1 00:00:02,520 --> 00:00:07,000 Speaker 1: All Zone Media. Hello and welcome to Better Offline and 2 00:00:07,080 --> 00:00:21,159 Speaker 1: of course I'm your host, head Zeitron. Before we go 3 00:00:21,200 --> 00:00:23,720 Speaker 1: any further, as a reminder, check out the show notes 4 00:00:23,720 --> 00:00:26,080 Speaker 1: for links to back up everything I'm saying. I'm not 5 00:00:26,120 --> 00:00:30,080 Speaker 1: creative enough to make this stuff up. It's real, I promise. Anyway, 6 00:00:30,720 --> 00:00:33,320 Speaker 1: the start of August felt kind of surreal for the 7 00:00:33,320 --> 00:00:36,480 Speaker 1: first time since jack GBT launched in November twenty twenty two. 8 00:00:36,720 --> 00:00:39,159 Speaker 1: There were signs that the markets were finally starting to 9 00:00:39,200 --> 00:00:42,040 Speaker 1: wake up to the bullshit of generative AI and kind 10 00:00:42,080 --> 00:00:45,800 Speaker 1: of seeing that it wasn't making anyone money really, you know, 11 00:00:45,880 --> 00:00:47,839 Speaker 1: the very obvious thing that some of us have been 12 00:00:47,880 --> 00:00:51,640 Speaker 1: saying for quite some time. Anyway, though, it was remarkable, 13 00:00:52,360 --> 00:00:54,840 Speaker 1: but not as remarkable as what happened in August fifth, 14 00:00:55,040 --> 00:00:57,640 Speaker 1: when a federal judge delivered his ruling in an antitrust 15 00:00:57,680 --> 00:01:01,240 Speaker 1: case filed against Google by the US Department of Justice. 16 00:01:01,280 --> 00:01:04,440 Speaker 1: In three hundred pages of dense legal text, Judge Amitt 17 00:01:04,520 --> 00:01:08,240 Speaker 1: Meta confirmed an excruciating detail that lengthened the breadth of 18 00:01:08,280 --> 00:01:11,240 Speaker 1: what all of us Gander's sort of new. The Google 19 00:01:11,240 --> 00:01:14,640 Speaker 1: has a monopoly in search and online general text advertising. 20 00:01:14,680 --> 00:01:18,840 Speaker 1: And that's a specific term of art. For many reasons, 21 00:01:19,160 --> 00:01:22,399 Speaker 1: this ruling was a humiliating one for Google, not least 22 00:01:22,440 --> 00:01:25,080 Speaker 1: because it showed the sordid, nasty little details of how 23 00:01:25,080 --> 00:01:28,440 Speaker 1: it's maintained its market dominance and actively impeded any chance 24 00:01:28,480 --> 00:01:32,600 Speaker 1: of fair competition in the search market. Documents obtained through 25 00:01:32,600 --> 00:01:35,960 Speaker 1: discovery revealed the incredible amounts of money that Google's been 26 00:01:36,000 --> 00:01:39,840 Speaker 1: paying companies. They paid Samsung eight billion dollars over four 27 00:01:39,920 --> 00:01:42,800 Speaker 1: years and Apple twenty billion dollars in twenty twenty two 28 00:01:42,800 --> 00:01:45,760 Speaker 1: alone to remain the fault search engine on their devices, 29 00:01:45,920 --> 00:01:48,440 Speaker 1: as well as Mozilla that makes the Firefox browser. They 30 00:01:48,480 --> 00:01:51,560 Speaker 1: pay about half a billion dollars a year. To be clear, 31 00:01:52,240 --> 00:01:54,880 Speaker 1: this is one of the grizzlier puts. Mozilla is an 32 00:01:54,960 --> 00:01:57,240 Speaker 1: organization I actually admire and they do a lot of 33 00:01:57,240 --> 00:02:00,600 Speaker 1: cool stuff technologically, but it also kind of revealed how 34 00:02:00,600 --> 00:02:04,040 Speaker 1: dependent they are on Google's money to stay afloat. Anyway, 35 00:02:04,640 --> 00:02:07,200 Speaker 1: Judge Meta found that Google had violated the Sherman Act, 36 00:02:07,520 --> 00:02:10,919 Speaker 1: a century old Dante trust legislation that, among other things, 37 00:02:11,000 --> 00:02:13,239 Speaker 1: led to the breakup of Standard Oil in nineteen ten, 38 00:02:13,400 --> 00:02:15,160 Speaker 1: as well as the breakup of AT and T in 39 00:02:15,280 --> 00:02:19,040 Speaker 1: nineteen eighty two. This is a significant moment in Silicon 40 00:02:19,120 --> 00:02:23,200 Speaker 1: Valley history, and it's an existential threat to Google. While 41 00:02:23,200 --> 00:02:26,120 Speaker 1: Google's initial success came thanks to it being actually better 42 00:02:26,200 --> 00:02:27,080 Speaker 1: than the alternatives. 43 00:02:27,200 --> 00:02:29,480 Speaker 2: Anyone remember alta Vista? How do this? You see this? 44 00:02:30,160 --> 00:02:34,119 Speaker 1: Google's continued existence is largely thanks to various interconnected monopolies 45 00:02:34,120 --> 00:02:37,400 Speaker 1: it's established, creating a choke hold on Well Search and 46 00:02:37,600 --> 00:02:41,560 Speaker 1: I'd argue the web at large. Over half of Google's 47 00:02:41,600 --> 00:02:44,280 Speaker 1: yearly revenue comes from Google Search, over one hundred and 48 00:02:44,280 --> 00:02:46,840 Speaker 1: seventy five billion of the three hundred or so billion 49 00:02:46,880 --> 00:02:49,280 Speaker 1: that Google makes every year. And it's hard to imagine 50 00:02:49,320 --> 00:02:52,720 Speaker 1: that Google could sustain said revenue or its dominance without 51 00:02:52,720 --> 00:02:56,000 Speaker 1: paying billions of dollars to starve the competition, and indeed, 52 00:02:56,040 --> 00:02:59,520 Speaker 1: this ruling kind of proves that they can't. As I mentioned, 53 00:02:59,560 --> 00:03:01,880 Speaker 1: the Sherman Act is roughly one hundred and thirty years old, 54 00:03:01,919 --> 00:03:04,840 Speaker 1: and since its creation, it's unwoven some of the America's 55 00:03:04,919 --> 00:03:07,919 Speaker 1: most intractable monopoly players, single handedly ruining the days of 56 00:03:07,960 --> 00:03:11,840 Speaker 1: oil company CEOs and rail barons alike. It's robust, powerful, 57 00:03:12,240 --> 00:03:14,880 Speaker 1: and it's a really good piece of legislation which in 58 00:03:14,919 --> 00:03:17,360 Speaker 1: the decades since its creation, has been augmented with new 59 00:03:17,440 --> 00:03:21,799 Speaker 1: laws to cover the blind spots missed by the original authors. Problematically, 60 00:03:22,000 --> 00:03:25,800 Speaker 1: the Reagan administration kind of detoothed it by refusing to 61 00:03:26,080 --> 00:03:28,320 Speaker 1: actually enforce it. You heard a little of that from 62 00:03:28,360 --> 00:03:32,120 Speaker 1: Matt Stoler's interview from last episode. But crucially, the Sherman 63 00:03:32,200 --> 00:03:35,360 Speaker 1: Act has teeth. It contains provisions that allow judges to 64 00:03:35,440 --> 00:03:38,920 Speaker 1: levy big fines, impose criminal penalties on CEOs or anyone 65 00:03:39,000 --> 00:03:42,440 Speaker 1: else involved, and those penalties can be about a decade long. 66 00:03:42,720 --> 00:03:45,360 Speaker 1: They can also order companies to perform specific actions like 67 00:03:45,440 --> 00:03:49,600 Speaker 1: divesting a business unit to remedy the situation. It's good shit, 68 00:03:49,760 --> 00:03:52,640 Speaker 1: and it's exactly what we need. Well, I don't think 69 00:03:52,640 --> 00:03:55,600 Speaker 1: that Sundar Pashai is going to prison, which would be very, 70 00:03:55,720 --> 00:03:59,200 Speaker 1: very funny, mostly because hardly anyone ever actually gets prosecuted 71 00:03:59,240 --> 00:04:01,440 Speaker 1: for violating the shit German Act. I do think this 72 00:04:01,560 --> 00:04:05,040 Speaker 1: ruling has the potential to kill Google, at least the 73 00:04:05,120 --> 00:04:07,560 Speaker 1: current Google that we see today, this present form of 74 00:04:07,600 --> 00:04:10,400 Speaker 1: this company that bankrolls its other entities using a crooked 75 00:04:10,480 --> 00:04:14,320 Speaker 1: monopoly over the search market. And in this two part series, 76 00:04:14,360 --> 00:04:16,320 Speaker 1: I'm going to take a look at how Google created 77 00:04:16,360 --> 00:04:18,599 Speaker 1: its monopoly and how that monopoly allowed it to. 78 00:04:18,600 --> 00:04:19,960 Speaker 2: Become fabulously rich. 79 00:04:20,480 --> 00:04:22,960 Speaker 