On Google

This is a long, rambling diatribe that took me a couple weeks to write during odd hours. In that time it seemed that there was another major Google-related story every week and I kept coming up with new insights to add. What I really wanted to say is the stuff at the end.

We will find the drama of Google’s incessant machinations to be world-historical.1

All I mean is this: Google’s actions should be viewed in terms of a handful of oddly constituted “competitors”. Google acts the way that it does because Microsoft, Apple and Facebook each pose an existential threat to Google. That is, if any of these three competitors fulfills its strategic vision then the revenue faucet at Google (contextual online advertising) gets shut off completely, or else Google becomes a thrall to another corporation (the way that Yahoo! is in thrall to Microsoft now). This struggle is world-historical because it matters deeply which companies are in a dominant position and are able to steer the development of technology and technological practices. Who dominates can spell the difference between an Internet that is open, mostly free-as-in-beer and libertarian versus one that is proprietary, metered and closely monitored by governments and corporations. Is a world characterized by the dominance of Google better or worse than a world in which Microsoft, Apple or Facebook is in charge? Let’s look at Google and the respective strategic visions of its competitors:

Google

Google’s core business model has become so amorphous that it is in awkward forms of competition with Apple, Microsoft and Facebook. This is despite the fact that the only competitive ad network (supposedly Google’s core business) belongs to Yahoo!2. It helps to be reminded of what this market looks like (2008 numbers grabbed from Wikipedia):

Vendor Ad viewers (millions)
Google 1,118
DoubleClick (Google) 1,079
Yahoo! 362
MSN (Microsoft) 309
AOL 156
Adbrite 73
Total 3,087

Since then, Yahoo! and Microsoft have struck a deal to consolidate the Yahoo! and MSN rows above to combat Google’s overwhelming market share. It would appear, then, that the online advertising component of Microsoft’s vast enterprise is Google’s only actual competitor in Google’s core business. Yet Google acts as though the producers of operating systems, browsers, smart phones and social networks are their real competition. Why?

Microsoft

The competition: Microsoft is the traditional rival to Google and constitutes the most direct and intelligible threat to Google’s core business. Microsoft wants a larger share of online ad revenue, which requires convincing people to use their search engine. That they have to work at this goal is a source of frustration for Microsoft; this revenue should come automatically as a consequence of their strategic position as the operating system maker. They write the browser that everyone uses; its search bar defaults to their search engine; by all logic Microsoft should be able to funnel the entire web-browsing populace through its properties. Nobody should ever have to perform a search through Google. The fact that Google is synonymous with searching is a testament to Microsoft’s incompetence (and possibly their wariness after the antitrust cases of the 90s). No matter how unsuccessful it has been to date Microsoft will always keep trying to leverage its existing technological position to create a situation where users find themselves entering text into Bing’s search box rather than Google’s. Google puts its resources into Google Toolbar for IE, Chrome, Chrome OS and Android in order to make this technological position irrelevant. Microsoft can’t leverage its dominance in desktop operating systems if most web searches originate from Android smart phones or come from browsers that Microsoft doesn’t control.

The vision: Microsoft’s vision for the future is dirt simple and to a certain extent less sinister than other possibilities: Microsoft wants to make the software and services that everyone uses. They want to make money off this. They want to be the only people doing this. It’s not that they want to make beautiful software or they want to make crappy software; they want to make a hamburger that the whole world will want to eat for $2. Every other consideration is ancillary: if they can get away with embrace-and-extend, then they do that, if open standards is what is forced down their throats, then they do that. The key to understanding Microsoft is that they never pass up an opportunity to make money or to guarantee a continued revenue stream. If they are not charging for something it is because 1) the market has proved that you cannot make money off it anymore (i.e., it has been commoditized to zero) and 2) it is part of a strategy to make money farther down the line. This may not sound heinous, but this attitude dictates how they approach product development: can we sell seat licenses? No? Can we charge different amounts for Home, Pro and Elite editions? No? Can we sell an expensive IDE for it that we will offer for free to students? No? Can we use it to leverage a different area of our business? Okay, it’s free, but throw some tacky ads in. In other words, Microsoft is always giving away the razor to sell razor blades. Moreover, if the razor blades aren’t dull and rusty, it’s because there’s enough effective competition that Microsoft wouldn’t be able to sell razor blades otherwise. Microsoft is famous for making crappy products that get better through successive iterations arguably as a result of effective competition. They essentially use the market to find the amount of quality they should put into their products. In the same way, they use the market to determine the level of sleaziness they should put into their products. I lost all of my email from the late 90s because Hotmail disabled the ability to export emails and then deleted my account after a couple of months of inactivity. Microsoft wouldn’t be able to do this today, but only because of the competition from Gmail3.

