I played with a number of titles, including “How Google Is the New Standard Oil,” “Google the new Slave Master,” and “Should Google be Nationalized or Regulated?” I chose this one because it would both get your attention and address the fact that Google is taking advantage of all of us, no matter how powerful, except those who live in Turkey and China.
The question I’m really asking is framed by that last title choice. However, given that Standard Oil, the initial example of this behavior in the U.S., was apparently as close to the government of an earlier era (some believed Standard Oil effectively owned the U.S. government) as Google may be to this administration, I thought the title I chose was the most appropriate.
I think Google was the first to find a new oil-like commodity and is using that knowledge — and our collective ignorance — to take advantage of us, much as Standard Oil did decades ago. Could it be that we, the people of the world, are this century’s ignorant and exploited, and Google is taking advantage of us? Now that we can see the value, should it be nationalized or at least regulated to share the wealth it is data mining from our lives and employers? I’ll explore this.
Oh and before I continue, Google’s lobbying arm in Washington, D.C., (not a fan) has been telling reporters when I point out Google’s abuses that I work for Microsoft. That is misleading; Microsoft is a client, but it had no more influence on this column then it did on last week’s column on a Manchurian Candidate in Microsoft — which is to say, none. In fact, the idea for the column didn’t occur to me until I was told about this political mudslinging group and how powerful it was becoming (note, the link is three years old — it is much more powerful now).
I’ll close with my product of the week: a business desktop all-in-one that anticipates the next generation iMac.
Personal Information and Content Are Oil-Like Commodities
There seems to be a repeating pattern as new commodities are developed. Initially, with a new valuable commodity, someone figures out the value early and takes advantage of everyone else. Then, as developed countries catch on, they take advantage of less-developed countries until everyone finally figures this out and protects themselves.
Oil for the Americans and Arabs, land for the Native Americans, and diamonds for the Africans are all examples of this. In each case, the folks that initially controlled the resource either sold that control incredibly cheaply or had it stolen from them until there was some kind of balance and a more even arrangement could be negotiated.
Google mines your personal information and other people’s content and makes a massive amount of money from its efforts.
Smart Trumps Stupid
Last week, I was thinking of the purchase of Manhattan Island for US$24, comparing that to what Google does to us — but since then, I’ve found a piece that suggests that Peter Minuit, the guy who purchased it, may have been ripped off, so I won’t use that one again.
However, the underlying concept — someone who understands the value of something taking advantage of someone who does not — is very common. In fact, the tech industry as we know it was founded on this concept. Both Apple and Microsoft benefited from the fact that Xerox PARC had no idea of the value of a graphical user interface or a mouse, and two of the richest and most powerful companies in the world still live off the ideas that they took from Xerox.
Microsoft bought DOS for around $50K and then sold the rights to IBM for the same amount and basically built the company on the back of the folks that developed DOS because they didn’t know what they had. We can likely go down a list of stupid people we can laugh at, but what if I added you or your government to that mix? What if I told you that Google is doing the same thing to you that Apple, Microsoft, and a ton of companies did to other firms thaa were too dumb to know better? Still funny?
About 97 percent of Google’s revenue and profit comes directly or indirectly from advertising, according to one of the analysts I was traveling with last week. This means the folks who advertise are Google’s primary customers. What does Google sell to these advertisers? It sells access to your eyes, profiles built on your buying and browsing habits, and the right to buy words (as BP just did) to change your perceptions. It does this by providing you with access — largely to things individuals create and are often not paid for. In short, Google gets access to your personal information by providing a variety of things it gets from folks like you for free.
In effect, much in the way BP mines oil, Google mines the virtual you. Does Google understand what it’s doing? I think it does. Take, for instance, Cnet’s original complaint that Google was exposing too much personal information more than a decade ago. It resulted in Cnet’s being blackballed by the company, suggesting Google understood the value of what it was taking and objected to someone else taking it away. Google went to extreme lengths to protect for its own use the very information gets from you for free.
In all cases, doesn’t this suggest that Google recognizes it is mining a valuable asset from the citizens of the world? Try to find the same information Google has about you — a picture of your home, its value etc., by googling any of Google’s founders. They clearly recognize the value of what they are taking, because they prevent anyone else from mining them while they mine us. But there’s a stronger example.