1: I'll also talk about what might happen next, which for 80 00:04:23,040 --> 00:04:25,960 Speaker 1: the most part, will involve a mixture of history, lessons 81 00:04:25,960 --> 00:04:29,520 Speaker 1: and a healthy dash of bullshit speculation. Ah, I'm kidding, 82 00:04:29,520 --> 00:04:33,240 Speaker 1: it will actually be good, but trust me, even the 83 00:04:33,240 --> 00:04:37,960 Speaker 1: best case scenario for Google here is fairly grim. You 84 00:04:38,040 --> 00:04:40,719 Speaker 1: may also wonder why I've been going on about monopolies 85 00:04:40,760 --> 00:04:44,720 Speaker 1: for weeks, and I really want you to understand. Monopolies 86 00:04:44,720 --> 00:04:46,960 Speaker 1: are a big part of why everything feels like it 87 00:04:47,040 --> 00:04:51,080 Speaker 1: stopped working. So many problems in the modern tech industry 88 00:04:51,080 --> 00:04:53,640 Speaker 1: are a result of a lack of competition, of monopolies 89 00:04:53,640 --> 00:04:56,560 Speaker 1: and oligopolies that change the incentive of a company from 90 00:04:56,600 --> 00:04:59,760 Speaker 1: selling you a service, you a customer who likes the service, 91 00:04:59,800 --> 00:05:02,440 Speaker 1: and for it to extracting as much value from you 92 00:05:02,480 --> 00:05:04,919 Speaker 1: as possible because you have nowhere else to go or 93 00:05:05,120 --> 00:05:09,360 Speaker 1: leaving is difficult. Competition is deeply important. After all, if 94 00:05:09,360 --> 00:05:11,520 Speaker 1: you're not worried about the competition, why would you worry 95 00:05:11,560 --> 00:05:15,480 Speaker 1: about your customers leaving? The incentives of the monopolist are 96 00:05:15,480 --> 00:05:20,960 Speaker 1: inherently degenerative. Monopolists are not concerned about building better products. No, 97 00:05:21,279 --> 00:05:24,880 Speaker 1: they're concerned about squeezing their captive audience as much as possible. 98 00:05:26,040 --> 00:05:28,240 Speaker 1: The documents I covered back in April in The Man 99 00:05:28,279 --> 00:05:30,880 Speaker 1: Who destroyed Google Search are a great example showing how 100 00:05:30,920 --> 00:05:34,400 Speaker 1: Prabagar Ragavan god I love saying his name. The former 101 00:05:34,440 --> 00:05:37,320 Speaker 1: head of ads at Google demanded an increase in queries, 102 00:05:37,560 --> 00:05:40,400 Speaker 1: meaning more searches rather than better results, as a means 103 00:05:40,400 --> 00:05:42,719 Speaker 1: of increasing the amount of time one would spend on Google, 104 00:05:42,760 --> 00:05:45,480 Speaker 1: which in turn would allow Google to show you more ads. 105 00:05:47,240 --> 00:05:50,160 Speaker 1: However you feel about capitalism, a better economy is one 106 00:05:50,200 --> 00:05:55,200 Speaker 1: where actual, real competition between businesses exists, one based on 107 00:05:55,320 --> 00:05:59,440 Speaker 1: their ability to meet customers' needs. This stuff feels very obvious, 108 00:06:00,040 --> 00:06:03,640 Speaker 1: but it needs repeating. A company that fears the competition 109 00:06:03,760 --> 00:06:06,719 Speaker 1: is one that will compete to win a customer's business 110 00:06:06,720 --> 00:06:09,480 Speaker 1: and heart. And conversely, a company that has no real 111 00:06:09,520 --> 00:06:12,640 Speaker 1: fear of losing customers because they've dominated the market with 112 00:06:12,960 --> 00:06:15,960 Speaker 1: say a monopoly, or set up a healthy cartel of friendly, 113 00:06:16,000 --> 00:06:20,920 Speaker 1: other bigger quote competitors where newcomers are effectively chased out. Yeah, 114 00:06:21,600 --> 00:06:23,760 Speaker 1: they can make their products worse without fear that customers 115 00:06:23,839 --> 00:06:27,479 Speaker 1: might do something annoying like choose another option. You see 116 00:06:27,480 --> 00:06:31,000 Speaker 1: a lot of it outside of tech two. Ticketmaster and 117 00:06:31,040 --> 00:06:33,760 Speaker 1: its associated properties have dominated live events to the point 118 00:06:33,760 --> 00:06:36,880 Speaker 1: that they control both on sale tickets and the resale market, 119 00:06:37,200 --> 00:06:41,120 Speaker 1: leading to things like their horrifying Platinum Seats deal, where 120 00:06:41,120 --> 00:06:44,359 Speaker 1: Ticketmaster reserves tickets so that it can sell them for 121 00:06:44,440 --> 00:06:47,159 Speaker 1: a higher price to fans that couldn't buy them the 122 00:06:47,200 --> 00:06:50,760 Speaker 1: normal way, which Ticketmaster also runs. And that's why the 123 00:06:50,800 --> 00:06:53,840 Speaker 1: Department of Justice is suing them, and they suit them 124 00:06:53,880 --> 00:06:56,839 Speaker 1: in May for their monopoly. I wish the executives at 125 00:06:56,839 --> 00:07:01,200 Speaker 1: Ticketmaster nothing but the worst. Four companies control eighty percent 126 00:07:01,240 --> 00:07:04,560 Speaker 1: of US air travel after decades of acquisitions, allowing them 127 00:07:04,560 --> 00:07:06,880 Speaker 1: to effectively charge whatever they want, and because there are 128 00:07:06,960 --> 00:07:09,240 Speaker 1: so few of them, they'll pretty much keep their prices 129 00:07:09,279 --> 00:07:12,960 Speaker 1: around the same amount. It's a fake competition and a 130 00:07:13,000 --> 00:07:16,680 Speaker 1: fake competitive environment, and it's bad for customers and it's disgusting. 131 00:07:18,000 --> 00:07:20,520 Speaker 1: Now you may think, ah, I got really shitty internet speed, 132 00:07:20,560 --> 00:07:22,800 Speaker 1: and whenever I call customer service, they don't seem to 133 00:07:22,800 --> 00:07:26,000 Speaker 1: pick up. And that's because most Americans have no real 134 00:07:26,120 --> 00:07:29,200 Speaker 1: choice in internet providers thanks to monopolies run by companies 135 00:07:29,240 --> 00:07:32,640 Speaker 1: like Comcast, Charter Central, Lincoln, Cox, who can charge what 136 00:07:32,760 --> 00:07:36,440 Speaker 1: they want, perform a fairly mediocre standard, and effectively abandoned 137 00:07:36,520 --> 00:07:40,840 Speaker 1: less profitable rural areas, discarding some to ultraslow DSL Internet 138 00:07:40,880 --> 00:07:43,720 Speaker 1: that many of you probably have not used in decades, 139 00:07:44,920 --> 00:07:47,920 Speaker 1: and one of my favorite ones are the real fuck nuts. 140 00:07:47,920 --> 00:07:51,800 Speaker 1: The scumbags are at Frontier Frontier Communications, which is partly 141 00:07:51,800 --> 00:07:54,720 Speaker 1: owned by a private equity firm called Cerebrous Capital Management, 142 00:07:54,880 --> 00:07:58,320 Speaker 1: which owns part of Albertson's, a grocery store that's currently 143 00:07:58,320 --> 00:08:00,320 Speaker 1: in the midst of a battle with the FDC over 144 00:08:00,360 --> 00:08:03,000 Speaker 1: a larger chain called Kroger's trying to buy them, with 145 00:08:03,080 --> 00:08:06,160 Speaker 1: the FTC correctly arguing that it would eliminate competition and 146 00:08:06,200 --> 00:08:10,520 Speaker 1: allow one firm to control grocery prices. Hey, that reminds 147 00:08:10,520 --> 00:08:15,520 Speaker 1: me of something. You remember when inflation was increasing prices everywhere. Yeah, 148 00:08:15,800 --> 00:08:18,840 Speaker 1: if you'd like a journalist who was writing, actually, it's 149 00:08:19,000 --> 00:08:21,240 Speaker 1: it's nothing to do with the companies. You're fucking wrong. 