Apple

The competition: Apple is a surprise competitor that Google actually made for itself. Apple and Google were friends. The Google integration with the iPhone helped make the iPhone a success. What happened is that Apple started acting like the shy guy who suddenly learns to assert himself: first they told the music industry how much a single would cost, then they dictated to AT&T the terms under which they would get to offer the iPhone and now they were telling Google what apps they could and couldn’t offer on Apple’s platform. As John Locke on Lost likes to say (over and over and over again), Don’t tell me what I can’t do. With its Android push, Google is on its way to making the iPhone a niche technology product (like Mac desktops) rather than the the industry (and street fashion) benchmark it has become.  Within the next year, the current norm that you develop an iPhone app and then you think about developing an Android app will most likely be reversed. This has to be seen as overtly aggressive behavior at Cupertino. In fact, Google’s move should be viewed in light of the other players in the smart phone space. Google knew that RIM, Microsoft and Nokia wouldn’t lag behind the iPhone in UI and functionality forever, and when they caught up they wouldn’t default to Google as a search engine. Apple’s careful tending of its App Store may have made sense in terms of preserving Apple’s reputation for quality but it also signaled that Apple was falling back into its comfort zone as a premium brand for people who like to pay to avoid hassles. There is a whole other segment of the population, arguably the majority in the US, who are the exact opposite: looking for bargains, willing to trade time for money, possessed of an innate distrust of meticulously crafted aesthetic experiences. Google had to create the Android platform to protect the smart phone space that iPhone created (the post-Blackberry space) from the next iteration of Windows Mobile, since Apple is culturally incapable of carrying the majority of technology users in the long term. And see how Apple is going after that platform, with a boatload of patent claims!

The vision: Apple is basically the same company as Microsoft, except Apple has its pride of workmanship. Steve Jobs: “The only problem with Microsoft is they just have no taste. They have absolutely no taste.” The difference is more about packaging and presentation than content. They want the whole world to be able to eat their delicious $3 burger, on their beautiful tray, with their well-designed cutlery, etc. Apple is smart about using open standards when they benefit them in their competition with Microsoft, but they are just as smart about shutting things down, creating and carefully tending sealed ecosystems of developers and users. What’s valid about the recent criticism of Apple’s corporate tendencies (re: the App store, the iPad, etc.) is the recognition that Apple ultimately wants the computing user experience to only consist of interactions sanctioned by tasteful, reasonable and well-intentioned corporate adults. They don’t want their users’ experiences to be sleazy, buggy, hacky or quirky. This vision of the future isn’t immediately horrifying: everything is aesthetically pleasing and works reasonably well. Just note that beyond a certain level of functionality, you pay for things. You pay for content. You pay to get a developer’s license. You pay to follow the prescribed path. You pay to have your experience, including the “apps” that are on offer, vetted and sanitized for you. If you live in Apple’s world you will be generally pleased with the overall quality of UI interactions, the soundness of the developer APIs and the opportunities for extending the desktop in various sanctioned ways. You will also be constantly aware of the areas in which the will of Apple is strongly present and incontrovertible: Don’t touch iTunes, we’ll just block you out with the next point release; Don’t touch the iPhone’s firmware, we have ways of making things not work for you after that; Don’t release embargoed news or we will bury you in lawsuits, 18-year-old fanboy. The freedoms of the Apple world should be familiar to anyone living in a modern liberal democracy; you’re free to do most of the things that you would normally want to do (as long as you have a baseline amount of money) but there are certain outre activities that will bring the full force of the leviathan down on your head.

Or: everything I just said as contained in this poetic and hyperbolic Tim Bray quote:

“The iPhone vision of the mobile Internet’s future omits controversy, sex, and freedom, but includes strict limits on who can know what and who can say what. It’s a sterile Disney-fied walled garden surrounded by sharp-toothed lawyers. The people who create the apps serve at the landlord’s pleasure and fear his anger.

I hate it.

I hate it even though the iPhone hardware and software are great, because freedom’s not just another word for anything, nor is it an optional ingredient.”

Update (3/29/2010): In the comments Robbie points out that the just-so story about Google launching Android over Google Voice doesn’t work with the actual timeline. He also clued me in to the awesome fighting words coming from Apple, with this killer quote:.

We did not enter the search business, Jobs said. They entered the phone business. Make no mistake they want to kill the iPhone. We won’t let them.

Facebook

The competition: This article is required reading for understanding Facebook’s competitive position. I remember4 when Prodigy first started offering Internet it was just another pane framed with Prodigy branding and ads, like you could either play some weird dungeon hack game or: the World Wide Web. Your choice. Somehow Facebook has taken us back to the days of Compuserve, Prodigy and AOL in terms of  creating a single point of access to all the wild, woolly information on the Internet. This has happened because people need access to controlled, walled-garden environments in order to find their friends and share with them but they don’t want to jump from site to site to do this. So the snowball effect went to Facebook, maybe initially just as a matter of aesthetics and the preppy instinct for networking. With the fait accompli of its success as an aggregator of social graphs, Facebook graciously offered to let the Internet come in out of the cold and provide content that would make Facebook even more sticky. The apps that are on Facebook are actually other websites that are designed to fit inside Facebook, often through “iframes”5. That is, Facebook literally frames the World Wide Web. As the article explains, a growing portion of web searches are going through Facebook (the Web results at the bottom of the search are provided by Microsoft). More importantly, Facebook is a major referrer to other websites; when you click on a link that a friend posts and get taken to a news site, Facebook is the referrer.  It makes sense that you should advertise on the site that sends traffic your way. In the past that has meant Google AdWords, but Facebook is considered to be attractive not just for volume of its traffic but for the attributes of those visitors; Facebook visitors are surrounded by friends, playing games, looking for diversions — they’re in a better mental state for clicking on an ad, and if they like your product they might just send some free advertising your way on the same network.

