With “Search Plus Your World,” Google finally tips the hand it’s been holding since the summer.
Eric Schmidt said it clearly enough from the beginning: Google+ was never really about social networking; it’s a data-mining project. The goal was to break the back of Facebook’s monopoly on our personal information — to coax us into telling Google whom we’re friends with, what we like, how we spend our free time — so that Google could do what it always does: improve its search product and improve its ads product, the company’s core businesses. From a business perspective, search and ads are almost all that matter, and Google believes (rightly, probably) that adding social data will improve them both.
One reasonable question in response to this might be: Is creating a trojan horse Facebook clone like Google+, in order to harvest our personal data, so that Google can improve its search product by displaying photos of our friends’ dogs, a desperately simple-minded plan that’s bound to fail? Well, probably yes.
But there’s another, harder question roiling around the internet: Is doing this “anti-competitive behavior”? M.G. Siegler writes:
This is the type of case that Senators die for. Google wrapped it in a bow and placed it in one of their laps.
Most of the broader antitrust concerns against Google are bullshit in my opinion. You can argue that they have a monopoly on search, but it’s a natural one. They’ve earned it. They’re simply better at search than their competitors. This has always been true. It remains true.
But when they use that natural monopoly to start pushing into other verticals, things get gray. Travel, restaurant reviews, etc, etc. We see more of it each year.
But this, at first glance, seems decidedly worse. Google is using Search to propel their social network. They might say it’s “not a social network, it’s a part of Google”, but no one is going to buy that. They were late to the game in social and this is the best catchup strategy ever.
In the words of HBS Professor Ben Edelman, Google is engaging in “classic ‘tying’ behavior.” They’re using their natural monopoly on search to give unearned attention to their social networking site. This isn’t the first time Google’s done this either, according to Edelman.
By all indications, free traffic from Google Search has played a valuable role in launching many Google businesses. For example, Google Maps usage remained sluggish until Google started to present inline Google Maps directly within Search Results, a practice that began in earnest in 2007. As Consumer Watchdog’s 2010 “Traffic Report” shows, this change precipitated a sharp increase in Google Maps’ market share: Traffic to Google Maps tripled while traffic to competing map sites fell by half.
I can’t know what’s in Google’s heart of hearts, of course. And needless to say, I’m no expert on antitrust laws. But Edelman’s analysis is predicated on a conception of Google’s strategy that seems utterly wrong.
It’s simply not believable that Google would hamper their core search product in order to hand out a subsidy to their fledgling maps product. What’s the end game there? They were, in all likelihood, doing the reverse of this — using maps to help search. Indeed, you could retell the story of Google’s entire product line — the story of everything they’ve done for the past decade, almost — as the project of amplifying the power of search. Its books indexing efforts, its blogs search, its local reviews site Places, its news aggregator and now, its social data: who cares if these sundry properties succeed as stand-alone apps? Google’s goal isn’t to run an apps empire; it’s goal is to organize all the world’s knowledge. The play is for data, not impressions.
Figuring out how to control data that affects search quality is strategy 101 for Google. If they didn’t control the data themselves, they’d be dependent on the whims of the market to call it forth and then on the whims of business negotiations to access it. In the case of social data, where there is plenty of it out there already, it was this latter step that broke down. Twitter simply chose to prevent Google from displaying their data. So Google, as a hedge against precisely this outcome, built an alternative. They called it Google+. Now they display that on search instead.
What’s anti-competitive about that?*
I full-heartedly agree with Matt Yglesias’s claim that progressives should dwell less on “taxing the winners in our economy and transferring their money to the losers,” and more on programs designed to make our markets more fair. The goal of the left is to enable ordinary people to live free and creative lives. Tax and transfer is — and historically, always has been — a poor substitute for this more radical change. In a progressive agenda with the goal of making our society more susceptible to restructuring by its citizens, the government’s key role shifts from “taxing-and-transfering” to disentrenching abusive power and making sure our institutions are open to participation by the public they affect. In the context of free markets, that means a commitment to “busting trusts” and keeping competition dynamic.
But the silly arguments that Google’s fledgling attempts to integrate social data into its search results represents an offense punishable under anti-trust law is a good rebuke to the TR-style progressive: in short, sometimes you just don’t know what you’re talking about. The danger of intervention is ignorance.
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*If anything, as Dave Winer argues, Google’s failure to implement its social data alternative correctly is breaking their monopoly power, rather than entrenching it.