Better Offline - How Google Cheated Their Way To Billions

Episode Date: September 6, 2024

In this episode, Ed Zitron walks you through how Google used their monopolies over search and search advertising to scam advertisers - and why the entire tech industry should demand that Google is broken up and forced to compete like the rest of us.  LINKS: http://www.tinyurl.com/betterofflinelinks  Newsletter: wheresyoured.at  Reddit: http://www.reddit.com/r/betteroffline  Discord: chat.wheresyoured.at  Ed's Socials: http://www.twitter.com/edzitron  instagram.com/edzitron  https://bsky.app/profile/zitron.bsky.social https://www.threads.net/@edzitron See omnystudio.com/listener for privacy information.

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Hello and welcome back to Better Offline. I'm your host at Zittron. Of course I am. In the last episode, I went over why Google's monopoly is such a problem and why monopolies are a form of societal cancer. And in this episode, I'll go over what my app and next to Google after our antitrust trial. And by the time you hear this, it'll have been a few weeks since Judge Yat META

ruled that Google was an illegal monopoly in search and online apps. advertising. The next phase of this saga, though not including any appeals, will decide what penalties will come. Although it will be several months and most likely several years before we learn exactly what happens to Google, it's clear the company sits on a dangerous precipice. In addition to a monetary penalty, which is fairly likely, and which could certainly be in the billions of dollars, Judge Meta will likely force Google to undertake some action that would effectively end its monopoly status, or at the very least support more competition. And we'll get to those in the second, but it's worth noting that we need to talk about how we got here.

For this, I'm going to be heavily relying on Judge Meta's 300-page ruling. Judge Meta didn't concern himself with how Google got big, because in antitrust law, there's nothing really prohibiting you from achieving dominance by being good and better than the competition. And to be fair, for the first couple of decades, Google was genuinely superior to any alternative. This was evidenced by its early reviews, with Danny Sullivan, who now works for Google as a guy who occasionally pretends to care about what reporters think. But at the time, he wrote for Search Engine Watch, and he said, so how about results? I think many people will be pleased, especially for the ever-popular single and two-word queries. A search for Bill Clinton

brought the White House site up at number one, a search for Disney, topranked Disney.com, and sections with it like Disney World, the Disney Channel, and Walt Disney Pictures. Yet interesting alternative sites like Werner's unofficial Disney Park links also made it to that list. Now, let's just take an aside here. I'm just going to go to Google.com as we speak. I'm going to take Disney in. I'm going to read you what's on there. So the first things at the top are all sponsored.

It's sponsored, and then tickets and tours is a very big font. And then there's five different options to buy something on trip.com, some sort of vacation package, and then another thing from a company called undercover tourist. And then the results are Disney. com and Disney Plus and Walt Disney World. But those are like the, they are the smallest thing on this page compared to the Disney Store Link in Vegas

and the four, five different sponsored pieces of content. And if you scroll down, it's Disney products, YouTube, Disney on eggs, Disney parks, oh, this is all pretty good. But no original content. There's like 100,000 different Disney blogs that just aren't on there. Google don't give a shit.

But they used to. Google also outclass the competition on a technical level, as noted by Brian Jurel, former senior director of production operations at Altivista. In a hacker news post, he blamed Altavista's demise on its failure to update its result indexes, which in turn meant that many of their front page results led to outdated or dead links.

And I quote, this was particularly bad because one of our earliest strong points was fresh indexes. Our ability to refresh the supplementary index on the fly was awesome. When you lose one of your primary strengths, it's noticeable, he said, adding the decline in Altavista's index quality was due to a loss of focus within the company. Oh, would hate for that to happen to Google.

Google was, at the time, both objectively and subjectively, better than anything else, and so it grew. And, like I said last episode, it became a verb, kind of like how we say Photoshop instead of Airbrush, or Xerox instead of photocopy, and better offline listener instead of average criminal. Not only did it fend off its earliest competitors, but it also brushed past anyone that would try to steal its market share, like damp musk acolyte, Jason Kalakanis's Malhallo, which was a human-created search engine a bit like the early version of Yahoo, and Kull, which emphasized its larger search indexes and privacy-centric ethos as distinguishing factors. Just so we're clear, being popular or superior is not an antitrust

violation. No, no, no, no, that's not the problem. What Google did afterwards was the problem, and in the eyes of Judge Meta and the US government was also illegal. As a know, a lot of the things I'm about to cite it from this ruling, which makes linking to them kind of hard. Please don't be mad at me. But much of this ruling discusses something called distribution, which refers to how Google makes its search product accessible to users. The Google website is the most obvious example of that, but it also includes browser and device integrations.