In short, Facebook is a horrifying, unfathomable nemesis for Google. Google’s stated mission is to “to organize the world’s information and make it universally accessible and useful” and after largely succeeding in this mission they have been rewarded with a situation in which millions of users are voluntarily withdrawing their most useful information behind Facebook’s walls, where Google’s ads aren’t served.

The vision: Facebook is a problem for the world because it is hugely important yet there is no profound vision. The vision is, Grow, Grow, Grow. Everyone in the boat. The final victory condition is when every single person in the world plus various fictional and historical personalities are on Facebook and there are no more outgoing links anymore … because there is nothing outside of Facebook. What’s worse, the Wired article reveals that the Facebook people6 think that they’re geniuses for basically reimplementing AOL:

Like typical trash-talking youngsters, Facebook sources argue that their competition is old and out of touch. “Google is not representative of the future of technology in any way,” one Facebook veteran says. “Facebook is an advanced communications network enabling myriad communication forms. It almost doesn’t make sense to compare them.”

It’s hard to express how ridiculous, mendacious and sinister this statement is. Let me run it again: “Google [an innovative and constantly improving search engine for finding other websites] is not representative of the future of technology in any way [because other sites are lame]. Facebook [one site] is an advanced communications network [it's a network with one point of failure!] enabling myriad communication forms [you can talk on your friend's wall or in your news feed or you can send email ... through Facebook ]. It almost doesn’t make sense to compare them [Yeah].” This statement expresses contempt for the idea of a company that merely wants to organize the world’s knowledge because, after all, the future is about owning, controlling and monetizing the world’s knowledge because all the discussions and social interactions  that produced the knowledge occurred on one’s property.  A meatspace equivalent of this concept of the future is the spread of private-public spaces, like this one; you’re out  in public in a nice, clean space, when you suddenly realize that all of this, the streets, the sidewalk, the street lights, all are privately owned. You might not mind the trade-off–freedom for convenience, safety and comfort generally makes a lot of sense–but how is it a measure of progress when more and more “public” spaces are actually privately owned spaces where you have to follow The Management’s rules? As the statement indicates, Facebook represents a future in which more and more communication takes place on one site and stays on that site. Obviously, Facebook wants to encourage this future, but it’s notable that  the speaker has contempt for Google for not explicitly pursuing this vision.

Google Again

You may have gathered from this analysis that I like Google. I admit to being a bit of a fanboy (Google Mail, Google Reader, Google Voice, Android phone; in a moment of insanity I even released to Google my vital statistics through Google Health) but I feel this misses the point. In this article I am not trying to argue that Google is good and Microsoft, Apple and Facebook are bad. This argument, moreover, has nothing to do with the technical merits of any of these companies; I really like Android OS and I run Ubuntu on my home and work computers, but I can see that the iPhone and Windows 7 are in many ways better engineered, more stable or more aesthetically put-together pieces of software. Google has a rather odd way of presenting itself and its software, a minimalism and lack of UI polish, that probably alienates many users who are instantly comfortable with Facebook.  I am arguing that either through accident or due to the idealism of its founders Google has aligned its interests with the interests of the open, participatory, distributed Internet, while these other companies have vested interests in … something else. In other words, Google by its nature as an Internet company and a congenital aggregator champions the open Internet; Google’s hegemony is an open Internet hegemony. These other companies are an OS vendor, a user experience maker and a social software connection factory. Their hegemonies are very different.

In Apple’s hegemony, for example, pretty much all media purchases go through iTunes. So it’s a market that’s run by Apple, and they take a cut, and they have a vested interest in making sure that all media is properly monetized. You can only synch iTunes with Apple products so they have hardware lock-in to their market. And they play cultural gatekeeper on all kinds of media and applications. This isn’t about the ethics or the legality of whether they can do this. Of course they can do this. This is about what would happen if Apple ruled the world. The answer is that the world would suck. As it is, Apple is pretty bad at holding onto market position in the long run (precisely because of its instincts for hardware lock-in and control), so we are free to praise their hardware and software and even to use their services (though I wouldn’t recommend it).

I would say that an Apple hegemony is not very realistic, if only because there will always be a significant portion of the population that feels alienated by Apple’s brand image. Some of us just don’t feel that clean. Likewise a pure Microsoft hegemony is not likely, because it turns out that the best operating system is made out of HTML, Javascript, CSS and HTTP, and Microsoft is absolutely incompetent when it comes to the Internet. A Facebook and Microsoft hegemony is more than likely; today it seems almost like a fait accompli. This article about Farmville contains the horrifying claim “Twenty-six million people play Farmville every day. More people play Farmville than World of Warcraft, and Farmville users outnumber those who own a Nintendo Wii.”. What is worrisome about Facebook is that it is built on network effect and the more that Facebook outpaces other networks the more that the network effect, rather than any other criteria of quality or innovation, guarantees its future dominance. Right now it looks like Facebook is a Katamari ball that is going to roll up the world, and once it does that there will be no pages left for Google to index except for Facebook’s front page (“It’s free and anyone can join”). More importantly, there will be no pages to serve ads on, and no advertisers willing to pay for tasteful contextual ads that don’t say “your Aunt bought this product. Why don’t you?”