150 00:08:21,320 --> 00:08:23,000 Speaker 1: You were wrong at the time, and you should not 151 00:08:23,120 --> 00:08:27,360 Speaker 1: write anymore. It's disgusting. What actually happened was the increasingly 152 00:08:27,480 --> 00:08:30,640 Speaker 1: dwindling amount of competition in many consumer goods companies allowed 153 00:08:30,640 --> 00:08:33,520 Speaker 1: them to all raise their prices at once, gouging customers 154 00:08:33,520 --> 00:08:34,959 Speaker 1: in a way that should have had someone sent to 155 00:08:35,040 --> 00:08:39,440 Speaker 1: jail rather than make nineteen million dollars for CEOs that 156 00:08:39,480 --> 00:08:43,360 Speaker 1: were bleeding Americans dry. It's also much much easier for 157 00:08:43,400 --> 00:08:45,920 Speaker 1: a tech company to establish a monopoly because they often 158 00:08:45,960 --> 00:08:49,119 Speaker 1: do so nestled in their own platforms, making the monopolies 159 00:08:49,200 --> 00:08:51,080 Speaker 1: just a little bit harder to pull apart. Without a 160 00:08:51,080 --> 00:08:56,760 Speaker 1: three hundred page legal document. One can easily say, if 161 00:08:56,800 --> 00:08:59,080 Speaker 1: you own all the grocery stores in an area, that 162 00:08:59,160 --> 00:09:01,480 Speaker 1: means you can control the price of groceries. That one's 163 00:09:01,520 --> 00:09:03,720 Speaker 1: a bit more obvious, but it's a little harder to 164 00:09:03,760 --> 00:09:06,640 Speaker 1: point at the problem with the tech industry because said 165 00:09:06,720 --> 00:09:09,880 Speaker 1: monopolies are. They're pretty new and different, yet mostly come 166 00:09:09,960 --> 00:09:12,400 Speaker 1: down to owning on some level both the customer and 167 00:09:12,440 --> 00:09:16,160 Speaker 1: those selling to the customer. There are no alternatives. 168 00:09:17,320 --> 00:09:19,000 Speaker 2: This is a fairly. 169 00:09:18,720 --> 00:09:21,839 Speaker 1: Basic part of all commerce. One cannot have a lawyer 170 00:09:21,880 --> 00:09:24,840 Speaker 1: represent both sides, and one ideally should not have the 171 00:09:24,880 --> 00:09:27,120 Speaker 1: same agent represent both the buyer and the seller of 172 00:09:27,160 --> 00:09:30,320 Speaker 1: a house, which does happen in some states, which is insane. 173 00:09:31,000 --> 00:09:33,080 Speaker 1: And yet it's these conflicts of interest that the tech 174 00:09:33,120 --> 00:09:35,560 Speaker 1: industry has made billions of dollars off of and I'd 175 00:09:35,640 --> 00:09:39,400 Speaker 1: argue that they can't operate without metas monopoly over the 176 00:09:39,400 --> 00:09:42,040 Speaker 1: advertising on both Instagram and Facebook, as well as its 177 00:09:42,080 --> 00:09:45,360 Speaker 1: own black box algorithms allow it to make the products 178 00:09:45,400 --> 00:09:48,520 Speaker 1: that you use every day so much worse just to 179 00:09:48,600 --> 00:09:51,560 Speaker 1: show you more ads, and they can increase advertising prices 180 00:09:51,600 --> 00:09:54,920 Speaker 1: whenever they want something they've done multiple times without anybody 181 00:09:54,960 --> 00:09:57,920 Speaker 1: really covering it. As a result, Meta is also the 182 00:09:57,960 --> 00:10:01,480 Speaker 1: only source of truth for houses successful your advertising is, 183 00:10:01,679 --> 00:10:04,080 Speaker 1: to the point that it tricked the entire media industry 184 00:10:04,200 --> 00:10:07,320 Speaker 1: into pivoting to video using phony numbers. Hundreds of people 185 00:10:07,320 --> 00:10:11,520 Speaker 1: lost their jobs. Nothing happened to Meta. Meta, as with 186 00:10:11,600 --> 00:10:14,800 Speaker 1: any digital advertising monopolist, can basically say whatever it wants 187 00:10:14,840 --> 00:10:17,439 Speaker 1: to you, inflating stats where they need to as a 188 00:10:17,480 --> 00:10:19,199 Speaker 1: means of getting more money out of you, which is 189 00:10:19,240 --> 00:10:21,640 Speaker 1: why there is a seven billion dollar class action suit 190 00:10:21,640 --> 00:10:25,560 Speaker 1: against the company for literally doing that. How has it 191 00:10:25,640 --> 00:10:28,760 Speaker 1: taken this long to do anything? It drives me fucking anyway, again, 192 00:10:28,840 --> 00:10:31,959 Speaker 1: it's about incentives. If Meta has no competition, Meta does 193 00:10:32,000 --> 00:10:35,040 Speaker 1: not have to act honestly or give detailed metrics about 194 00:10:35,040 --> 00:10:37,840 Speaker 1: ad performance, because where else are you gonna go, You're 195 00:10:37,880 --> 00:10:41,160 Speaker 1: gonna go to the other advertiser on Facebook. As Matt 196 00:10:41,200 --> 00:10:44,120 Speaker 1: Stoler said in the last episode, as Mata isn't really 197 00:10:44,240 --> 00:10:47,720 Speaker 1: losing business as their products decay, that seriously suggests they've 198 00:10:47,720 --> 00:10:53,000 Speaker 1: got a monopoly over well the advertising on their own products. Now, 199 00:10:53,080 --> 00:10:55,440 Speaker 1: I know some of you say I'm too easy on Apple, 200 00:10:55,480 --> 00:10:58,440 Speaker 1: but don't worry. I'm writing the ship Apple has, at 201 00:10:58,520 --> 00:11:01,320 Speaker 1: least outside of Europe, with the European Commissioners ruled the 202 00:11:01,320 --> 00:11:04,319 Speaker 1: company must allow third party app stores the monopoly over 203 00:11:04,360 --> 00:11:06,800 Speaker 1: the iOS and associated app stores as well as the 204 00:11:06,840 --> 00:11:09,600 Speaker 1: advertising connected to it, meaning that it can set the 205 00:11:09,640 --> 00:11:12,640 Speaker 1: prices such as it's seventy thirty revenue split, what can 206 00:11:12,679 --> 00:11:15,840 Speaker 1: be installed and house said apps and monetized, which is 207 00:11:15,880 --> 00:11:18,360 Speaker 1: again why the Department of Justice has recently sued it 208 00:11:18,360 --> 00:11:22,560 Speaker 1: for antitrust violations. There is only one way to buy 209 00:11:22,600 --> 00:11:24,840 Speaker 1: apps on your iPhone, and that's why the app store 210 00:11:24,880 --> 00:11:27,720 Speaker 1: is so utterly swamped with micro transaction, pumped filth and 211 00:11:27,800 --> 00:11:31,960 Speaker 1: random flashlight apps with invasive advertising and spyware and shit, 212 00:11:32,600 --> 00:11:34,400 Speaker 1: there's not really quality control. 213 00:11:34,440 --> 00:11:35,080 Speaker 2: And that is. 214 00:11:35,120 --> 00:11:39,480 Speaker 1: Usually, by the way, what their argument is, especially Apple 215 00:11:39,520 --> 00:11:41,640 Speaker 1: and I use Apple devices and recording this on an 216 00:11:41,640 --> 00:11:44,280 Speaker 1: Apple device. I use an iPhone and a MacBook. But 217 00:11:44,360 --> 00:11:46,680 Speaker 1: come the fuck on the whole point of the app Store, 218 00:11:46,960 --> 00:11:50,760 Speaker 1: this whole time with Apple holding onto it with their nasty, 219 00:11:51,160 --> 00:11:55,640 Speaker 1: gauntleted fists, was that they hold the quality up. But 220 00:11:55,800 --> 00:11:58,280 Speaker 1: what you see with the app Store today is a disgrace. 221 00:11:59,280 --> 00:12:02,960 Speaker 1: Everything is micro transaction field. And I know the argument is, well, 222 00:12:03,000 --> 00:12:05,800 Speaker 1: that's what customers want. Fuck you, it's what you allow. 223 00:12:06,880 --> 00:12:10,520 Speaker 1: Apple allowed the micro transaction industry to grow on iOS 224 00:12:10,800 --> 00:12:14,880 Speaker 1: and in doing so, effectively killed gaming on your phone. 225 00:12:14,920 --> 00:12:18,000 Speaker 1: The reason that most games require some kind they're free 226 00:12:18,040 --> 00:12:20,280 Speaker 1: to play, but they require some kind of micro transaction 227 00:12:20,360 --> 00:12:23,400 Speaker 1: to really use them is because these games are insanely profitable. 228 00:12:23,559 --> 00:12:27,240 Speaker 1: They're also deeply evil and exploitative. Yeah, Apple allows them 229 00:12:27,280 --> 00:12:29,640 Speaker 1: because Apple makes so much money off of them, thirty 230 00:12:29,679 --> 00:12:34,400 Speaker 1: percent of each transaction. If there was a just world here, 231 00:12:34,480 --> 00:12:36,680 Speaker 1: if we lived in a just society, if the App 232 00:12:36,760 --> 00:12:39,240 Speaker 1: Store was a just society, Apple would have said, no, 233 00:12:39,480 --> 00:12:43,600 Speaker 1: this is an evil kind of money making thing. There 234 00:12:43,679 --> 00:12:46,679 Speaker 1: is no reason why this should exist. And I know 235 00:12:46,800 --> 00:12:48,760 Speaker 1: I sound a bit radical on this, and I'm sure 236 00:12:48,800 --> 00:12:53,120 Speaker 1: someone would disagree and say, oh, I like playing Warlords Battlemasters. 