You ever wonder why the default browser option on Safari and Firefox is Google? I kind of said it last episode. It's because Google pays these companies a lot of money. In the United States, half of all searches happen through an access point where Google has paid to be the default. A further 20% come through Google Chrome, which is made by Google, and thus it follows that Google is the default search engine. Little monopoly in your monopoly. Pimp my ride. Only 30% of US search queries take place in environments where Google is not the default browser,

which is not to say that all those searches are going to duck, dot, go or Bing, but rather that consumers have made an active decision to use. whatever browser they've selected. And while you could argue that the consumers could choose to change the default on Safari or Firefox to something other than Google, the reality is, as shown by Google's own internal research and communications, that most consumers either don't know how or just don't care to.

Another internal study mentioned in the judgment, this time from 2020, showed that half of all US iPhone users didn't even know what search engine they were using. The ruling also points out that in some cases, there are inherent points of friction dissuade users from changing their default search engine. Switching on Android was arguably more difficult than on iOS,

the ruling said, also noting that the smaller screen of a smartphone and general fiddliness of things was a further deterrent. Google's own estimates show that if it lost search placement on iOS to another provider, it would lose between 60 and 80% of its traffic, just because of how tricky it is to change these default settings. And so you're starting to get an understanding,

of the importance of these default placement deals for Google and how critical they are to its bottom line. In 2021, Mozilla made 80% of its operating budget or $400 billion by selling default placement to Google too. These monopolies have real consequences. Apple, meanwhile, earns a percentage of advertising revenue from queries made from Safari and Chrome, even though Apple doesn't actually bundle Chrome with its devices. In 2022, this amounted to about $20 billion, which was double the figure of 2020, and amounted to one-sixth of Apple's operating profit from that year. Google also has signed deals with several U.S. carriers like T-Mobile, Verizon and AT&T, as well as other Android manufacturers, including Samsung and Motorola.

The terms of these deals differ between companies, but they usually account for a percentage of ad revenue, with the actual percentage varying from contract to contract. While these deals are undoubtedly good for the balance sheets of these companies, they do impose restrictions on what these companies can do. Take Samsung, for example, which has around 31% of US smartphone market share, second only to Apple. In 2019, Samsung wanted to integrate technology from a startup called Branch, which would allow users to search for content within installed applications, as well as, to a limited extent, content from the internet, although it was not to be clear a proper search engine in any real sense. Despite how there was a little bit of initial excitement around this, Samsung also saw kind of became clear. that the way Branch worked conflicted with their agreement with Google,

and so the software had to be reworked in a way that massively limited its functionality. While the partnership went ahead, it was nowhere near as lucrative, as Branch first hoped. The software was crippled, and thus much less attractive. Similarly, AT&T also wanted to pre-install Branch on its devices, but decided against it when it couldn't get clarity from Google whether it violated the terms of its revenue-sharing deal. Google, it seemed, simply stonewalled AT&T into submission. And this is again, going back to the Matt Stoller interview I did, when you have rules like this,

when you have monopolies, they do operate like miniature governments. And indeed, this is an example. Google didn't even need to intimidate these people in most cases. They just made enough money and they were scared enough of violating the deal that they literally made their devices worse. They didn't install cool software for fear that Google might sue them and cut off a lucrative revenue share. It's nasty. Even Apple, a company that is at varying times close to or the most valuable company in the world, found itself constrained by this devil's deal with Google. At one point, Google insisted on altering the terms of its agreement to prevent Apple from suggesting relevant links to users through the Safari search bar, as such a feature would be, and I quote, substantially similar to Google search.

Apple, for what it's worth, has said that it did not feel constrained by these restrictions, which makes it fine with me, then—I'm kidding, kidding. I'd argue that they would say that because they were making $20 billion each year from Google. And if I'm honest, if somebody gave me $20 billion, I'd let them do whatever they wanted. Hit me with a baseball back. Run me over with your car. I don't care. Call me a pig. I'll oink for you.

Give me $20 billion. I need $20 billion. Please give it to me now. But if you can't give me your money, then perhaps you'll hand it to one of the extremely well-targeted advertisements that follow this wonderful message. Once that will make you say, wow, this is definitely one that Ed wanted to follow what he just said. Another podcast from some SNL late-night comedy guy, not quite. Unhumor me with Robert Smygel and friends. Me and hilarious guests from Jim Gaffigan to Bob Odenkirk to David Letterman,

help make you funnier. This week, my guest, SNL's Mikey Day and head writer Streeter Seidel, help an a cappella band with their between songs banter. The worst singer in the group. The worst? Yeah. Me. Is there anything to the idea that because you're from Harvard,

uh, you only got in because you're very, parents made a huge donation. The group. The yard birds, right? That's the name. The Harvard Yardt Yardt. They're open.

Do you have a name suggestion? We're open. Since you guys are middle age, one erection. Listen to humor me with Robert Smigel and Friends on the I-Heart Radio app, Apple Podcasts, or wherever you get your podcast. Humor me. I need some jokes to make me seem funny.