Even if Facebook’s success wouldn’t lead to an absolute economic hegemony it could lead to the decline of Google. There is a feeling today that Google is growing too big and our (American? Western? Human?) leveling instinct is to wish for them to fall. There is even a rather twisted desire to see Google proven to be unethical and thus in hypocritical contradiction of its “Don’t be evil.” standard of conduct (twisted because all the world would gain is another unabashedly “evil” corporation, rather than one that makes highly relevant gestures like this one). There are a couple reasons why Google fading away doesn’t make the world a better place.

First, it should be clear that Google has already made the world a better place, or at least a cooler one. Gmail, Google Maps with StreetView, Google Books and Google Scholar, YouTube, Android — these things absolutely made the last couple years. Perhaps more importantly, Google showed the world how to do things in a different way– release your software in so-called “beta” so that you can crowdsource your user acceptance testing; create APIs and tolerant licenses for your services so that developers can mash up your service with their own independent offerings; make it easy for users to get data in and out of your services; demonetize entire industries and leave everyone to figure out how to make money in the aftermath.

Second, Google is an important political force in the world, both directly and indirectly. Directly, Google is usually on the right side of important issues relating to technology and civil society (from this article: “patent reform, copyright laws, digital books and open Internet access… Google also lobbied Congress, the U.S. Trade Representative, the U.S. Department of Commerce and the White House about international freedom of expression and online censorship”). Indirectly, Google is a major supporter of open source software through their many open sourced projects, the Google Summer of Code project and more recently their mass deployment of the Linux kernel in the form of Android devices. In addition, there is a kind of hands-off libertarian streak to Google’s policies that has influenced the world in a good way. I’ve always been impressed by Google’s stance that it won’t alter its search indexes to avoid offensive results. More and more, Google has come be an unlikely defender of the principles of free expression and fair use against states that can’t handle the radically destabilizing effect of the Internet (not just China, but supposedly liberal countries such as France, Germany, Australia and the US).

I will conclude this article with a third reason that the world would be worse off without Google. It may seem a bit obscure and technical but it strikes me as the most important, and I will devote more time to just this reason, cuz well it’s the most interesting to me.

Open Standards

Google is the great champion of open standards. Open standards may seem irrelevant from the standpoint of an end user, interesting only to a software developer like myself, but they are actually critical to maintaining a general atmosphere of freedom from heavy-handed systems of control. This is because the opposite of an open standard is an economic wedge that is used to create a situation of lock-in and compulsion.  Open standards are particularly important when it comes to any mode of communication. To understand the effect of not having open standards, imagine if there were many different kinds of telephone that could not talk to each other. You would either have to own many telephones or you would have to carefully coordinate with all the people you want to talk to so that everyone uses the same kind of telephone.  This is the actual situation we have today with IM, with MSN, Yahoo, AIM, Google Talk, etc. With technologies that involve more money and infrastructure there is usually a standards war early on in the commercial rollout of the technology. Perhaps the most famous and iconic of these standards wars is Betamax vs. VHS in the 70s (though people say good things about AC vs. DC). The thing is, the goal of a standards war is not to establish an open standard, but to arrive at a de facto industry standard. An industry standard can be something that only one company is legally entitled to make, because they own all the patents and IP on it, yet the entire industry depends on this product to function. With DVD, for example, anyone who wants to make a DVD player has to pay a company that licenses the software library used for reading DVDs.7 Once you win a standards war you have everyone else over a barrel.

Google has made a point of using open standards in its products. It should be be made clear: Google does this purely out of its own self-interest. Imagine, in the situation where there are different standards for telephones, that you arrive late on the scene with your own telephone. Let’s say Company A has 40% of the market, B has 30%, and several also-rans have the remainder of the market. Do you try to go in with your own standard and displace one of the other players? The problem is that Company A has the network effect; if you don’t like Company A then you’re probably using Company B; if you try to compete in a zero-sum way then you’ll just end up as another also-ran. How do you get market share when there are strong network effects in play and it’s too late to create an industry standard? You make the network effect irrelevant.  You say to all the other also-rans, “Let’s use the same standard. No one will own it. No one will license it. Anyone can use this standard.” You turn the remainder into a network bloc that is the same size as one of the larger players.

Google has done this most notably with Google Talk. Unlike MSN Messenger or AIM, Google Talk doesn’t run on a proprietary “Google Protocol”. Instead it uses the Jabber protocol, which is the same thing I use at work.  I can connect to any Gmail account from my work IM and vice versa. The voice chat component of Google Talk is also an open standard (unlike Skype’s). More recently, Google has been promoting its slightly weird Google Wave as an open protocol that anyone can implement. That is, they are offering to establish an open standard even before anyone has claimed this space of hybrid IM/email. They’ve done this in part because they want to make sure that Wave succeeds as a technology and not just as a product. Novell has already bought in, thus helping to increase the chance that weird hybrid IM/email will succeed as a technology.