237 00:12:53,520 --> 00:12:56,640 Speaker 1: I don't care. Those games are evil. There's a reason 238 00:12:56,679 --> 00:13:00,480 Speaker 1: why mobile gaming is so thin, and it's because of 239 00:13:00,520 --> 00:13:03,679 Speaker 1: companies like Apple, and Matt Stoler said this on the 240 00:13:03,760 --> 00:13:06,720 Speaker 1: last episode, and I really like this. When you have 241 00:13:06,840 --> 00:13:09,760 Speaker 1: such a strong monopoly, you're effectively a political power, and 242 00:13:09,960 --> 00:13:13,240 Speaker 1: things grow within the system, evil things when you use 243 00:13:13,320 --> 00:13:16,880 Speaker 1: that monopoly and that power in a way that incentivizes them. 244 00:13:17,120 --> 00:13:19,839 Speaker 1: Apple could and should have and the play Store to 245 00:13:19,880 --> 00:13:22,960 Speaker 1: an extent. Sure, but Apple really created this market, should 246 00:13:22,960 --> 00:13:26,800 Speaker 1: have crushed microtransaction filled free to play games. They should 247 00:13:26,840 --> 00:13:29,040 Speaker 1: have rate limited them, I don't know, or they should 248 00:13:29,040 --> 00:13:32,079 Speaker 1: have just not allowed them to live. Companies like Ebony, 249 00:13:32,240 --> 00:13:34,800 Speaker 1: for example, have got so rich over these games that 250 00:13:34,800 --> 00:13:37,840 Speaker 1: require people to put hundreds of dollars to even compete. Hey, 251 00:13:37,840 --> 00:13:41,880 Speaker 1: it's another competition thing, all right. I'll stop rating about 252 00:13:41,920 --> 00:13:45,000 Speaker 1: this though. We'll get back to the advertising side of 253 00:13:45,080 --> 00:13:48,280 Speaker 1: the app store. And Apple, just to be clear, is 254 00:13:48,320 --> 00:13:51,000 Speaker 1: the only advertising firm on the app Store, and that 255 00:13:51,120 --> 00:13:54,240 Speaker 1: is a big problem. Apple has aggressively moved against tracking 256 00:13:54,280 --> 00:13:56,840 Speaker 1: of iOS users, a good thing, by the way, yet 257 00:13:56,840 --> 00:13:59,400 Speaker 1: they hold a complete monopoly on any advertisements on the 258 00:13:59,440 --> 00:14:02,719 Speaker 1: app Store on their phones and any associated advertisement at 259 00:14:02,800 --> 00:14:06,680 Speaker 1: all on the iPhone, and yeah, you just have to 260 00:14:06,760 --> 00:14:09,960 Speaker 1: trust them, by the way, on the results there as 261 00:14:10,480 --> 00:14:12,920 Speaker 1: that's the only company you can advertise with. There's not 262 00:14:12,960 --> 00:14:13,880 Speaker 1: really any other choice. 263 00:14:13,880 --> 00:14:16,400 Speaker 2: Sorry. Also, that's why Apple is also. 264 00:14:16,200 --> 00:14:19,120 Speaker 1: Being sued by the DOJ for alleged German Act violations 265 00:14:19,120 --> 00:14:22,120 Speaker 1: over allegations It's control of services like I Message, which 266 00:14:22,160 --> 00:14:25,880 Speaker 1: is unavailable on Android, door Windows, and as internal documents show, 267 00:14:26,120 --> 00:14:29,240 Speaker 1: is seen as a useful tool for ensuring customer loyalty 268 00:14:29,400 --> 00:14:32,120 Speaker 1: has allowed it to restrict competition in the messaging, smartphone 269 00:14:32,120 --> 00:14:36,360 Speaker 1: and wearable markets. And what's frustrating here is Apple is 270 00:14:36,440 --> 00:14:40,680 Speaker 1: probably not as evil as Google, and I've definitely gone 271 00:14:40,720 --> 00:14:43,200 Speaker 1: to back for Apple. But when you really sit and 272 00:14:43,240 --> 00:14:46,520 Speaker 1: think about it, does it need to be like this? 273 00:14:47,320 --> 00:14:49,600 Speaker 1: Could Apple not open this stuff up? There's not really 274 00:14:49,600 --> 00:14:52,240 Speaker 1: a quality control thing. Eddie Q, if you're listening, come 275 00:14:52,280 --> 00:14:55,000 Speaker 1: on the show shoot the shit with me, because I'd 276 00:14:55,080 --> 00:14:58,600 Speaker 1: like to hear the justification. Steve Jobs was a horrible 277 00:14:58,640 --> 00:15:01,560 Speaker 1: man at Deadbeat Dad, real piece of shit, but he 278 00:15:01,640 --> 00:15:04,240 Speaker 1: at least realized that there was a level of quality 279 00:15:04,280 --> 00:15:07,040 Speaker 1: you had to provide and the app store doesn't have it. 280 00:15:07,200 --> 00:15:09,520 Speaker 1: There is an App Store episode coming, By the way, 281 00:15:09,960 --> 00:15:12,000 Speaker 1: I'm gonna really take it to task because I think 282 00:15:12,080 --> 00:15:15,600 Speaker 1: that Apple's responsibility to society here is yet another thing 283 00:15:15,640 --> 00:15:19,640 Speaker 1: they've defaulted on, just like Google's defaulted on search. And 284 00:15:19,680 --> 00:15:22,800 Speaker 1: you know, this whole thing is it comes down to restrictions. 285 00:15:23,280 --> 00:15:25,800 Speaker 1: And I don't think you should live restrict for lives. 286 00:15:25,840 --> 00:15:29,360 Speaker 1: Though restricted lives, I don't know, but if you want 287 00:15:29,400 --> 00:15:32,240 Speaker 1: to free yourself and especially the money in your wallet, 288 00:15:32,600 --> 00:15:34,480 Speaker 1: you should buy one of the following products. 289 00:15:34,560 --> 00:15:34,960 Speaker 2: Or don't. 290 00:15:35,200 --> 00:15:38,000 Speaker 1: That's what a life unrestricted feels like. But take your 291 00:15:38,000 --> 00:15:40,760 Speaker 1: wallets out and maybe start spending on this product that's 292 00:15:40,760 --> 00:15:43,440 Speaker 1: coming up that I'm sure you're gonna hear the ad 293 00:15:43,440 --> 00:15:45,800 Speaker 1: and you're gonna be like, damn, damn, that's so. 294 00:15:45,840 --> 00:15:47,800 Speaker 2: Good for Ed. Ed probably loves this. 295 00:15:47,880 --> 00:15:50,600 Speaker 1: It's probably hearing this ad and saying, damn, they really 296 00:15:50,680 --> 00:15:53,440 Speaker 1: nailed the things that I believe in. So go on, 297 00:15:53,720 --> 00:15:55,560 Speaker 1: show them your credit card, wave it in their face 298 00:15:55,600 --> 00:16:08,640 Speaker 1: a bit yum young, and we're back. But I want 299 00:16:08,640 --> 00:16:11,160 Speaker 1: to make it clear, and I will make it clear. 300 00:16:11,560 --> 00:16:16,160 Speaker 1: The competition is good. You want competition. Every one of 301 00:16:16,200 --> 00:16:19,120 Speaker 1: these companies has sold you a lie that allowing them 302 00:16:19,120 --> 00:16:22,240 Speaker 1: to control the experience makes it better because it'll be 303 00:16:22,320 --> 00:16:25,360 Speaker 1: curated by the company that made it. Yet the companies 304 00:16:25,360 --> 00:16:28,440 Speaker 1: that make these things a huge constantly laying people off, 305 00:16:28,480 --> 00:16:30,720 Speaker 1: though this isn't the case with Apple, and when given 306 00:16:30,800 --> 00:16:33,120 Speaker 1: the chance, will take as many liberties as they can 307 00:16:33,320 --> 00:16:36,480 Speaker 1: to squeezees many dollars out of every user. And when 308 00:16:36,480 --> 00:16:40,240 Speaker 1: they don't have to compete, they get lazy, they get domesticated. 