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The ability to show a gold medal to someone and have their face light up and smile, that means the world to me. And that's what motivates me to win more gold medals. At our level, at this scale, like being able to fail in front of the entire world. Like, I can do anything. I can do anything. Because resilience isn't just about winning. It's about showing up, even when it's hard. Listen to Hurtle with Emily Abadi on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHart Women's Sports. Hey, I'm Jared Adano.

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If you've been searching for a soft place to land while doing the work to become whole, This podcast is for you to hear more. Listen to deeply well with Debbie Brown from the Black Effect Podcast Network on the Iheart radio app, Apple Podcasts, or wherever you get your podcast. And we're back. And we're back with Google. As I've kind of hinted at, I don't think without their ad monopoly and with their Google search monopoly, I don't think Google is a profitable business.

And I definitely don't think Google Search is a profitable business. I think it's actually kind of a cost center. Search is, in effect, the vehicle in how Google gets people to look at billions of dollars of advertisements every single day. And Google doesn't allow any other competing business to show ads on its turf. It has exclusivity. And as the ruling found, that exclusivity is allowed Google to raise prices at will, looking to see how far it can push advertisers before they walk away, you know, to the other

place they can advertise to this many people. In 2017, the company ran an experiment where it strongly increased certain prices for a cohort. 15% of advertisers for six weeks, it found that half of the initial revenue getting stuck and found that there was no significant evidence that advertisers were changing what products they bought. Google would later do further studies where it significantly hiked prices on advertisers, and each time it learned that it could charge more without losing them. While Google acknowledged there was a limit to how far it could push things, they believed that there was still more value to extract from its customers,

and so it set upon a strategy of gradually, though significantly I should ask, raising prices across short intervals. As an aside, and God damn, is this company so fucking evil? They should be eradicated from existence. The fact that people like this function in good society is only proof that there are things wrong in the world. Every time I read about them, I feel poison in my veins. But there's more.

These price rises, Judge Meta noted, were often timed when Google was at risk of not meeting its revenue goals, and when the company was at risk of showing some sort of slowdown in its ads business. Hey, remember the code yellow from 2019 from the man that destroyed Google Search? That was all around raising metrics because they were worried about query growth. Google does not care. They will do whatever they need to to make revenue. They will make your products worse.

They will make it more expensive for advertisers to advertise to you. And it's all thanks to their goddamn monopolies. And these changes, these increases to the pricing of advertising, and the way that they took money from advertisers, they were done with this insane lack of transparency, and this is really stomach turning this beer. This company, like, people should be in jail for this. Google didn't tell advertisers that the costs were going up, but rather they were timing these increases so that these increases could be dismissed as noise

or ordinary price fluctuations generated within advertising auctions. The last point is important, by the way, as Google also tried to rig these auctions in their own favor. One way they accomplished this, by the way, is by removing the ability for advertising, is to remove themselves from certain auctions. When someone buys a text ad on Google, what they're really doing is selecting a keyword or keywords under which they want their ads to appear. The problem is that people may use different words for a search

with the same intent. So one person might say kids' clothing, where another might say children's clothing. And this is a problem for advertisers because you want to make sure that you capture the audience you want, right? And this is a problem that Google fixed by adding other relevant keywords to an advertiser's bid without telling them.

Now, this might seem like a nice, nice thing that Google did, making sure that your money goes further, right? The problem is, as the ruling showed, that Google interpreted the word relevant in the broadest way possible. So kids' clothing would, as one shot shown in the ruling showed, include phrases like newborn children's clothing, or kids' clothing Canada, or T.J. Max's Kidswear. And what's great is, if you don't like this, you have no one else to advertise with, no other choices. And while Google initially allowed advertisers to opt out of this feature, which they called semantic matching, or use a limited version that would only include grammatical variations like pluralization,

so children clothing, children's clothing, and so on and so forth, they of course remove these options. This means that unless the advertiser explicitly states what keywords they don't want their advert to appear under, they're going to be bid on search results that aren't relevant to their needs. And guess who controls what are relevant? Google, Google's the one that tells you how much money to spend on Google. You don't like it. Well, you can work with Google to advertise on Google, and otherwise you can go fuck yourself.

And this in turn increases the amount of advertisers bidding for space in an auction, which in turn results in higher prices for advertisers in a completely unpredictable way that's predictably evil. Not only does Google control the supply, they literally control the demand. And while Google at one point provided advertisers with detailed information about their matched keywords and the algorithmically selected ones at that, it no longer does so. As a result, advertisers are effectively forced to guess what keywords their ad might appear under, and they have no other vendor to go to who might be a little more transparent. This in turn, by the way,

pushes them to larger advertising agencies who have a better relationship with Google, who might have keyword banks that they know that they can cut out so that the advertising dollars are more efficiently spent. This in turn makes advertising agencies, especially the bigger ones, more powerful and hurt small businesses. It's so cool watching this. happen? It doesn't make me angry at all. But in his ruling, Judge Meta found that Google's practices had degraded the quality of its text advertisements and charged super-competitive prices for text advertisements. At the same time, by maintaining Google's stranglehold on the search market, they effectively limited how much rivals, like Bing, can make from advertising.