I was inspired to write this entire article because of something that I saw when Google Buzz rolled out. Google Buzz was not in itself a particularly exciting offering from Google. They added a section to Gmail that shows a stream of items from your friends, initially determined as your most frequent contacts, plus they have their own geo-tagged Twitter/facewall thing that I have no reason to use. The most important aspect of Buzz is that the items, which can all be commented on in Buzz, can come from multiple sources: Twitter, Flickr, Youtube, etc. These are the default options for sharing, but you can actually add anything that has an RSS feed to your list of sites that Buzz publishes updates for, provided that you have to ability to “claim” it as your own. So for example, this here site stupididea.com is part of my Buzz profile, and when I publish this article on my blog, an update will go out to all the people subscribed to me.

Minor Digression

Here’s how you syndicate your own blog through Google Buzz. First, edit the html of your blog theme and put this tag between the

<head>

and

</head>

tags:

<link rel="me" type="text/html" href="http://www.google.com/profiles/your.username"/>

So in my case in the WordPress theme for http://www.stupididea.com I put this tag:

<link rel="me" type="text/html" href="http://www.google.com/profiles/tristil"/>

Then you have to edit your profile through the edit link that is displayed next to your name on the Buzz page.

Add Link to Google Profile

You have to make sure to click the checkbox so that Google knows that this page is “about you” rather than just a page you like. Finally, to make Google pick up your site right away you can use this site: https://sgapi-recrawl.appspot.com/.
You should then see something like this:

Connected Sites

End Digression

It’s not the easiest process, but what I really want to point out is how Google is building both technical and conventional openness into its Buzz platform . In technical terms, Google’s use of the XFN open standard (the rel=”me” in the tag above) makes it easy for developers to create sites that can hook into Buzz. There’s no developer account signup with a dedicated key or anything. In terms of conventional or effective openness, Buzz is doing things differently than Facebook. Instead of inviting other sites to set up shop within a walled garden, they’re providing a way for sites to keep users updated on their content within a single interface so that they will remain attached to those outside sites. This may seem like a nothing difference, but think of it this way: with Buzz’s Flickr connection the idea is to keep you apprised of what’s happening on Flickr, since you might not check it that often. Google Buzz probably increases traffic to Flickr. Buzz’s Twitter connection means that people who can’t be bothered to be on Twitter see the tweets from their friends, etc. This is the opposite of Facebook’s strategy, which is to create a space for content that will make Facebook itself more sticky. They want you to view your pictures inside Facebook galleries, to comment on them within Facebook and to share them on to other Facebook accounts.

To be honest, at the moment Google Buzz isn’t much different from other aggregator sites like Friendfeed. To understand what’s actually cool about Buzz you have to look at what Google is planning to do with it. On the Buzz API documentation page toward the end there is this description of what’s to come:

Over the next several months Google Buzz will introduce an API for developers, including full/read write support for posts with the Atom Publishing Protocol, rich activity notification with Activity Streams, delegated authorization with OAuth, federated comments and activities with Salmon, distributed profile and contact information with WebFinger, and much, much more.

All those terms refer to open standards for technologies that allow Google to achieve a counterintuitive goal: they remove Google from a position of absolute control and open up possibilities for other sites to continue to exist and thrive. Each of these technologies describes a way to distribute the control and authority over a social software network. The ones that are particularly interesting are Salmon and WebFinger. With Salmon the idea is that comments are maintained between Google Buzz and the actual blog post that is being commented on as well as any other site that is using the Salmon protocol. So for example if people are interested in this blog post, at present they may choose to comment on it through Google Buzz or directly on my website. This kind of sucks for me, because now people are commenting in two places, and if most of the comments are in Google Buzz it may look like no one is interested in my post. If I were making my living off this, I might feel that Google is stealing my oxygen, by letting people share my blog posts and then annotating them up in the Google cloud. So something like Salmon is a way for Google to contribute back to the site that contributed the content, and also to allow another aggregator-type site to consume and contribute back in the same fashion. Through this technology, Google, the content sites, and the other aggregator site are placed on the same level, so that competition is based on feature implementation rather than a power position. In a similar fashion Webfinger is a way for Google to allow other sites to put their users into the same mix of people as Buzz without simply signing their users up for Google accounts. Some weird also-ran social network like Bebo or Badoo can connect its users to Buzz without ceding its “ownership” of those users. They could even bring the Buzz technologies into their own site so that they won’t lose any of their branding or web impressions. It’s not clear how Google will manage this, but in general they are unlikely to care, because every such use increases Google Buzz’s network effect.

Google is in this game for network effect, and in particular their goal is to destroy Facebook’s current ungodly influence over users and content producers. They will sacrifice their own chances for a market power position in order to achieve this goal. This is because 1) they know it’s too late to beat Facebook at its current game and 2) they don’t actually want to run something like Facebook. The fundamental truth about Google is that they don’t like managing things. As much as Google keeps growing, they don’t want to have to hire on a huge number of mediocre employees to watch the plantations, to moderate content and issue bans. They only want to hire the brightest people in the world to make the software that aggregates the content that other people produce. Because as much as Google appears to be something else Google is still an Internet ad company. Everything else they do, as abstract and seemingly unrelated as it is to this core business, is actually about the ads. Google is forever like the US during the cold war, fighting a war in Southeast Asia to deter an attack on West Germany. The good news for us is that this means that Google is fighting for the open Internet, not out of any particular altruism, but because only the open Internet can provide the huge year-on-year revenues that Google has enjoyed up till now.