309 00:16:40,400 --> 00:16:42,800 Speaker 1: They don't have to innovate or impress you. They just 310 00:16:42,880 --> 00:16:44,920 Speaker 1: have to keep you there, and keeping you there can 311 00:16:44,920 --> 00:16:47,600 Speaker 1: be as simple as it's really difficult to move, or 312 00:16:47,600 --> 00:16:50,200 Speaker 1: where else are you going to go? I keep using 313 00:16:50,280 --> 00:16:53,160 Speaker 1: my iPhone because I genuinely like iOS, but I also 314 00:16:53,240 --> 00:16:55,240 Speaker 1: know that if I message was an app rather than 315 00:16:55,280 --> 00:16:58,400 Speaker 1: a thing only found in Apple products, I'd absolutely consider 316 00:16:58,520 --> 00:17:01,360 Speaker 1: using another platform. I'm sure someone's going to message me 317 00:17:01,400 --> 00:17:04,119 Speaker 1: about goddamn beeper or something like that. It's not a 318 00:17:04,119 --> 00:17:08,160 Speaker 1: good ux. I don't like it, sorry, Casey. Anyway, when 319 00:17:08,160 --> 00:17:11,480 Speaker 1: you have a marketplace entirely dominated by one company selling 320 00:17:11,480 --> 00:17:15,080 Speaker 1: advertising on services it runs, you really have no idea 321 00:17:15,119 --> 00:17:17,760 Speaker 1: what you're buying. And this is when we get back 322 00:17:17,760 --> 00:17:22,159 Speaker 1: to Google and specifically their AI powered Performance Max platform, 323 00:17:22,320 --> 00:17:24,920 Speaker 1: a four year old black box advertising solution that covers 324 00:17:24,920 --> 00:17:28,160 Speaker 1: all of Google's properties, letting you run one campaign across 325 00:17:28,200 --> 00:17:33,560 Speaker 1: every Google property. Man, how convenient, right? You just tell 326 00:17:33,600 --> 00:17:35,680 Speaker 1: Google what you want, how much you want to spend, 327 00:17:35,680 --> 00:17:37,959 Speaker 1: and roughly who you'd like to see it with what 328 00:17:38,000 --> 00:17:40,159 Speaker 1: you're advertising a Google will magically tell you at the 329 00:17:40,280 --> 00:17:42,840 Speaker 1: end how many people saw your ads and how much 330 00:17:42,840 --> 00:17:44,920 Speaker 1: you owe Google for the pleasure. And no, you do 331 00:17:44,960 --> 00:17:47,719 Speaker 1: not know where the ads ran, which is a problem 332 00:17:47,800 --> 00:17:50,960 Speaker 1: That means that hundreds of large brands find themselves every 333 00:17:51,040 --> 00:17:53,600 Speaker 1: year spending money on spammy and scammy websites that likely 334 00:17:53,640 --> 00:17:56,600 Speaker 1: never get them any real customers. And as an aside, 335 00:17:56,640 --> 00:17:59,640 Speaker 1: by the way I'm hearing tell that there's a big 336 00:17:59,680 --> 00:18:04,359 Speaker 1: problem in CPM advertising cost per mile, so impressions where 337 00:18:05,080 --> 00:18:07,359 Speaker 1: I don't know the impressions might not be real people, 338 00:18:07,400 --> 00:18:11,159 Speaker 1: they might be bots. Oh and you know what, I 339 00:18:11,200 --> 00:18:13,600 Speaker 1: have to wonder if the end of this trial doesn't 340 00:18:13,640 --> 00:18:17,000 Speaker 1: involve that data being shared with the rest of the 341 00:18:17,040 --> 00:18:19,200 Speaker 1: companies in the industry and US finding out it's a 342 00:18:19,280 --> 00:18:22,080 Speaker 1: much bigger problem. I have an advertising episode coming up 343 00:18:22,119 --> 00:18:26,200 Speaker 1: as well. This, by the way, all of this horrible 344 00:18:26,240 --> 00:18:29,639 Speaker 1: monopolistic chicanery. This is what keeps the lights on for 345 00:18:29,680 --> 00:18:33,119 Speaker 1: these companies. Google and Meta own both the products and 346 00:18:33,160 --> 00:18:36,240 Speaker 1: the advertising services available on those products, and thus set 347 00:18:36,240 --> 00:18:38,520 Speaker 1: the terms of every part of the transaction. Because there's 348 00:18:38,560 --> 00:18:41,680 Speaker 1: no other way to advertise on Google, Search, Facebook, or Instagram, 349 00:18:41,920 --> 00:18:45,040 Speaker 1: there are entities competing for placement, but that competition is 350 00:18:45,080 --> 00:18:47,760 Speaker 1: done on the terms and the platforms set by the 351 00:18:47,760 --> 00:18:51,320 Speaker 1: platforms themselves, which in turn control how and when the 352 00:18:51,320 --> 00:18:55,160 Speaker 1: ads are shown and how much you'll be charged for them. Crucially, 353 00:18:55,480 --> 00:18:58,719 Speaker 1: these companies also control all the data involved. They are 354 00:18:58,720 --> 00:19:00,879 Speaker 1: both the companies selling you the ad space and the 355 00:19:00,880 --> 00:19:04,240 Speaker 1: company auditing said ad space and the business. If you 356 00:19:04,280 --> 00:19:07,360 Speaker 1: do not like Google as an advertising vendor on Google, 357 00:19:07,920 --> 00:19:10,760 Speaker 1: or Meta as a partner to advertise with on Facebook, 358 00:19:10,840 --> 00:19:13,400 Speaker 1: you are shit out of luck, both if you want 359 00:19:13,400 --> 00:19:15,199 Speaker 1: to try an alternative and if you need them to 360 00:19:15,240 --> 00:19:18,160 Speaker 1: improve the product in question. This is the exact reason 361 00:19:18,160 --> 00:19:21,080 Speaker 1: that Google is so nervous about its upcoming antitrust trial 362 00:19:21,119 --> 00:19:24,800 Speaker 1: over its accused monopoly over digital advertising, because the government 363 00:19:24,800 --> 00:19:27,840 Speaker 1: wants it to divest its ad management divination, which would 364 00:19:27,840 --> 00:19:30,840 Speaker 1: in turn create an entirely different marketplace, one where it 365 00:19:30,880 --> 00:19:34,800 Speaker 1: actually I don't know had to compete. I also don't 366 00:19:34,800 --> 00:19:37,480 Speaker 1: believe that most of these companies can operate without their monopolies. 367 00:19:37,480 --> 00:19:41,119 Speaker 1: As I've said before, Facebook and Instagram are increasingly decaying 368 00:19:41,160 --> 00:19:43,640 Speaker 1: products that make tens of billions of dollars a year 369 00:19:43,800 --> 00:19:46,439 Speaker 1: because there's no competitor that can undercut or compete with 370 00:19:46,480 --> 00:19:50,119 Speaker 1: metas advertising dollars, which make up ninety eight percent of 371 00:19:50,160 --> 00:19:53,800 Speaker 1: their revenue. Meta made thirteen point four to six billion 372 00:19:53,840 --> 00:19:56,960 Speaker 1: dollars in profit last quarter on thirty nine billion dollars 373 00:19:57,160 --> 00:19:59,400 Speaker 1: in revenue, which is a direct result of it being 374 00:19:59,400 --> 00:20:02,159 Speaker 1: able to manipul the platform to show more advertising and 375 00:20:02,320 --> 00:20:06,400 Speaker 1: increase the pricing of the advertising being shown. Metas users 376 00:20:06,400 --> 00:20:08,720 Speaker 1: are trapped because Meta owns two of the largest social 377 00:20:08,720 --> 00:20:10,840 Speaker 1: networks in the world three if you count Threads, though 378 00:20:10,880 --> 00:20:14,639 Speaker 1: it doesn't show adds yet, and Metas advertisers need to 379 00:20:14,640 --> 00:20:16,600 Speaker 1: be able to access the swards of people that the 380 00:20:16,640 --> 00:20:20,960 Speaker 1: platform has. Everyone loses except for Meta. Of course, Meta 381 00:20:21,000 --> 00:20:24,879 Speaker 1: does so very well, but we need to crush their monopoly. 