Even if Microsoft built a better ad tech platform than Google, its share of spending would remain in line with its market share. And I quote here, By looking in a huge comparative query volume advantage through its exclusive agreements, Google ensures that advertisers will continue to spend 90% of their text ad dollars with Google, regardless of increases in price or decreases in quality. That is an anti-competitive effect in the marketplace. That's Judge Metter who said that, and he's bloody well right. So what happens next?

There's four unlikely outcomes here, each with their own advantages or disadvantages, and their own level of probability have come into pass. And hat tip, by the way, to Adam Kovarvich. for highlighting these. Google may be ordered to cease engaging in default search deals, kind of the most obvious one, leaving the likes of Apple, Samsung and Mozilla free to sign agreements with other search providers, although these agreements would almost certainly be less favorable than their current ones, and indeed would be, I don't know, competitive, it's going to be a mess. As the ruling showed, both Apple and Mozilla have, at times, flirted with or been courted by

the likes of Microsoft and Yahoo, although the terms were never as favorable as I mentioned. And guess what? they didn't take them. Judge Meta might, although the how is pretty difficult here as Apple and Mozilla aren't defendants in this case, forced browser developers to offer users a ballot screen where people could choose what search engine they'd like to use. This would probably boost the market share of smaller search providers by a small degree, although I imagine most would just opt, either through habit or preference, to pick Google. At the very least, until a viable alternative gains momentum. But this is still a start. It's still good.

Well, then again, it's entirely possible that people might try something new, and either because they like what they've selected or through sheer inertia, they don't go back to Google. As Google's data shows, this is a real threat, especially on mobile, which accounts for a massive portion of its search traffic and thus its ad revenue. Google may be forced to share click and query data with rivals, although again, this poses its own thorny issues, especially when it comes to privacy. At the very least, it should at least tell advertisers what keywords they're buying and give the meaningful opportunities to opt out of irrelevant. queries. While this sounds like a minus lap on the wrist, it has the potential to cost Google billions. Google's made so much money from forcing advertisers to buy slots on searches they don't want or care about and by forcing people into auctions against their will or knowledge. When buyers are empowered, it follows that the price of ads will decrease commensurate with the lower levels of demand.

And I don't know, consumer choice is good, and Google does not like consumer choice, so I assume it's less profitable to let people choose things. But finally, Judge Meta may order the actual breakup of Google, compelling the company to divest Chrome, Android, or more than likely its advertising division. This remedy is arguably the most potent, and one that Google is most likely to oppose, and it's also the most funny. But let's get into why it's thorny. Chrome and Android are based on open source products, the Chromium project and the Android open source project, respectively. And short of prohibiting Google from contributing code or providing funding, it would have a leading role in these developments and thus real influence.

Moreover, Google's presence in Android isn't just in the operating system itself, but everything else, called Google Mobile Services or GMS. GMS is the package of software that turns an Android phone into a Google phone. It includes the apps that come pre-installed when you buy a Samsung or a Xiaomi phone, like Gmail, Google Chrome, Google Assistant and so on, and also Google Gemini, as well as the APIs that allow third-party applications to integrate with them. Any ruling that doesn't force Google to divest these components is, for the most part, toothless. And any ruling that says effectively that Google can no longer build apps, or rather build apps for the mobile OS it's most closely associated with, it's kind of hard to imagine. Moreover, Google could also just ditch Android.

It's already working on its own OS called Fuchsia. It's already using Fuchsia in production devices, though it's unclear how invested they are in the project. And as I've previously mentioned in the last episode, I don't know how much staying power anything new in Google actually has. Combined this with native support for existing Android apps, which it likely already has, and if not could be implemented as others like Microsoft

and Huawei have pretended to. It would effectively skirt any restrictions imposed on Google's involvement in Android proper. the biggest, scariest thing for Google would be any separation of church and state between Google search and its advertising platform. Doing so would be potentially ruinous for this company, which is why Google will do literally anything to stop it. But it's the remedy that would actually change things. Google's lack of competition in search is a symptom of its ability to set pricing in terms of advertising on search. And it's a problem that can be solved by removing its ability to do so. And let's face it, Google Search doesn't make that.

much money on its own. The thing that brings home the bacon is the ads on search and the ads you get with each query. If the ad business becomes its own separate entity, Google will have to entirely rethink how it monetizes search. And for Sondar Peshai, that's a terrifying thought. I mean, what does he do? How do you rig the tables if you don't own the casino? And by the way, I'm in beautiful Las Vegas, Nevada. We never rigged the tables here. That's sacrilegious. But it's not like there's another business for him to fall back upon. As I discussed at the end of the last episode, Google's largely lost the ability to innovate and execute on new ideas.