Finally, then, what’s so special about the open Internet? Why should we care? There is a whole other meandering blog post in this question, but I’ll simply conclude with this formulation: the open Internet is a good because it is uncontrollable. The open Internet has low entrance costs. Facebook came to power through the open Internet, not through a cooperation deal with the phone company or through the blessing of a government. An Apple, Microsoft or Facebook Internet is a controlled Internet. There are still opportunities there but there is also a collar around your neck. The Internet isn’t about signing terms and conditions documents to get going. It’s not about living within a single clean white frame.

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  1. World-historical is a pretentious phrase that means “fundamentally influencing the trajectory of history”. For example, the German philosopher G.W.F. Hegel saw the French Revolution as world-historical because it was “about” the effective end of aristocratic power. Even if the revolution partially failed the effect was to demonstrate to all of Europe the power of the masses to topple monarchs. Today we could say that the 9/11 attacks were world-historical because they caused the US to spend the next 10 years defining how issues of international cooperation, security, projection of military force and treatment of non-state combatants would be approached in the future. [back]
  2. Yahoo! by itself has not been an important player for a long time, since its core concept has always been “portals”[back]
  3. In more recent and more petty news, I have two Xbox 360 hard drives, but if I want to import my saved games from my old drive I have to delete the saved games I’ve put onto the old one[back]
  4. because I’m old[back]
  5. if you want to see where an app is really hosted you can sometimes right click in the main area of the app and open the iframe  as a new window[back]
  6. or this one anonymous “veteran”, who I’m going to beat up on a lot, because what he says is so emblematic[back]
  7. You can actually go to jail for trying to figure out how to read a DVD on your own.[back]
  • http://rpollack.net/ RP

    I agree with most of your analysis, but your Google fanboyism is nowhere more apparent than a short-sightedness on Apple. (Disclosure: I'm in different ways a fanboy of both.)

    I don't know what it means to “[carry] the majority of technology users in the long term,” (what's the long-term with consumer electronics and Internet technology?) but consider that Apple introduced an mp3 player in 2001 (maybe you've heard of it?) to a resounding “meh” from the usual chorus of tasteless dweebs (“come on, less storage than a NOMAD, and no wifi?”), and almost nine years later it enjoys by most estimates something between 2/3 and 3/4 of that market.

    Also consider that Apple's market share in desktops and laptops, which appears fairly trifling, jumps to an easy majority (by some estimates 2/3) when looking at systems priced above $1000. And that it is growing, frequently by double-digit percentages year-to-year. And that it has reached ubiquity-levels in certain demographics (including the very desirable: young, affluent, educated).

    Also, your shy-guy-gets-pushy-with-Google chronology is suspect: the Voice app was rejected last summer; Android was announced in late 2007, a few months after the iPhone hit the market. As Jobs was recently paraphrased (from an internal meeting): “We did not enter the search business, Jobs said. They entered the phone business. Make no mistake they want to kill the iPhone. We won’t let them, he says.”

    To say that Google is on the way to making the iPhone a niche product, that “[w]ithin the next year[!!!], the current norm that you develop an iPhone app and then you think about developing an Android app will most likely be reversed,” seems to me downright crazy, like I-would-bet-large-sums-of-money-against-it crazy. The next year? Google is making a huge push (reportedly even doing ad revenue sharing with carrier and handset partners), and is MAYBE going to MATCH iPhone unit sales this year. MAYBE. Apple has a pretty big head start, and depending on what improvements they unveil this summer, could get a big bump, as they usually do. (Be wary of statistics showing an Apple lull in the spring; we all know when new products are announced.) Apple also has an advantage in that an iPhone is an iPhone: Android phones are variously branded and have various hardware, which is a marketing problem and means no performance guarantee.

    It may be the case (in fact, I hope it is) that in the next year or two the iPhone will no longer be the de facto mobile platform for all development—but it won't be in Android's current position of afterthought either. I think the most Google-bullish possibility is that both will be vital platforms, maybe skewing differently for different demographics. Google has done something really remarkable (and beneficial) in fairly rapidly making the iPhone no longer the ONLY player in this market—but they aren't taking users away from Apple, and they also have demographic disadvantages (about 3/4 of Android users are male, according to Admob; and the iPod Touch (i.e., iPhone OS) has 2/3 of the market on under-18-year-olds).

    The best take on Apple usually comes from Gruber; I don't want too many links to send me to a SPAM bin, but two brief and worthwhile reads are:
    On Android: http://daringfireball.net/2009/08/the_android_o
    and
    On the rivalry with Google: http://daringfireball.net/2010/03/generals_war

  • method

    By “[carry] the majority of technology users in the long term,” I mean be the default option, the way that IBM was the default option and then Microsoft was the default option. You're right that iPod is the default option for PMP, but the iPod is a strange product in that in order to make it successful they had to make it available on Windows. It doesn't necessarily lead to a Post-MIcrosoft world; it just makes Apple into a PMP manufacturer.