382 00:20:25,840 --> 00:20:27,600 Speaker 1: And by the way, all of this goes for Google 383 00:20:27,640 --> 00:20:30,400 Speaker 1: two and they made a profit of twenty three point 384 00:20:30,520 --> 00:20:33,600 Speaker 1: six two billion dollars last quarter, but on revenues of 385 00:20:33,680 --> 00:20:37,560 Speaker 1: eighty four point seventy four billion dollars. Do you really 386 00:20:37,640 --> 00:20:41,080 Speaker 1: think that sixty one billion dollars in expenditures or losses 387 00:20:41,119 --> 00:20:43,800 Speaker 1: is sustainable in the event that Google no longer owns 388 00:20:43,800 --> 00:20:47,680 Speaker 1: a monopoly over its advertising space. All those costs aren't 389 00:20:47,720 --> 00:20:51,479 Speaker 1: all associated with Google Search half of their revenue is, 390 00:20:51,720 --> 00:20:53,720 Speaker 1: and how much of said revenue is tied in the 391 00:20:53,800 --> 00:20:57,600 Speaker 1: vagueness of the metrics it provides to its advertisers. Using 392 00:20:57,640 --> 00:21:00,000 Speaker 1: these numbers, we see that Meta had expenditures of twins 393 00:21:00,000 --> 00:21:03,720 Speaker 1: tent five point five four billion dollars over the last quarter. Again, 394 00:21:03,840 --> 00:21:06,400 Speaker 1: can it sustain this level of spending without a monopoly 395 00:21:06,440 --> 00:21:09,720 Speaker 1: on advertising on Facebook and Instagram? I don't think they can. 396 00:21:10,080 --> 00:21:12,399 Speaker 1: And sure they could cut back on the tens of 397 00:21:12,440 --> 00:21:15,480 Speaker 1: billions of dollars they're putting into reality labs. That might help, 398 00:21:15,760 --> 00:21:17,680 Speaker 1: but at some point they're going to run out of 399 00:21:17,720 --> 00:21:21,040 Speaker 1: people to sell to and they definitely couldn't survive if 400 00:21:21,080 --> 00:21:24,080 Speaker 1: they couldn't rig the dice how they have been. And 401 00:21:24,160 --> 00:21:27,000 Speaker 1: while we might like the main revenue driving products and 402 00:21:27,040 --> 00:21:30,400 Speaker 1: services from Apple like iPhones and MacBooks and Microsoft Xbox, 403 00:21:30,440 --> 00:21:33,399 Speaker 1: Surface Office three sixty five and Windows, it's hard to 404 00:21:33,440 --> 00:21:35,800 Speaker 1: say the same of Meta and Google, and I believe 405 00:21:35,840 --> 00:21:39,439 Speaker 1: both are very brittle. As a result, a lack of 406 00:21:39,440 --> 00:21:42,600 Speaker 1: competition has turned Metascore products into skinner boxes that live 407 00:21:42,680 --> 00:21:44,880 Speaker 1: only as a result of a combination of a black 408 00:21:44,920 --> 00:21:48,080 Speaker 1: box advertising product where nobody knows what's actually happening, and 409 00:21:48,119 --> 00:21:50,600 Speaker 1: a product that billions of people rely on and use 410 00:21:50,680 --> 00:21:53,639 Speaker 1: for free, kind of like Google Search and its associated 411 00:21:53,640 --> 00:21:57,080 Speaker 1: products like Gmail and Google Docs, which I got to 412 00:21:57,119 --> 00:22:00,840 Speaker 1: admit I still really like Gmail and Google are so good. 413 00:22:01,400 --> 00:22:04,080 Speaker 1: I have had readers and listeners ask I don't know 414 00:22:04,080 --> 00:22:05,760 Speaker 1: when they're going to fuck them up, and I'm scared. 415 00:22:06,440 --> 00:22:08,720 Speaker 1: But these companies are not competing so much as they're 416 00:22:08,720 --> 00:22:11,600 Speaker 1: holding the digital lives of their customers hostage and using 417 00:22:11,640 --> 00:22:13,399 Speaker 1: that as a means to set the terms of how 418 00:22:13,440 --> 00:22:16,840 Speaker 1: they're shown advertising that Google both controls the placement and 419 00:22:16,960 --> 00:22:20,960 Speaker 1: pricing up. They're not worried about somebody using the other product. 420 00:22:21,640 --> 00:22:25,199 Speaker 1: Facebook has really not got any competitors, let's be honest. 421 00:22:25,520 --> 00:22:29,280 Speaker 1: Gmail kind of does, but does it. It's just it's 422 00:22:29,320 --> 00:22:32,760 Speaker 1: a big mess. But you know, if you're looking for 423 00:22:32,840 --> 00:22:36,040 Speaker 1: an alternative product to something you already own, well, there's 424 00:22:36,080 --> 00:22:38,479 Speaker 1: a great place to go to and it's whatever the 425 00:22:38,520 --> 00:22:40,880 Speaker 1: next thing you hear is. And I'm sure they're very 426 00:22:40,920 --> 00:22:44,399 Speaker 1: trustworthy and they would never ever embarrass me. And you 427 00:22:44,440 --> 00:22:47,680 Speaker 1: should take your wallet and just fastball it at them 428 00:22:47,880 --> 00:22:51,480 Speaker 1: so hard you require Tommy John's surgery. Please buy the 429 00:22:51,560 --> 00:23:00,000 Speaker 1: thing or dimond, I don't know. I can't make you, 430 00:23:07,240 --> 00:23:10,280 Speaker 1: and we're back. As I was saying, Google doesn't have 431 00:23:10,320 --> 00:23:12,840 Speaker 1: to worry about losing you to another search engine, nor 432 00:23:12,880 --> 00:23:15,240 Speaker 1: does it worry about you leaving Gmail or Google Docs 433 00:23:15,320 --> 00:23:17,800 Speaker 1: or any of its other products, because leaving is hard 434 00:23:17,840 --> 00:23:21,560 Speaker 1: and advertisers simply do not have another choice. Google has 435 00:23:21,600 --> 00:23:24,240 Speaker 1: such a large market share of so many markets and 436 00:23:24,320 --> 00:23:27,520 Speaker 1: just one easy ad platform to use them, ah, I 437 00:23:27,600 --> 00:23:30,359 Speaker 1: would be painful. And also where else do you find 438 00:23:30,520 --> 00:23:34,920 Speaker 1: this many customers? It doesn't even have to as Microsoft, Amazon, 439 00:23:34,960 --> 00:23:38,040 Speaker 1: and Apple have had to diversify its business or add 440 00:23:38,119 --> 00:23:40,679 Speaker 1: other revenue streams besides the big two of search and 441 00:23:40,720 --> 00:23:45,080 Speaker 1: online advertising. Yes they make money on cloud, yes, yes, yes, 442 00:23:45,160 --> 00:23:47,920 Speaker 1: but that's not going to replace the search revenue. Don't 443 00:23:47,960 --> 00:23:50,359 Speaker 1: take the piss. I'd even go as far as to 444 00:23:50,400 --> 00:23:54,560 Speaker 1: say that Google can't diversify, at least culturally speaking. When 445 00:23:54,600 --> 00:23:56,640 Speaker 1: it was a young company, Google had a policy where 446 00:23:56,640 --> 00:23:58,840 Speaker 1: engineers could spend at least twenty percent of their time 447 00:23:59,040 --> 00:24:01,920 Speaker 1: on projects that in rested them. This in turn led 448 00:24:01,920 --> 00:24:04,640 Speaker 1: to the creation of beloved things like Google News, which 449 00:24:04,680 --> 00:24:07,920 Speaker 1: was a passion project of Krishna Barat, and Gmail from 450 00:24:07,960 --> 00:24:12,920 Speaker 1: Paul Boushett. And what's crazy about this is Google has 451 00:24:13,000 --> 00:24:15,359 Speaker 1: kind of moved away from this model. I'll get to 452 00:24:15,400 --> 00:24:18,320 Speaker 1: it in a second. It's extremely blood boiling in the 453 00:24:18,359 --> 00:24:21,240 Speaker 1: twenty tens. As Google entered this adolescence, it began to 454 00:24:21,280 --> 00:24:25,000 Speaker 1: resemble sadly the kind of stodgy corporate behemoths it once 455 00:24:25,080 --> 00:24:28,680 Speaker 1: for cutting perks and ending permissive workplace practices, and one, 456 00:24:28,960 --> 00:24:32,600 Speaker 1: it seems, was this twenty percent time. Whether twenty percent 457 00:24:32,640 --> 00:24:36,359 Speaker 1: time still exists is genuinely a hot debate in the Valley. 458 00:24:36,480 --> 00:24:39,520 Speaker 1: While Google insists it remains a policy, some Google employees 459 00:24:39,560 --> 00:24:42,239 Speaker 1: claim it no longer exists, although it's effectively become one 460 00:24:42,320 --> 00:24:45,080 Speaker 1: hundred and twenty percent time, meaning that you effectively have 461 00:24:45,240 --> 00:24:47,240 Speaker 1: to do it on top of the rest of your work. 462 00:24:47,960 --> 00:24:49,960 Speaker 1: In a report by Quarts from a few years ago, 463 00:24:50,160 --> 00:24:52,480 Speaker 1: one engineer blamed the death of twenty percent time on 464 00:24:52,560 --> 00:24:56,800 Speaker 1: stack ranking, where you fire the bottom percentile of workers 465 00:24:56,800 --> 00:24:59,359 Speaker 1: based on their performance every quarter or so. And if 466 00:24:59,400 --> 00:25:00,920 Speaker 1: you want to know it, blaming for that idea is 467 00:25:01,000 --> 00:25:04,439 Speaker 1: Jack fucking Welch, who I went into detail with about 468 00:25:04,480 --> 00:25:07,199 Speaker 1: and just every time I think of Jack Welch, you 469 00:25:07,240 --> 00:25:09,720 Speaker 1: need to listen to the Shareholder Supremacy Series. By the way, 470 00:25:09,920 --> 00:25:11,880 Speaker 1: it just makes me so angry because you can see 471 00:25:11,920 --> 00:25:16,880 Speaker 1: his influence everywhere. It makes me so no, no, anyway, 472 00:25:17,280 --> 00:25:20,160 Speaker 1: Google's rock continued in twenty fifteen when they