And any new ideas that do eventually hit the market are usually, and often just in a few months. Murdered. The bolt gun comes out. Kachunk! They throw him in the open grave with Google Reader. But seriously, what does Google have other than products that directly lead to its own advertising technologies? What is there besides cloud?

And even cloud is a marginal player at best when compared to Microsoft's Azure and Amazon's AWS. There's nothing. Before you get too excited, it is worth noting that Google will, no doubt, fight this ruling to the very end, using every single avenue of appeal, every dirty trick until they're successful or they've run out of options. These little fuckers are going to go after everything, and they're going to look specifically in appeal, which, by the way, little Apple at court session for you here, and if there's a lawyer listening, I'm sorry, basically Apple at court appeals are not a retrial of the facts it is a procedural thing they'll be looking to see whether judge metta messed up and i'll tell you a little bit about how that's happened in the past and how bad that is and why i'm a little worried it might work sure there's now a bipartisan dislike a big tech and i don't think any of the recently appointed supreme court judges other than the ones that might be on the take i don't know i don't think they care about google trump doesn't like google harris doesn't like google i don't think any of the anyone that's coming up is going to be like, we must protect the most evil tech company of them all

other than meta. They hate them. And Google search is bad for most people. Most people realize this is a problem. And this ruling, by the way, despite it being extremely long, is really worth reading. It was very forensic in its case against Google. The facts on the ground and those obtained through discovery, they're pretty hard to argue with. On the flip side, Google also has near unlimited funds to throw at this legal battle, which,

as I'll point out in a bit, is absolutely it. existential for Google. And they're lobbying to try and change their fate. I hope they lose. And depressingly, the US hasn't proven particularly effective at curbing this horrible monopoly bullshit in the past. And I'm going to tell you why. But before I do that, do you have money? Do you have a wallet? Are there credit cards in the wallet? Perhaps this upcoming product might be a thing that you could stick your credit card in. Or maybe it's a podcast that you could download for free. I don't know. I'm not an advertiser. I'm just the guy speaking before the ads. Now, the ads that follow, they're directly chosen from my brain. They have a neuralink inside me. I've got the third

neural link and it's connected to the ad server with the company. And that's why all of these ads are so well targeted. Please to enjoy. Another podcast from some SNL late night comedy guide, not quite. Unhumor me with Robert Smygel and friends, me and hilarious guests from Jim Gaffigan to Bob Odenkirk, to David Letterman, help make you funnier. This week, my guest, SNL's Mikey Day and head writer, Streeter Seidel, help an Acapella band with their between songs banter.

There's that worst singer in the group? The worst? Yeah. Me. Is there anything to the idea that because you're from Harvard, you only got in because your parents made a huge donation. The group. The yard birds, right?

That's the name. The Harvard yard, but they're open. Do you have a name suggestion? We're open. Since you guys are middle-aged, one erection. Listen to Humor Me with Robert Smigel and Friends on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. Humor me. I need some jokes to make me seem funny.

Run a business and not thinking about podcasting, think again. More Americans listen to podcasts than ads supported streaming music from Spotify and Pandora. And as the number one podcaster, IHearts twice as large. is the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only IHeart can extend your message to audiences across broadcast radio. Think podcasting can help your business. Think IHart.

Streaming, radio, and podcasting. Call 844-844-I-Hart to get started. That's 844-8-4-I-Hart. Life throws hurdles big and small. The question is, how do you conquer them? On Hurtle with Emily Abadi, we sit down with the most inspiring women in sports and wellness. professional athletes, coaches, and Olympic champions to talk about the challenges that shaped them and the mindset that keeps them going.

From the WNBA standout Kate Martin and rising hockey star Layla Edwards. If a boy can do it, I don't see why a girl can't. Like, I've never understood that. Like, it didn't make sense in my brain. It's hard to be in spaces that no one looks like you, but don't ever feel like you don't feel like you don't belong. Don't let that be the reason you don't do it. An Olympic champs Gabby Thomas and Katie Ledecki.

The ability to show a gold medal to someone and have their face light. up and smile. That means the world to me. And that's what motivates me to win more gold medals. At our level, at this scale, like being able to fail in front of the entire world. Like, I can do anything. I can do like I can do anything. Because resilience isn't just about winning. It's about showing up, even when it's hard. Listen to Hurtle with Emily Abadi on the IHeartRadio app, Apple podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHeart Women's Sports. I'm George Adano.

