 0:12:23.960 --> 0:12:26.520 fell out of that light for us as a gradual process. 0:12:27.200 --> 0:12:30.679 Most people probably couldn't tell you a time when they 0:12:30.720 --> 0:12:34.760 stopped feeling good about Google. But you have a very 0:12:34.800 --> 0:12:37.480 specific date that you point to in your book that 0:12:37.559 --> 0:12:40.920 you feel like was a specific turning point a day. 0:12:41.720 --> 0:12:42.920 Yes, it's a second. 0:12:42.960 --> 0:12:45.840 The first is the decision become a for profit company. 0:12:46.280 --> 0:12:51.959 The second was June eleventh, twenty thirteen. That's the fall of. 0:12:51.920 --> 0:12:53.120 The early Internet. 0:12:54.720 --> 0:12:57.640 This is where things get interesting for me. The date 0:12:57.679 --> 0:13:00.960 when tim says, the utopian promise of the early Internet 0:13:01.400 --> 0:13:13.280 died forever. We'll get into why after the break. Okay, 0:13:13.360 --> 0:13:16.760 So some background on that date of June eleventh, twenty thirteen. 0:13:17.040 --> 0:13:18.760 So first we actually have to go back to two 0:13:18.760 --> 0:13:21.360 thousand and six to a project made by an Israeli 0:13:21.400 --> 0:13:26.000 programmer called FreeMap Israel. What made this project interesting was 0:13:26.080 --> 0:13:28.120 not only that it was free and it helped you 0:13:28.160 --> 0:13:30.040 with figuring out directions on where you wanted to go, 0:13:30.520 --> 0:13:34.280 but that everything was crowdsourced, even the traffic information, and 0:13:34.440 --> 0:13:37.440 this became its defining feature, and they had the tagline 0:13:37.720 --> 0:13:42.520 out smarting traffic Together. Pretty soon FreeMap Israel had expanded 0:13:42.520 --> 0:13:44.840 globally and had changed their name to something that you 0:13:44.960 --> 0:13:50.640 might recognize, Ways. So Ways got popular pretty quickly because 0:13:50.679 --> 0:13:54.280 of that crowdsourced information. It was genuinely useful. It would 0:13:54.280 --> 0:13:56.720 warn you about an accident nearby or if police were 0:13:56.800 --> 0:13:59.280 up ahead, so you could change your travel route or 0:13:59.320 --> 0:14:01.199 your travels speed accordingly. 0:14:03.120 --> 0:14:07.400 So it was emerging as a challenger to Google Maps. 0:14:07.440 --> 0:14:10.040 And here you had these two kind of I guess 0:14:10.280 --> 0:14:13.840 models of the future. So what happened in twenty thirteen 0:14:14.040 --> 0:14:16.000 in June the contest was. 0:14:16.000 --> 0:14:16.760 About to start. 0:14:17.240 --> 0:14:20.400 It pitted Google, which had a more traditional map program, 0:14:20.640 --> 0:14:23.760 against Ways, which was based on user contributions, and the 0:14:23.800 --> 0:14:27.760 competition was on for the future, and all of a sudden, 0:14:28.160 --> 0:14:29.560 Google just bought Ways. 0:14:30.440 --> 0:14:32.080 At this point in time, on one side, you had 0:14:32.080 --> 0:14:35.240 Google Maps, which said they had a billion users, and 0:14:35.280 --> 0:14:37.880 on the other you had Ways, which was reporting around 0:14:37.920 --> 0:14:41.160 fifty million users. But they were growing and really quickly. 