hired former 473 00:25:20,200 --> 00:25:24,600 Speaker 1: Morgan Stanley financial executive Ruth parat Is at CFO. Porat's 474 00:25:24,640 --> 00:25:27,840 Speaker 1: arrival was celebrated by the markets, which added sixty billion 475 00:25:27,880 --> 00:25:31,000 Speaker 1: dollars to Google's market capitalization as the share price went up, 476 00:25:31,480 --> 00:25:34,040 Speaker 1: in part because they expected parat to bring Google to 477 00:25:34,040 --> 00:25:36,720 Speaker 1: a level of fiscal discipline it sorely lacked, by which 478 00:25:36,760 --> 00:25:39,639 Speaker 1: I mean that Google made over seventeen billion dollars a 479 00:25:39,720 --> 00:25:42,199 Speaker 1: year in profits, which was not enough for them. And 480 00:25:42,240 --> 00:25:46,040 Speaker 1: as The Information reported in twenty twenty one, this involved 481 00:25:46,080 --> 00:25:48,879 Speaker 1: killing products that from the outset didn't appear to be 482 00:25:48,920 --> 00:25:53,800 Speaker 1: going anywhere. But you know, things take time. Products take time. 483 00:25:54,200 --> 00:25:56,880 Speaker 1: Gmail took time. I don't think Gmail made much money 484 00:25:56,880 --> 00:25:58,440 Speaker 1: for the first few years they were still working out 485 00:25:58,440 --> 00:26:00,680 Speaker 1: how to make money off of it. Sometimes you need 486 00:26:00,680 --> 00:26:06,639 Speaker 1: to experiment, and I don't know innovate and man though, man, 487 00:26:07,480 --> 00:26:11,320 Speaker 1: they love killing products though Google they claim to invest 488 00:26:11,320 --> 00:26:14,679 Speaker 1: in innovation, but they really don't. And their reputation is 489 00:26:14,760 --> 00:26:17,040 Speaker 1: so good that there is an entire website called killed 490 00:26:17,080 --> 00:26:19,960 Speaker 1: by Google that lists everything they've killed. While some of 491 00:26:20,000 --> 00:26:22,400 Speaker 1: these products had a decent run, like Google Domains, which 492 00:26:22,400 --> 00:26:24,960 Speaker 1: made it nine whole years, others were terminated in a 493 00:26:25,000 --> 00:26:27,159 Speaker 1: matter of months, like game Builder, which was a beginner 494 00:26:27,160 --> 00:26:30,760 Speaker 1: friendly tool for building multiplayer three D games that lasted wow, 495 00:26:30,960 --> 00:26:33,840 Speaker 1: five whole months before Google got out the bolt Gun. 496 00:26:34,680 --> 00:26:36,480 Speaker 1: The reason I bring this up is because it's very 497 00:26:36,480 --> 00:26:40,400 Speaker 1: illustrative of Google's biggest threat that they have from antitrust action. 498 00:26:41,119 --> 00:26:44,240 Speaker 1: Their cultures moved away from innovating and creating things and 499 00:26:44,280 --> 00:26:48,439 Speaker 1: experimenting to make things. And what sucks is they didn't 500 00:26:48,480 --> 00:26:50,760 Speaker 1: have to do this. They've all they've been profitable for 501 00:26:50,760 --> 00:26:54,119 Speaker 1: what decades now. But I think there's three reasons why 502 00:26:54,160 --> 00:26:57,440 Speaker 1: they can't innovate anymore. First of all, employees aren't really 503 00:26:57,440 --> 00:27:00,360 Speaker 1: provided the opportunity to work on promising ideas without fearing 504 00:27:00,480 --> 00:27:04,200 Speaker 1: that well they'll get fired for not doing their main job. Secondly, 505 00:27:04,480 --> 00:27:07,679 Speaker 1: even if they manage to create something new and interesting, 506 00:27:07,920 --> 00:27:11,199 Speaker 1: Google has shown a total lack of patience and they 507 00:27:11,240 --> 00:27:13,880 Speaker 1: won't let things mature and grow over time, which kind 508 00:27:13,880 --> 00:27:16,560 Speaker 1: of echoes a wider financial problem. You see it a 509 00:27:16,560 --> 00:27:19,400 Speaker 1: lot in media and indeed podcasts, where podcasts are given 510 00:27:19,440 --> 00:27:22,080 Speaker 1: what three months to sing for their supper, and if 511 00:27:22,080 --> 00:27:25,040 Speaker 1: they don't survive, they're killed. Same with TV shows. And 512 00:27:25,119 --> 00:27:29,159 Speaker 1: guess what, it's something that tracks very precisely with the 513 00:27:29,200 --> 00:27:32,639 Speaker 1: management consultants like sund Up A shy coming in. But 514 00:27:32,720 --> 00:27:34,520 Speaker 1: the third thing, by the way, is the most obvious, 515 00:27:34,520 --> 00:27:36,720 Speaker 1: and that's Google does not need to innovate, or at 516 00:27:36,760 --> 00:27:39,280 Speaker 1: least they don't believe they need to. Google makes an 517 00:27:39,320 --> 00:27:42,639 Speaker 1: absolute killing from search and advertising, So why would it bother? 518 00:27:43,160 --> 00:27:46,679 Speaker 1: Why bother trying to make something interesting or unique, something 519 00:27:46,680 --> 00:27:50,080 Speaker 1: that might make oh ugh, disgusting. Only fifty or one 520 00:27:50,119 --> 00:27:54,160 Speaker 1: hundred million dollars a year, h your big nasty monopolies 521 00:27:54,200 --> 00:27:56,639 Speaker 1: gushing billions of dollars without you doing anything. You just 522 00:27:56,720 --> 00:27:59,280 Speaker 1: mess with the customers. Every day more money comes out. 523 00:27:59,400 --> 00:28:02,040 Speaker 1: Why would you possibly try and make a new business line? 524 00:28:02,440 --> 00:28:02,880 Speaker 2: Idiot? 525 00:28:03,440 --> 00:28:07,560 Speaker 1: But that's the thing. This is how Google runs. Why 526 00:28:07,560 --> 00:28:10,800 Speaker 1: would Google possibly tolerate a product that didn't turn into 527 00:28:10,800 --> 00:28:12,800 Speaker 1: a hypergrowth market or look like it might. 528 00:28:13,119 --> 00:28:14,600 Speaker 2: Who cares? Why would you bother? 529 00:28:15,000 --> 00:28:18,359 Speaker 1: Why when there's nobody to compete with? Why would you 530 00:28:18,359 --> 00:28:22,400 Speaker 1: give a shit? And that's the thing. We may call 531 00:28:22,520 --> 00:28:26,040 Speaker 1: this company Google. We may refer to Google as the 532 00:28:26,280 --> 00:28:29,080 Speaker 1: owner of Google Search, the creator of Google Search, the 533 00:28:29,160 --> 00:28:32,840 Speaker 1: creator of Gmail. But Google is not Google anymore. Google 534 00:28:32,920 --> 00:28:35,919 Speaker 1: the company that was beloved for their search product and 535 00:28:35,960 --> 00:28:37,200 Speaker 1: for their email product. 536 00:28:37,840 --> 00:28:38,320 Speaker 2: They're dead. 537 00:28:39,200 --> 00:28:42,680 Speaker 1: The company with such cultural importance that its name is 538 00:28:42,720 --> 00:28:47,840 Speaker 1: a fucking verb is dead. Killed by people like Prabagar Ragavan, 539 00:28:47,960 --> 00:28:52,000 Speaker 1: Liz Read, and Sandhar Pisshai. What exists today is a 540 00:28:52,040 --> 00:28:55,160 Speaker 1: private equity firm with a bunch of flailing business units 541 00:28:55,200 --> 00:28:57,760 Speaker 1: bolted onto a monopoly over a search engine and its 542 00:28:57,800 --> 00:29:02,200 Speaker 1: associated advertising, run by a former management consultant called Sonda Peshai. 543 00:29:02,720 --> 00:29:05,959 Speaker 1: Google's culture is burning in broad daylight its workers. And 544 00:29:06,000 --> 00:29:07,920 Speaker 1: I hear from a lot of you, and I love 545 00:29:07,960 --> 00:29:12,480 Speaker 1: hearing from you. I will protect your identities. They're furious. 