    You make a point about how Apple makes a lot of money by selling premium products to a lot of people, more than if they sold many more products at commodity prices. I'm only talking about installed bases, not revenues; I doubt Google has turned a profit selling its Google Experience for Android devices. Desktop Mac OS will never able to dictate technology standards, because it only targets a relatively narrow demographic and refuses to formulate strategies for going after other segments. Apple is simply okay with this; remember how Jobs' first act after returning from his wandering in the desert was to get rid of all the iMac clones?

    The iPod and the iPhone are unique in Apple's history because they went and seized most of the market. This is a high-water period for Apple where dominance is within reach, but their corporate DNA won't allow them to secure it. They do things like build a successful music store, but then they block other music players from synching with it. They make this awesome phone that has this incredible cultural cachet, and then in the US they make sure that most people can't buy one. Then as they watch their position slowly or not-so-slowly erode they respond in petulant ways: they try to block music distributors from cutting deals with Amazon or they try to sue HTC out of existence.

    I think that the prediction about Android gaining the majority this year is less crazy than you think, as in I-would-bet-some-money-on-it. I do admit that I was reading the adMob numbers from this link (http://androidandme.com/2010/03/news/android-bo…) wrong. I didn't see that the impressive numbers only referred to the US market. Still, the momentum is all with Android, because it has multiple options, lower pricing and is available on every carrier. Droid had a *huge* impact on the mobile market and that was all added in the last half year. There are other phones coming out on other carriers that are going to be pushed just as hard as Droid. A lot of these phones are going to be marketed like the myTouch, as devices for people who haven't owned smartphones before, and there are Android handsets that are only being marketed in China, etc. In that respect, iPhone's potential market may be saturated, with only room for upgrades (obviously I'm just speculating).

    Even if the year prediction is off there is no question that there is a qualitative change happening. It used to be that “business phone” meant a Blackberry and “phone that lets you do more than read email” meant iPhone. The “Droid Does” campaign was aimed at changing that basic perception.

    Obviously, the shy-guy thing appears to be off, although Google probably started throwing more resources at the project after Google Voice. I put an update into the blog post, plus I added those links about Jobs. The first Daring Fireball link seems pretty dated. It's written before the Droid released with the new fancy 2.0 firmware, and the advice is like the advice an enemy would give: “So aim high, and set your goals such that you can smugly claim victory with just a fraction of Apple’s unit sales. If Apple is BMW, you can be Porsche.” Instead the Droid commercials said, everyone who wants an awesome phone, buy this one.

  • pollack

    Again, I think I'm inclined to agree with your overall analysis (and your sympathy for Google/Android), while also thinking you're under-analyzing and underestimating Apple.

    You write, apparently as an illustration that Apple's “corporate DNA won't allow them to secure [market dominance],” that they built a “successful” music store BUT went on to block non-Apple hardware from using it. Well, going on a decade since launch, that music store has been more than merely “successful”: Apple today is reportedly the largest music retailer in the world. Not just the largest online retailer. Like, surpassed Wal-Mart and kept right on growing. From a competitive/philosophical stance, you and I might prefer that they played nice with off-brand devices, but it sure hasn't hurt them that they haven't. (And those off-brand devices make up, what?, 1/4 of the market?) They are nothing if not the “default option,” and what's really remarkable is that they established this position when the only prior “default option” was piracy. And all along, they were doing it despite (I might argue BECAUSE) of the very corporate swagger that you find so distasteful, dragging the recording industry kicking and screaming the whole way. Recall that when all the groaning about their DRM reached its high point, Jobs posted an open letter to the front page of apple.com saying, Yeah, we think the DRM sucks too, but the labels won't let us sell their music without it; several of those labels responded in “petulant ways,” going DRM-free with Amazon and other online retailers, while sticking Apple with DRM for as long as they possibly could. Nevertheless: still the biggest music retailer in the world.

    This isn't to say that I think they'll hold onto that position forever. I'm just not persuaded by your cultural-incapacity/corporate-DNA argument.

    Your other example is making an awesome phone and ensuring that most people in the US can't buy one. I'm not sure what you mean, unless you just mean the AT&T exclusivity; and certainly everybody except AT&T is in agreement that that deal sucks. There are plenty of indications that Apple too is dissatisfied with that arrangement, not least of which that the iPad was announced with surprisingly inexpensive and come-and-go-as-you-please no-contract plans. The WSJ printed rumors just today that Apple might be making a Verizon iPhone for the fall quarter. I think everybody expects exclusivity to evaporate just as soon as legally possible. I suspect it was only there to begin with because Apple was fundamentally changing the way equipment manufacturers deal with carriers, and they had some non-negotiables that would require some serious commitment from a partner. Surely it's not part of their “corporate DNA” to be beholden to another entity, or to suffer so much from its incompetence, so I think the relative unavailability of the iPhone was a pragmatic concession.