You might know me as that loud guy who yells out, help on the internet. Help! Somebody! Please! But there's so much more to me than me. I'm an actor. I'm a comedian.

And recently, I've become quite the helper myself. And on my new podcast, Hope from a Hypocrite, I'll be changing lives, helping people in need with my sage advice and thoughtful solutions. Sike! I'm a comedian. I'm not qualified to give good advice. Join me and my comedian friends as we riff,

and recommend some of the most legally dubious advice known to man. If I'm calling you, even if you're on your phone, let it ring twice. One ring is too scary. Oh, cream a chicken suit. Hey, cream a chicken suit. This is Help from a Hypocrite, the worst advice from the dumbest people you know. Listen to Help from Hypocrite as part of the MyCultura podcast network available on the IHartRadio app, Apple Podcasts, or wherever you get your podcasts. The story I've told myself about love or relationships can then shape my behavior, and that can lead me to sabotage the possibility of connection.

This Mental Health Awareness Month, tune into the podcast deeply well with Debbie Brown and explore the journey of healing, self-discovery, and returning to yourself. We explore higher consciousness, emotional well-being, and the practices that help you find clarity, peace, and self-mastery in a world. that can feel overwhelming. The world is becoming lonelier. We're not becoming more social and connected. We're becoming more individualized, but we actually meet people in connection. If you've been searching for a soft place to land while doing the work to become whole, this podcast is for you to hear more.

Listen to deeply well with Debbie Brown from the Black Effect Podcast Network on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. And we're back. But now it's time for a little history lesson, and a story about how remarkably different the computing market could look today if legislation had actually succeeded. In the 1980s, MS DOS rapidly emerged as the dominant operating system for IBM-compatible computers, and by the end of the decade, it held 80% of the market. While its growth was in no small part due to Microsoft's chummy relationship with IBM,

they also benefited from changing market conditions, some savvy tech and business moves, and a few missteps by the competitors, But no, it wouldn't be fair to ascribe Microsoft's success just to its vast resources and technical jobs. It also resorted to strong-arming hardware manufacturers into only selling computers with Windows or MS-DOS, or making Windows and MS-DOS artificially more preferable to buying an alternative. One tactic, which started in 1983 and continued until the mid-90s, was to force manufacturers to sell an MS-DOS license with each machine, even if the customer wanted something like BOS or OS2.

This would be done by strong-arming vendors into buying licenses in bulk, and not, as you'd perhaps expect, by demand for the product because the product was better. Now, how'd they do this? What they did was they set the individual license price for an MS-DOS license so high that buying in bulk was basically the only way to do it, and outright refused to sell to any vendor that purchased alternatives, or they just refused to sell them Windows. In the show notes, I've linked to the great paper from the summer 1995 issue of the Antitrust Bulletin

journal about this. It's sickening. Microsoft's insistence on bulk licensing agreements meant that asking for a competing operating system wouldn't actually reduce the cost of the computer. Instead, it would increase it, because the vendor had already bought a specific number of licenses, and they're incentivized to bundle the cost into each machine they sell. Buying a competing operating system like DRDOS would in fact mean paying twice for an operating system. It sucks. These licenses were typically only valid for two years, which, by the way, To Microsoft, there was no price difference. They just chose this. And Microsoft didn't provide any refunds for unused licenses, meaning vendors had an incentive to aggressively offload them

onto customers, like providing them for free or cheaply with anyone who bought a new computer, or by framing MS-TOS as a perk of a purchase. Another tactic designed to bolster sales of Microsoft's productivity software while crippling its rivals was to use secret APIs to control Windows that were only accessible to Microsoft software and not to anyone else. Microsoft's rivals claimed that these public APIs were, generally speaking, not as good, and meant that their software performed worse on Windows, which by the early 1990s had reached near-monopoly status in the PC market. The YouTube channel Retrobytes goes into this practice in some detail if you're curious, and I'll link to that in the notes. Anyway, my point is that Microsoft was a bit of a bastard back then.

Argue they still are, and by the mid-90s, they were already facing some scrutiny from the FTC, which opened investigations and delivered a couple of little slaps on the wrist, which Microsoft, of course, fought. In 1995, Microsoft released Internet Explorer, its first entrant into the web browser market, which competed with early style works like Mosaic as well as Netscape, which was the dominant player at the time, and opera, which was rapidly gaining momentum. Microsoft knew the internet was going to be a huge deal, and so it did everything it could to make Internet Explorer the dominant browser. This included bundling I.E. with Windows and structuring it so that you couldn't remove Internet Explorer without breaking parts of the operating system. Rivals also claim that Internet Explorer

benefited from hidden APIs, which in turn mean that competing browsers wouldn't work quite as well. In 1998, the US Department of Justice filed a suit against Microsoft, accusing it of breaching the Sherman Act, the same law that Judge Amit Mehta ruled Google violated, by establishing a near monopoly of the X86 computer market, and Microsoft lost. The trial and the release of Bill Gates's deposition tapes, which are hilarious, he responded with, I don't recall to most questions and he asked for the definition of we and ask. Anyway, it was humiliating for. for Microsoft. In 2000, Judge Thomas Penfield-Jackson ordered the breakup of Microsoft into two companies, one responsible for the operating system, and one that would create applications.