0:14:41.520 --> 0:14:44.120 So Google opened up their wallet, pulled out reportedly about 0:14:44.120 --> 0:14:47.400 a billion dollars, and just bought Ways. They let the 0:14:47.440 --> 0:14:50.400 app itself continue to operate, but some of that really 0:14:50.480 --> 0:14:54.400 valuable data that weays it generated, like that crowdsource traffic information, 0:14:54.960 --> 0:14:58.080 all of that was incorporated up into the new mothership 0:14:58.240 --> 0:14:59.120 of Google Maps. 0:15:00.080 --> 0:15:03.840 They used, you know, frankly, a method pioneered by John Rockefeller, 0:15:03.880 --> 0:15:06.760 which is, if you have problems with the competitor, buy them. 0:15:07.320 --> 0:15:10.560 I remember being pretty shocked that that happened. Now we 0:15:10.840 --> 0:15:14.440 go to the law, which is my particular area of expertise, 0:15:14.960 --> 0:15:19.640 and there is a law called the Clayton Act, you know, 0:15:19.680 --> 0:15:22.680 the anti monopoly law, which says you're not supposed to 0:15:22.720 --> 0:15:26.760 be allowed to merge companies to create a monopoly and 0:15:26.840 --> 0:15:29.120 I think you do not need to be a sophisticated 0:15:29.120 --> 0:15:33.360 economist to say there's two mapping programs, one buys the other, 0:15:33.760 --> 0:15:34.640 that's a monopoly. 0:15:35.320 --> 0:15:37.440 Yeah, pretty cut, dry cut and try. 0:15:38.000 --> 0:15:41.120 So it went to the Federal Trade Commission, which is 0:15:41.160 --> 0:15:44.280 the agency one of the two agencies that tries to 0:15:44.280 --> 0:15:51.080 block illegal mergers, and Federal Trade Commission said, fine, no problem. 0:15:51.880 --> 0:15:54.920 So this is pretty strange. The FDC initially said that 0:15:54.920 --> 0:15:57.240 they were going to look into this acquisition, but a 0:15:57.280 --> 0:16:00.400 couple months later they stopped the investigation and they let 0:16:00.400 --> 0:16:01.560 the purchase go ahead. 0:16:02.160 --> 0:16:03.960 I remember I was had been working there, right, and I 0:16:04.000 --> 0:16:06.280 was like, how did they get to that conclusion? As 0:16:06.280 --> 0:16:09.080 far as I can tell, this looks pretty much like 0:16:09.120 --> 0:16:12.200 a merger of monopoly that that reduced competition. So I 0:16:12.280 --> 0:16:14.280 never I didn't find the answer out to that question 0:16:14.320 --> 0:16:17.920 for many years until one day I was at a 0:16:17.920 --> 0:16:18.920 anti trust party. 0:16:19.920 --> 0:16:20.720 I was hanging out. 0:16:22.800 --> 0:16:25.840 I was trying back up the anti trust party, Like, 0:16:26.040 --> 0:16:28.160 I was, what does the party full invite look like 0:16:28.200 --> 0:16:30.400 for that the anti trust party? We just like pull up, 0:16:30.400 --> 0:16:33.280 we canna talk about anti trust, Like if you like monopolies, 0:16:33.320 --> 0:16:34.320 don't come like what. 0:16:35.120 --> 0:16:39.120 Basically, yeah, okay, it's a thing. 0:16:39.320 --> 0:16:41.600 It's a thing. Invite me next time I'm down. This 0:16:41.640 --> 0:16:42.560 sounds great, you. 0:16:42.440 --> 0:16:45.520 Know, it's like, it's a pretty cool crowd. They're not bad. 0:16:46.240 --> 0:16:49.960 Matt stolers there, Lena Kahn will be there. Like, it's 0:16:49.960 --> 0:16:52.200 a bunch of people. So I was at this party 0:16:52.240 --> 0:16:56.240 and I was having drinks and I realized one of 0:16:56.280 --> 0:16:58.040 the person I was drinking with had worked on that case. 0:16:58.800 --> 0:17:01.720 So it was after a while I was like, so, like, what, 0:17:03.440 --> 0:17:05.920 you know, what went down? How did that happen? And 0:17:05.960 --> 0:17:08.800 she said, well, you know, I know, look kind of bad. 0:17:08.800 --> 0:17:11.640 But the boss said we should let the merger go through. 0:17:12.280 --> 0:17:16.560 And he said, here was his theory that Google is 0:17:16.600 --> 0:17:19.680 what you use when you want to figure out where 0:17:19.720 --> 0:17:23.240 you are, and Ways is what you use when you 0:17:23.320 --> 0:17:24.560 want to figure out where you're going. 