Better Offline - How Monopolies Are Making Tech Worse
Episode Date: September 4, 2024A few weeks ago, a federal judge declared that Google has a monopoly over the search industry and text-based advertising. In this episode, Ed Zitron walks you through how the many monopolies of big te...ch hurt you on a daily basis. 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 to Better Offline and of course I'm your host, Ed Zittron.
Before we go any further, as a reminder,
check out the show notes for links to back up everything I'm saying.
I'm not creative enough to make this stuff up.
It's real, I promise.
Anyway, the start of August felt kind of surreal.
For the first time since JetGPT launched in November 2022,
there were signs that the markets were finally starting to wake up to the bullshit
of generative AI and kind of seeing that it wasn't making anyone money, really.
You know, the very obvious thing that some of us have been saying for quite some time anyway, though.
It was remarkable, but not as remarkable as what happened on August 5th,
when a federal judge delivered his ruling in an antitrust case filed against Google by the US
Department of Justice. In 300 pages of dense legal text, Judge Amit META confirmed an
excruciating detail that lengthen the breadth of what all of us kind of sort of knew.
that Google has a monopoly in search and online general text advertising, and that's a specific term of art.
For many reasons, this ruling was a humiliating one for Google, not least because it showed the sordid, nasty little details of how it's maintained its market dominance and actively impeded any chance of fair competition in the search market.
Documents obtained through discovery revealed the incredible amounts of money that Google's been paying to companies.
They paid Samsung $8 billion over four years, and Apple $20 billion in 2022 alone, to remain the default search engine on their devices, as well as Mozilla that makes a Firefox browser who they pay about half a billion dollars a year.
To be clear, this is one of the grizzly a pots. Mozilla is an organization I actually admire, and they do a lot of cool stuff technologically, but it also kind of revealed how dependent they are on Google's money to stay afloat.
Anyway, Judge Meta found that Google had violated the Sherman Act, a century-old Dantotrust legislation
that, among other things, led to the breakup of Standard Oil in 2010, as well as the breakup of AT&T in 1982.
This is a significant moment in Silicon Valley history, and it's an existential threat to Google.
While Google's initial success came thanks to it being actually better than the alternatives,
anyone remember Altavista? You heard of this? You seen this?
Google's continued existence is largely thanks to various.
interconnected monopolies it's established, creating a chokehold on, well, search, and I'd argue
the web at large. Over half of Google's yearly revenue comes from Google Search, over 175 billion
of the 300 or so billion that Google makes every year, and it's hard to imagine that Google could
sustain said revenue or its dominance without paying billions of dollars to starve the competition,
and indeed this ruling kind of proves that they can't. As I mentioned, the Sherman Act is roughly
130 years old, and since its creation, it's unwoven some of the America's most intractable
monopoly players, single-handedly ruining the days of oil company CEOs and rail barons alike.
It's robust, powerful, and it's a really good piece of legislation which in the decades since
its creation has been augmented with new laws to cover the blind spots missed by the original
authors. Problematically, the Reagan administration kind of detoothed it by refusing to actually
enforce it. You heard a little of that from Matt Stoller's interview from last episode.
But crucially, the Sherman Act has teeth.
It contains provisions that allow judges to levy big fines,
impose criminal penalties on CEOs or anyone else involved,
and those penalties can be about a decade long.
They can also order companies to perform specific actions,
like divesting a business unit, to remedy the situation.
It's good shit, and it's exactly what we need.
Well, I don't think that Sondar Pashai is going to prison,
which would be very, very funny, mostly,
because hardly anyone ever actually gets prosecuted
for violating the Sherman Act.
I do think this ruling has the potential to kill Google.
At least the current Google that we see today,
this present form of this company that bankrolls its other entities
using a crooked monopoly over the search market.
And in this two-part series,
I'm going to take a look at how Google created its monopoly
and how that monopoly allowed it to become fabulously rich.
I'll also talk about what might happen next,
which, for the most part,
will involve a mixture of history lessons
and a healthy dash of bullshit speculation.
Ah, I'm kidding. It'll actually be good.
But trust me, even the best case scenario for Google here is fairly grim.
You may also wonder why I've been going on about monopolies for weeks.
And I really want you to understand monopolies are a big part of why everything feels like it stopped working.
So many problems in the modern tech industry are a result of a lack of competition,
of monopolies and oligopolis that change the incentive of a company
from selling you a service, you a customer who likes the service and pays for it,
to extracting as much value from you as possible,
because you have nowhere else to go or leaving is difficult.