    I also don't understand how you could argue that they are “watch[ing] their position slowly or not-so-slowly erode,” when clearly their position is not eroding by any non-relative metric: only a relative decline in market share (coincident with absolute growth) in a market that they created, where they enjoyed a long period with no real competitors, and which is probably nowhere near saturated. In other words: obviously Apple sees a potential threat in Android, but the threat is right now purely potential, as there's still plenty of room in this new market for Android in addition to Apple: iPhone unit sales are not eroding— they are continually growing. Nor am I aware of evidence of any but negligible numbers who are switching FROM the iPhone to its competitors; in fact most publicized accounts of such switching are followed shortly by a switching-back. I suspect that most Android users so far are people who won't go to AT&T, people who want a cheaper phone, or people who are averse to Apple in general and were just waiting for a non-Apple phone that could compete. Which is to say, people who wouldn't buy an iPhone. That's not meaningful erosion; it's a wide and open market that Apple created and that no one is likely to occupy alone.

    As for Android gaining the majority in the next year, I actually wouldn't bet against that; I thought you were making a rather more extreme claim. I was taking you literally when you wrote: “the current norm that you develop an iPhone app and then you think about developing an Android app will most likely be reversed,” and thought your were saying that in the next year Android would so dominate the market that development for the iPhone would be the sort of secondary consideration (perhaps not even pursued) that development for the Android is now. That's what I thought was crazy. If you just mean they'll reach 51% market share, well, I wouldn't count on it but don't think it's impossible either, and I would welcome it as an overall excellent state of affairs. I'd like to see Apple loosen its grip on app approval and think not much else is likely to make it happen but exactly that sort of pressure, which pressure is currently negligible.

    (And it's a quibble, but in my view the Droid commercials did not say, “everyone who wants an awesome phone, buy this one,” but something more along the lines of, “iPhones are for pansies and effeminate men, Droid is for real [heterosexual, badass, etc] men.” All of the ads I saw were brazen; some of them were unconscionable. Which presumably contributed to Android's demographic problem.)

    And lastly, I wasn't really trying to make a point about Apple's revenues (though that's valid one, too); I was actually talking about installed bases, as you were, but emphasizing not just the simple numbers but something of the context to those numbers, or to the particular situation of the installed bases.

    I think the typical Apple-hater line about its being a company that produces “niche products” for a “narrow audience,” and the typical Apple-fanboy line about their being “premium” or “luxury” products, like the BMW or Porsche of personal computing, are both similarly misguided and misleading.

    I mean, those words have pretty broad meanings I guess, so they could all be literally true. You could call cable TV a niche product; or HBO; or ESPN Tennis or something. “Niche” is a relative term. Likewise, the tea I buy is called “premium” because it costs 2.25 an ounce instead of 1.50, or because it comes in tins instead of individual bags. But we're not talking air-conditioned seats, here.

    What I'm saying is that buying a >$50,000 car is not analogous to buying a >$1,000 computer; and in the latter category Apple is either competitive or utterly dominating, depending on whose estimates you listen to. Yeah, the vast majority of computers sold are Windows PCs, so you've gotta make your websites compatible with IE6 or whatever. But Apple exerts an influence that is wildly out of proportion to its barely-double-digit (or less) desktop market share, and to understand why you have to understand the distribution of the market. A huge portion of those Windows PCs are basically junkers, sold to companies or to schools to fill out cubicles or computer labs, or are bargain-basement junk bought for the kids' room in a 3 or 4 computer household. The BMW-of-consumer-electronics line creates a self-congratulatory and fictitious aesthetic elite; the niche-product-for-people-who-can't-be-bothered line attempts to marginalize a deeply influential company that makes products with a very broad appeal.

    I'm totally with you in preferring that Google dominates the Internet. I think you're right-on about the unusual way they've aligned their interests with the Internet's. But it should also be said that they produce a ton of junk for every great thing they do, and also routinely ride roughshod over issues of privacy and information-ownership. Apple has a destructive obsession with control, but they also have an uncanny ability to see what matters and what doesn't, and to redefine the way people interact with machines. I think it's fairly clear how their failures are married to their strengths.

    It's instructive to look at the claims of skeptics at pivotal moments. In the case of Apple it's a fairly humorous parade of commentary about the madness of shipping computers without floppy drives, of the iPod being a technologically inferior novelty, of iTunes being doomed any day now, of the iPhone being all hype and surely a boondoggle. Those claims all look embarrassingly shortsighted now. Conversely, look how the tune has changed on Google Wave; which went from the twitter/facebook/everything-killer (a few sheepish voices: “I don't get it”), to, well, it's technologically cool, and totally open. Yeah, it sure is open.

    Okay, I'm rambling, and I need to go to bed— my main point, if I actually have one, is that Google and Apple are both for-profit companies, both opportunistic, both motivated by making money and self-preservation, but both also strangely committed to a peculiar ideal: Google to a notion of information, its importance, its power, and the way it should be handled; Apple to an aesthetic experience of the machine, and to a particular relationship and a particular mode of interaction between man and object. Both companies may be prone to do stupid and/or destructive things in service of these ideals, which is strange, and also maybe admirable. Google's particular commitments make it generally better for the Internet; Apple's make it generally produce vastly superior products. The world would be worse off without either one of them, and I'm rooting for both.