As you'd expect, Microsoft appealed, and the following year in Appalach Court reversed the ruling on the technicality, as Judge Jackson had improperly discussed the case with the media before its conclusion. While the findings of the case stood, Jackson's ruling was overturned, allowing Microsoft to reach a settlement with the Department of Justice. And so we got another slap on the rest. Microsoft would have to share its private APIs with competitors and agreed to five years of monitoring where a Department of Justice representative could unannounced show up to its offices and demand access to source code and records. The Department of Justice also created a technical committee, which consisted of three experts, none of whom could be recent Microsoft employees or contractors to ensure their compliance.

Microsoft could, however, keep bundling software like Internet Explorer with its operating system, which meant its near monopoly on the browser market would remain relatively unchallenged for another eight years. years until Google Chrome arrived. I don't take any pleasure in saying that I loathe Google. As someone who grew up on the internet, it was really the product that showed me the possibilities of the web and expanded my horizons with every search and click. I used Google as shit done. I still do. None of us like that Google's bad. I wish it was good. It was, and as I've already said, I've said this a lot of times, it was a really good product at the time, and it was good like five, ten years ago, I swear. But now it's become corrupted. Now Google,

Google is just at its core rotten. This company used to say don't be evil. I know one of the early jokes in the show was the Lionel Hutz thing with the red marker and it's don't, comma, be evil, exclamation mark. But that's kind of what it is now. They just distort markets. They block competition. They don't give a fuck about you.

They don't give a fuck about their advertisers. They know everyone's trapped in the system. They're also just boring now. I remember when Google launched Gmail. I remember the hubbub. people selling the invites on eBay. It was genuinely cool and it was far superior to everything else on the market. Hot mail, Yahoo Mail, they were dog shit in comparison. You know I'm right. Google Docs, Google Reader, RIP, and even Google Fiber were all ambitious, clever and

worthwhile products that actually people like and use and are happy with. Now we have Android phones with AI features that nobody wants. These horrible, dreadful generative AI tools that mislead and misrepresent and a family of products that while once genuinely were useful, they feel like stale and unhelpful. They don't feel like they're made for human beings. They feel like little experiments, except we're the rats. Man, that's cliche. Oh, well. And there's a genuine chance here, though. There really is. I know I've kind of given you a little bit of a cynical view. There is a chance here that if Judge Medta truly punishes Google, that it could genuinely fix this company by destroying it. And I think that's a good thing for the future of the tech industry.

Google, as a company, used to be symbolic of a kind of stable equilibrium in capitalism, a profitable company that made societally useful products, ones that change lives mostly for the better, with a culture that actively encouraged a kind of digital experimentation that, in turn, led to better, cooler products, like Gmail and Google News. And let me just be really abundantly clear. that company is dead. Google, as you know it, is dead. What remains is Alphabet, a private equity firm run by a management consultant, hiring other management consultants to dump money into dominating industries and extracting as much value as possible before the markets collapse. Google is lazy, languid, ugly, bereft of innovation and bereft of the kind of culture that made it so powerful in the first place.

This isn't a company full of genius engineers allowed to do great work. It's a company run by assholes. It's a company run by management consultants. Sundar Pishai, he is cancerous to innovation. He makes $200 million making products worse yet more profitable. Prabagar Ragavan is a poison in the veins of Silicon Valley. And Liz Reed is a class traitor to the engineers that actually care about creating great products at 1600 Amphitheater Parkway. The company, Google, deserves to be obliterated because in its current form, it is defaulted

on its duty to the tech industry, to its customers, and even to its own mission. The only way to fix Google is to destroy it and to force it to start earning customers again. To fix the tech industry, we must obliterate every single one of these monopolies. Meta's hold on advertising, Apple's hold on the app store, Google's hold on search in its associated advertising arms. Every single one flies in the face of why you and I love technology and runs counter to the notion that Silicon Valley has a meaningful place in society. All of these people, they talk about the meritocracy, they talk about earning one's place, that it's hard graft and burning that makes these great companies.