If you have a regular employment contract or agreement, there is likely a clause that says anything you create while working for the company belongs to the company. Folks who, while working for a firm, create something interesting often fight this clause. (In some circumstances, it may belong to you, but nowhere does the law say it belongs to Google). However, when you are browsing on the Web, you create information about both you and the firm you work for, depending on why you are searching for that information. The monetary value of that information flows into Google — not to you or your firm.
You generally couldn’t work for Ford while working for GM — yet apparently, you can work for Google while working for Ford. You could actually work for Google while working for Apple — no wonder Apple is using Bing now. But doesn’t this sound like exploitation — in this case, of us? Shouldn’t we at least get to see the inside of that 767 our personal information paid for?
Isn’t that Just Advertising? Nope!
You might argue this is how advertising works, but you’d be wrong. Advertising — before Google — was based on the idea of paid entertainment drawing you in so someone could pitch to you. In the pre-TiVo era, the advertisers paid for the content, and what they got back was your attention (unless you took a snack break). That model was relatively balanced: The stars, writers, producers, networks and publishers, etc., lived in harmony with the ad agencies. Information on you was generally captured through research groups like the Nielsen families or studies where the people being studied were paid.
With the rise of Google, that model has been corrupted. Google generally goes directly to content (mining it). It doesn’t fund it, but it profits from the advertising it gets by providing access. It does sell directly to folks who want to pitch you, but it rarely funds content, and it certainly doesn’t pay you for the information it extracts (mines) about you.
It isn’t an advertising model — it is a commodity model. Your personal information and the information others create on the Web are the commodities that are being sold. I actually do see this as a form of slavery, but I thought the title choice using that word was too inflammatory.
Wrapping Up: Does China Have It Right, and Should Google Be Nationalized or Regulated?
I think we have reached a point that occurs with pretty much any new resource. Someone — in this case, Google — has figured out the value of the resource, but the people and the governments of the world haven’t yet grasped that it is their resource and their commodity that is being stolen, er, mined. As a result, they are letting Google mine it in exchange for the equivalent of trinkets and normal income tax revenue.
There is little oversight and no apparent effort to make sure the people or nations providing this commodity are both adequately protected and adequately compensated as they would be if this were oil, diamonds, or some other commodity mined off public land. At some point, I expect someone in a government is going to have an “ah hah!” moment and this will likely change dramatically. It’s not as though any government has the funding to allow any company to mine a national resource without paying for the privilege these days.
So, if I’m right, and Google is mining for free a national resource, should it now be more heavily regulated and charged like those mining oil and gas, or cutting down trees in public lands? Or, given that it is taking from all the citizens in a given country, should it instead be nationalized?
China, the country that is expected to replace the U.S. as the world superpower this century — just as the U.S. replaced Great Britain last century — effectively kicked out Google because it refused regulation, and it has nationalized search (the government owns a controlling interest in Baidu, the largest Chinese search offering).
Is there a third choice? And when do you think that will happen?
Product of the Week: Lenovo ThinkCentre M90z
As some of you know, I was a big fan of the second-generation iMac and hate the current generation because it feels like an ergonomic step backwards. Having had to spend a lot of time in therapy, thanks to using some poorly designed workstations a few years ago, I’m now a big believer that monitors should be height-adjustable and that using books or stands instead is lousy design work.
In addition, at the All Things D conference, Jobs alluded to a coming iMac that would be much closer to the iPad and include touch. The new ThinkCentre M90z from Lenovo anticipates this, because it has touch. It also has a variety of optional mounts tha provide the ergonomic adjustments I (and you should) require.
The one product that the ThinkCentre group had that competed on design with Apple desktop hardware was the old X series all-in-one desktop. This product won design awards in the 1990s and, like the Apple products, made it in to the Smithsonian as an example of engineering excellence.
The M90z is the rebirth of the X series, updated with current Intel i3 and i7 technology, a host of features, and an updated industrial design.
One feature is a physical switch to turn off the built-in video camera, which is something that came out of an Apple video-conferencing study of Apple employees in the 80s and was never implemented by Apple (I’m not kidding — I reviewed the study).
Apple, to a large extent, went back to its past to create a better future. Lenovo seems to be following that example with the M90z, and as a result, it is my product of the week.
Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.