0:17:26.200 --> 0:17:28.120 Huh, I'll say it again. 0:17:28.160 --> 0:17:30.119 Google is where you go when you want to figure 0:17:30.119 --> 0:17:32.760 out where you are, and Ways is what you use 0:17:32.760 --> 0:17:34.040 if you want to figure out where you're going. 0:17:34.080 --> 0:17:35.240 So they're not really competing. 0:17:36.200 --> 0:17:41.560 You have just described a map, like the two core 0:17:41.680 --> 0:17:42.679 functions of a map. 0:17:44.200 --> 0:17:48.320 Yeah, so they were not forced to release that reasoning 0:17:48.359 --> 0:17:51.560 to the public, but that's what happened, and the reason 0:17:51.600 --> 0:17:55.760 I pinpoint on that point. I think that point early 0:17:56.000 --> 0:17:58.920 twenty tens is when the Internet really started to turn, 0:17:59.600 --> 0:18:03.159 and it is because the first generation of companies, people 0:18:03.200 --> 0:18:08.200 like Google, started becoming threatening by new guys, not just Ways, Instagram, 0:18:08.520 --> 0:18:11.280 a whole bunch of other companies, and as opposed to 0:18:11.400 --> 0:18:15.160 fighting them, as opposed to competing, they just started buying them. 0:18:15.600 --> 0:18:18.119 We reached out to the FTC for comment on Tim's 0:18:18.119 --> 0:18:21.240 account of this story. As of this recording, we haven't 0:18:21.280 --> 0:18:24.479 heard back. So for a while, this acquisition thing was 0:18:24.520 --> 0:18:27.919 a trend big tech companies would just buy their competition. 0:18:28.480 --> 0:18:30.840 Instagram was starting to become a popular place for people 0:18:30.840 --> 0:18:34.600 to connect online, so Facebook bought them. They also bought WhatsApp. 0:18:34.960 --> 0:18:37.719 Maybe you remember when Zappo's was getting really popular as 0:18:37.760 --> 0:18:40.720 a place to buy shoes online, and then Amazon bought 0:18:40.800 --> 0:18:43.880 them to add to their online shopping empire. They also 0:18:43.880 --> 0:18:47.720 bought Whole Foods. Microsoft picked up LinkedIn and GitHub. The 0:18:47.800 --> 0:18:50.880 next year after getting Ways, Google bought an AI company 0:18:51.000 --> 0:18:54.480 called DeepMind. I could keep going here. Tim worked on 0:18:54.480 --> 0:18:56.520 a study a while back that showed them, between two 0:18:56.560 --> 0:19:00.000 thousand and seven and twenty eighteen, Google and Facebook just betwre. 0:19:00.200 --> 0:19:03.280 The two of them collectively acquired over three hundred and 0:19:03.440 --> 0:19:07.760 fifty companies. The federal government let all those acquisitions go through, 0:19:08.280 --> 0:19:11.920 and that study closes with this line of commentary. As 0:19:11.960 --> 0:19:15.080 with a basketball referee who never calls a foul, the 0:19:15.200 --> 0:19:19.080 question is whether the players have really been faultless, or 0:19:19.119 --> 0:19:24.320 whether the referee is missing something. What might things look 0:19:24.359 --> 0:19:26.159 like if Google had not bought Ways? 0:19:26.920 --> 0:19:30.240 You know, I think that what was lost in that 0:19:30.440 --> 0:19:34.959 acquisition was the chance of a full fledged rival, you know, 0:19:35.040 --> 0:19:39.919 to Google, and another ecosystem, two different, fully functioning ecosystems 0:19:40.359 --> 0:19:43.920 that offered you a real alternative because so much turns 0:19:43.920 --> 0:19:46.760 on maps as sort of a foundation and a good 0:19:46.760 --> 0:19:50.199 search engine, and if you imagine it growing, if you 0:19:50.240 --> 0:19:53.840 