546 00:29:12,560 --> 00:29:15,280 Speaker 1: They're furious of what has been done and what is 547 00:29:15,360 --> 00:29:17,960 Speaker 1: being done to a company that used to be synonymous 548 00:29:18,000 --> 00:29:21,880 Speaker 1: with innovation and experimentation, and this is why I want 549 00:29:21,920 --> 00:29:25,200 Speaker 1: to emphasize how dire things are for Google. Keeping the 550 00:29:25,280 --> 00:29:27,640 Speaker 1: lights on in Mountain View. It isn't cheap, and I'd 551 00:29:27,680 --> 00:29:30,480 Speaker 1: argue that Google is only capable of operating its current 552 00:29:30,520 --> 00:29:33,720 Speaker 1: scale because of its bullshit dominance of search and ads. 553 00:29:34,480 --> 00:29:38,920 Speaker 1: If it's forced to, for example, divest its lucrative advertising business, 554 00:29:38,920 --> 00:29:41,520 Speaker 1: which would require them cutting off pretty much the most 555 00:29:41,520 --> 00:29:44,520 Speaker 1: profitable business of all time, or sharing data with competitors 556 00:29:44,560 --> 00:29:47,640 Speaker 1: which would allow their competitors to compete, or jettisoning its 557 00:29:47,680 --> 00:29:50,880 Speaker 1: Android or Chrome businesses, I'm just not sure that Google, 558 00:29:51,520 --> 00:29:56,080 Speaker 1: both culturally and financially, is capable of competing. I don't 559 00:29:56,320 --> 00:29:59,360 Speaker 1: think they are a competitive business in the way that 560 00:29:59,400 --> 00:30:03,080 Speaker 1: most business. Let me give you an example, my PR firm, right, 561 00:30:03,480 --> 00:30:06,800 Speaker 1: or any real business. I have competitors. If I'm shit 562 00:30:06,880 --> 00:30:09,640 Speaker 1: at my job, if it gets around, if people are 563 00:30:09,680 --> 00:30:11,640 Speaker 1: saying I'm shit, if I do a bad job from 564 00:30:11,800 --> 00:30:15,240 Speaker 1: tons of people, someone else can be hired in my place. 565 00:30:15,440 --> 00:30:18,520 Speaker 1: The same thing happens from many small business owners and 566 00:30:18,720 --> 00:30:20,920 Speaker 1: just regular people at jobs. If you're shit at your job, 567 00:30:20,960 --> 00:30:23,440 Speaker 1: you get fired, and in turn, you would lose money. 568 00:30:23,520 --> 00:30:25,560 Speaker 1: Thus you try and do a good job so that 569 00:30:25,600 --> 00:30:28,040 Speaker 1: you're kept at your job or your business keeps getting 570 00:30:28,040 --> 00:30:30,160 Speaker 1: money so that the business keeps going. I know this 571 00:30:30,200 --> 00:30:33,440 Speaker 1: sounds very obvious, but Google, on the other hand, has 572 00:30:33,480 --> 00:30:37,400 Speaker 1: never really had to compete with anybody on quality, not 573 00:30:37,480 --> 00:30:40,040 Speaker 1: of search results, not of ad product, nor have they 574 00:30:40,040 --> 00:30:44,280 Speaker 1: had to compete with I don't know other advertisers. Searches 575 00:30:44,320 --> 00:30:47,360 Speaker 1: are monopoly onto itself. They bullied and used mob like 576 00:30:47,400 --> 00:30:50,120 Speaker 1: tactics and just swards of money to get people out, 577 00:30:50,160 --> 00:30:53,040 Speaker 1: but on the advertising side, they've never had competition. They 578 00:30:53,120 --> 00:30:56,160 Speaker 1: built the marketplace, then they shut the fucking doors behind everyone, 579 00:30:56,880 --> 00:30:58,000 Speaker 1: I guess in front of them. 580 00:30:58,240 --> 00:30:59,080 Speaker 2: Eh. Whatever. 581 00:30:59,760 --> 00:31:04,000 Speaker 1: But taking this a step further, I just don't believe 582 00:31:04,040 --> 00:31:06,280 Speaker 1: that the company with more than half of its revenue 583 00:31:06,320 --> 00:31:09,680 Speaker 1: coming from such an obvious monopoly is built sustainably. And 584 00:31:09,720 --> 00:31:12,160 Speaker 1: in fact, I believe that Google search monopoly is used 585 00:31:12,160 --> 00:31:15,479 Speaker 1: to bankroll their other oligopolies in other industries like cloud 586 00:31:15,520 --> 00:31:19,760 Speaker 1: and mobile and internet browsers. Cloud is profitable, ish took 587 00:31:19,800 --> 00:31:21,800 Speaker 1: them a while to get there, and with the mass 588 00:31:21,920 --> 00:31:24,560 Speaker 1: buildouts they're doing for Google Gemini, do you really think 589 00:31:24,560 --> 00:31:28,880 Speaker 1: it's profitable anymore? Let me put it simply. Google is 590 00:31:28,920 --> 00:31:32,120 Speaker 1: not a company built for competition, and I believe it 591 00:31:32,200 --> 00:31:35,680 Speaker 1: will collapse if it's ever forced to compete. I don't 592 00:31:35,880 --> 00:31:38,600 Speaker 1: think this company is capable of the kind of adaptation 593 00:31:38,800 --> 00:31:41,960 Speaker 1: or reinvention it would need. I think it's lost that ability, 594 00:31:42,080 --> 00:31:44,800 Speaker 1: and it's lost it through tens of thousands of layoffs 595 00:31:45,040 --> 00:31:47,240 Speaker 1: and being run by a guy whose only job is 596 00:31:47,240 --> 00:31:50,920 Speaker 1: to make number go up. The vibrancy and culture that 597 00:31:50,960 --> 00:31:54,240 Speaker 1: once existed in Google is dead and gone and isn't 598 00:31:54,240 --> 00:31:59,000 Speaker 1: coming back. And while Google is significantly more profitable, well, 599 00:31:59,280 --> 00:32:01,920 Speaker 1: there's a chance to it ends up shattering and turning 600 00:32:01,920 --> 00:32:05,240 Speaker 1: into several different Yahoos. Hey, that reminds me of something 601 00:32:05,960 --> 00:32:09,120 Speaker 1: their current search head, Propa gard Ragavan, when they used 602 00:32:09,120 --> 00:32:09,400 Speaker 1: to work. 603 00:32:09,560 --> 00:32:16,040 Speaker 2: Was it Yahoo? Is that good? Is Yahoo a good company? Oh? Fuck? 604 00:32:16,040 --> 00:32:17,920 Speaker 2: They're owned by a private acuity. Film that's not good. 605 00:32:19,080 --> 00:32:21,560 Speaker 1: Well anyway, In the next episode, I'm going to dive 606 00:32:21,600 --> 00:32:24,320 Speaker 1: into the specifics of how Google amassed it's monopoly and 607 00:32:24,360 --> 00:32:26,680 Speaker 1: what breaking it up might actually mean for the future 608 00:32:26,680 --> 00:32:29,000 Speaker 1: of the company and the Internet at large. I'm very 609 00:32:29,040 --> 00:32:31,280 Speaker 1: excited to talk about it because I want to see 610 00:32:31,320 --> 00:32:34,840 Speaker 1: these companies burned. I want to see companies that refuse 611 00:32:34,920 --> 00:32:38,040 Speaker 1: to compete, that refuse to act on human terms, that 612 00:32:38,120 --> 00:32:41,440 Speaker 1: treat their customers like shit, that are run by insanely 613 00:32:41,560 --> 00:32:44,760 Speaker 1: rich guys who don't talk to regular people. I want 614 00:32:44,800 --> 00:32:47,240 Speaker 1: to see them burn. If you're a big company and 615 00:32:47,280 --> 00:32:49,160 Speaker 1: you do a good job, I had no problem with 616 00:32:49,200 --> 00:32:53,000 Speaker 1: you none, But if you must exploit to get rich, 617 00:32:53,400 --> 00:32:57,560 Speaker 1: fuck you. I'm coming for you every week, every goddamn day. 618 00:32:58,280 --> 00:33:09,600 Speaker 1: Thank you, listeners, Thank you for listening to Better Offline. 619 00:33:09,760 --> 00:33:12,160 Speaker 3: The editor and composer of the Better Offline theme song 620 00:33:12,240 --> 00:33:14,880 Speaker 3: is Matasowski. You can check out more of his music 621 00:33:14,920 --> 00:33:18,560 Speaker 3: and audio projects at Matasowski dot com, M A T 622 00:33:18,560 --> 00:33:23,040 Speaker 3: T O S O W s ki dot com. You 623 00:33:23,040 --> 00:33:25,560 Speaker 3: can email me at easy at Better offline dot com 624 00:33:25,680 --> 00:33:28,000 Speaker 3: or visit Better Offline dot com to find more podcast 625 00:33:28,040 --> 00:33:31,400 Speaker 3: links and of course, my newsletter. I also really recommend 626 00:33:31,400 --> 00:33:33,320 Speaker 3: you go to chat dot Where's youreed dot at to 627 00:33:33,400 --> 00:33:35,760 Speaker 3: visit the discord, and go to our slash. 628 00:33:35,440 --> 00:33:38,600 Speaker 1: Better Offline to check out our reddit. Thank you so 629 00:33:38,720 --> 00:33:42,160 Speaker 1: much for listening. Better Offline is a production of cool 630 00:33:42,200 --> 00:33:45,000 Speaker 1: Zone Media. For more from cool Zone Media, visit our 631 00:33:45,000 --> 00:33:48,040 Speaker 1: website cool Zonemedia dot com or check us out on 632 00:33:48,080 --> 00:34:12,880 Speaker 1: the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.