But look at them. Do any of these companies really look like they're built out of hard work? No, they're giant cons, cons, wrapped in companies, wrapped in monopolies, wrapped in bullshit that makes products worse. Big Tech had a really good thing going. Big Tech made so much money without really trying that. hard. And all they had to do was not get too greedy, but they did. They always do. So we as a society should reject companies over a certain size, and we should indeed reject everything that big tech is saying about their hard work. The generative of AI boom is disgusting, and it's disgusting because it shows such an incredible contempt for society itself, for the creators that it's depriving of a future, because bosses are lazy and don't trust their customers or care about the customers

enough to provide them with real things made by real humans. Generative AI is just proof that these companies can't innovate anymore. It's proof that they don't care about the customer enough to create something useful. And honestly, it shows that they don't know how to run real companies anymore. So I challenge you, the listener, to continue to critique these companies, to move away from their software where you can, and they know how impossible that is because of these monopolies. But I also encourage you to talk to your friends, your family, especially those not super, or online, and tell them about monopolies. Tell them about this podcast, sure, but talk to them

about monopolies, make monopolies general parlance in good conversation. Look for the monopolies in your life. Look at how people have successful businesses, not from providing a great product, but from fucking everyone around them, from cheating, because that's what a monopoly is. It's a cheat, a cheat by a lazy person, a cheat by an incurious person, a cheat from a scumbag. And you're not like them. I know that. And I want you to talk about monopolies in your general life. I know it sounds silly.

I know it sounds ridiculous like talking to regular people about this. But these monopolies ruin your life. These monopolies are where so many pain points in your lives come from, both in tech and in your regular lives. Thank you so much for listening to this. Thank you so much for giving me your time. And as I've kind of hinted before, we've been renewed for a second season.

You've got a few more episodes of season one before season two starts, and nothing's really going to change. But again, I'm so grateful to have you as listeners. I really am. It's a pleasure to do this, and it's a pleasure to serve you. And I will be trying to make it better. I don't really have a way of monopolizing anything. And also, I don't think I have that in me.

I'm just too pissed naturally. Have a great week. Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Mattersowski. You can check out more of his music and audio projects at Mattersowski.com. M-A-T-T-O-S-K-I-com. You can email me at E-Z at Better Offline.com or visit Better Offline.com to find more podcast links and, of course, my newsletter.

I also really recommend you go to chat. Where's Your Ed dot at to visit the Discord and go to R-S-Better-O-Line to check out our Reddit. Thank you so much for listening. Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, CoolzoneMedia.com, or check you. us out on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. Another podcast from some SNL, late-night comedy guy, not quite. Unhumor me with Robert Smygel and friends.

Me and hilarious guests from Bob Odenkirk to David Letterman help make you funnier. This week, my guest, SNL's Mikey Day and head writer Streeter Seidel, help an a cappella band with their between songs banter. Where does your group perform? We do some retirement homes. Those people are starving for banter. Listen to humor me with Robert Smigel and. and friends on the I Heart Radio app, Apple Podcasts, or wherever you get your podcasts.

Wife is full of hurdles. So how do you keep going? On Hurtle with Emily Abadi, we're talking with the most inspiring women in sports and wellness from professional athletes, coaches, and Olympic champions about the challenges that shape them and the mindset that keeps them moving forward. At our level, at this scale, being able to fail in front of the entire world. Like, I can do anything. I can do anything.

Listen to Hurtle with Emily Abadi on the IHeart Radio app, Apple Podcast. or wherever you get your podcasts. Presented by Capital One, founding partner of I-Heart Women's Sports. Hey, I'm Diana Maria Riva, and on my new podcast, How Hard Can It Be? I call on my Gen X squad from Ohio to Hollywood as we navigate Midlife's most fantastic BS. Unfiltered conversations from night sweats to fupas to scheduling sex. Wait, what sex? Is it just me or does every woman my age want to look at Pinterest instead of having sex sometimes?

They say we can't polish it. but we're sure going to try. So let's get blunt with laughs, tears, or tears of laughter. Listen to How Hard Can It Be with Deanna Maria Riva on the Iheart Radio app, Apple Podcasts, or wherever you get your podcasts. There are times when the mind becomes a difficult place to live. This is David Eagleman with the Inner Cosmos podcast,

and for Mental Health Awareness Month, we'll talk with singer-songwriter Jewel about anxiety. I started living in my car, and then my car got stolen. I was having panic attacks. I was like, orophobic. This is a month of VIII. deeply personal and honest conversations about what happens when the brain goes off course. Listen to inner cosmos on the Iheart radio app, Apple Podcasts, or wherever you get your podcasts.

Hey everyone, it's Ryder Strong and Wilfridell from PodMeets World. And now the PodMeets Twirled podcast. We're two men who were completely clueless to reality TV, and we're gearing up for the season finale of Survivor. I know we annoyed a lot of our listeners by our severe lack of survivor knowledge. That is the point of the show. I'm just going to remind you. Again, we are experts. Listen to Podmeets Twirled on the IHeart Radio app,

Apple Podcasts, or wherever you get your podcasts. This is an IHeart podcast. Guaranteed human.