imagine it development itself. It also was, as we said, 0:19:53.880 --> 0:19:57.200 this kind of different user based business model, and who 0:19:57.200 --> 0:19:58.280 knows where that would have gone. 0:19:58.680 --> 0:19:59.919 I mean, within the Google War. 0:20:00.720 --> 0:20:05.240 They were supposedly separate, but they were under ultimately the 0:20:05.240 --> 0:20:09.080 command of Google, and ultimately the founders all left and 0:20:09.560 --> 0:20:11.919 expressed extreme disappointment they had ever done this. 0:20:12.520 --> 0:20:15.080 In twenty twenty one, the CEO of Ways from before 0:20:15.119 --> 0:20:18.000 the acquisition left the company. He wrote a blog post 0:20:18.000 --> 0:20:20.600 about why he was leaving, and he also reflected back 0:20:20.640 --> 0:20:22.920 on when he sold to Google back in twenty thirteen, 0:20:23.400 --> 0:20:26.439 and you can tell he regrets it. It almost reads 0:20:26.520 --> 0:20:29.240 is less of a resignation letter than an apology letter 0:20:29.240 --> 0:20:32.320 to society in general. And there's one line that hits 0:20:32.359 --> 0:20:36.320 pretty hard here quote looking back, we could have probably 0:20:36.359 --> 0:20:41.400 grown faster and much more efficiently had we stayed independent, And. 0:20:41.400 --> 0:20:43.080 I think we lost the chance. 0:20:44.080 --> 0:20:48.200 I mean not only through ways, but a million little acquisitions, 0:20:48.840 --> 0:20:53.520 a million different aquihiers of having a truly more decentralized 0:20:53.520 --> 0:20:57.000 economy that was one in which spread a lot more 0:20:57.040 --> 0:20:59.680 wealth to a lot more people. Instead, it has concentrated 0:20:59.680 --> 0:21:01.240 wealth and a very small number of people. 0:21:02.320 --> 0:21:05.840 Acquisitions are just one method of maintaining a monopoly. In 0:21:05.880 --> 0:21:08.240 his book, Tim lays out a bunch of other tactics. 0:21:08.280 --> 0:21:10.960 They're used by tech giants, including Amazon. 0:21:11.560 --> 0:21:17.040 So Amazon Marketplace, I guess fifteen years ago really was 0:21:17.760 --> 0:21:20.120 in some ways carrying out the early dream of the Internet. 0:21:20.359 --> 0:21:23.240 It was making a lot of people rich at the time, 0:21:23.280 --> 0:21:26.919 they charged twenty percent, only twenty percent of fees, and 0:21:26.960 --> 0:21:29.760 then they would ship your products to people, and a 0:21:29.800 --> 0:21:32.320 lot of people started making a lot of money. I 0:21:32.359 --> 0:21:35.840 have in my book stories about like this Indiana barber 0:21:35.920 --> 0:21:39.960 who start selling palmade as a side business and suddenly 0:21:40.000 --> 0:21:43.120 is like making millions of dollars. But then Amazon, once 0:21:43.160 --> 0:21:46.800 it kind of had everybody, It had all the sellers, 0:21:47.200 --> 0:21:50.320 it had the buyers, you know, locked in with Prime 0:21:50.440 --> 0:21:53.120 or whatever, then it just started turning all the knobs. 0:21:54.440 --> 0:21:57.760 They started adding what they called advertising fee for sellers. 0:21:57.840 --> 0:22:00.239 So you know when you search an Amazon on if 0:22:00.240 --> 0:22:02.879 you use Amazon, but you get like, hey, I'm looking 0:22:02.920 --> 0:22:06.520 for slippers, and you get a bunch of sponsored results. Yeah, 0:22:06.640 --> 0:22:10.520 those turned into a huge cash cow for Amazon because 0:22:10.560 --> 0:22:13.200 the sellers bid against each other to get those spots, 0:22:13.880 --> 0:22:16.400 and they don't feel they can sell without them, and 0:22:16.480 --> 0:22:19.320