Competition is deeply important.
After all, if you're not worried about the competition,
why would you worry about your customers leaving?
The incentives of the monopolist are inherently degenerative.
Monopolis are not concerned about building better products.
No, they're concerned about squeezing their captive audience as much as possible.
The documents I covered back in April in the man who destroyed Google search are a great example,
showing how Prabagar Ragavan, God I love saying his name, the former head of ads at Google,
demanded an increase in queries, meaning more searches rather than better results,
as a means of increasing the amount of time one would spend on Google, which in turn
would allow Google to show you more ads.
However you feel about capitalism, a better economy is one where actual, real competition
between businesses exists, one based on their ability to meet customers' needs. This stuff feels very
obvious, but it needs repeating. A company that fears the competition is one that will compete to win a
customer's business and heart. And conversely, a company that has no real fear of losing customers
because they've dominated the market with, say, a monopoly or set up a healthy cartel of friendly,
other bigger, quote, competitors, where newcomers are effectively chased out. Yeah, they can make their
products worse without fear that customers might do something annoying like choose another option.
You see a lot of it outside of Tech 2.
Ticketmaster and its associated properties have dominated live events to the point that they
control both on-sale tickets and the resale market, leading to things like their horrifying
platinum seat steel, where Ticketmaster reserves tickets so that it can sell them for a higher
price to fans that couldn't buy them the normal way, which Ticketmaster also runs.
And that's why the Department of Justice is suing
them, and they sued them in May for their monopoly. I wish the executives at Ticketmaster nothing
but the worst. Four companies control 80% of US air travel after decades of acquisitions,
allowing them to effectively charge whatever they want, and because there are so few of them,
they'll pretty much keep their prices around the same amount. It's a fake competition and a fake
competitive environment, and it's bad for customers, and it's disgusting. Now, you may think,
I got really shitty internet speed, and whenever I call customer service, they
don't seem to pick up. And that's because most Americans have no real choice in internet providers,
thanks to monopolies run by companies like Comcast, Charter, Century Link and Cox,
who can charge what they want, perform a fairly mediocre standard and effectively abandoned less
profitable rural areas, discarding some to ultra-slow DSL internet that many of you probably
have not used in decades. And one of my favourite ones are the real fucknuts, the scumbags over at
Frontier, Frontier Communications, which is partly owned by
a private equity firm called Cerebrous Capital Management, which owns part of Albertsons,
a grocery store that's currently in the midst of a battle with the FTC over a larger chain
called Kroger's trying to buy them, with the FTC correctly arguing that it would eliminate
competition and allow one firm to control grocery prices.
Hey, that reminds me of something. You remember when inflation was increasing prices everywhere?
Yeah, if you read like a journalist who was writing, actually it's nothing to do with the companies.
you're fucking wrong, you were wrong at the time and you should not write anymore. It's disgusting.
What actually happened was the increasingly dwindling amount of competition in many consumer goods
companies allowed them to all raise their prices at once, gouging customers in a way that should
have had someone sent to jail rather than make $19 million for CEOs that were bleeding Americans dry.
It's also much, much easier for a tech company to establish a monopoly, because they often do so nestled
in their own platforms, making the monopolies just a little bit harder to be.
pull apart without a 300-page legal document.
One can easily say, if you own all the grocery stores in an area, that means you can control
the price of groceries.
That one's a bit more obvious, but it's a little harder to point at the problem with the tech
industry, because said monopolies are pretty new and different, yet mostly come down to
owning on some level both the customer and those selling to the customer.
There are no alternatives.
This is a fairly basic part of all-commerce.
One can not have a lawyer represent both sides, and one ideally should not have the same agent represent both the buyer and the seller of a house, which does happen in some states, which is insane.
And yet it's these conflicts of interest that the tech industry has made billions of dollars off of, and I'd argue that they can't operate without.
Meta's monopoly over the advertising on both Instagram and Facebook, as well as its own black box algorithms, allow it to make the products that you use every day so much worse just to show you more ads, and they can increase.
advertising prices whenever they want, something they've done multiple times without anybody
really covering it. As a result, Meta is also the only source of truth for how successful
your advertising is, to the point that it tricked the entire media industry into pivoting to
video using phony numbers. Hundreds of people lost their jobs. Nothing happened to Meta.
Meta, as with any digital advertising monopolist, can basically say whatever it wants to you.
Inflating stats where they need to as a means of getting more money out of you, which is why there is a
$7 billion class action suit against the company for literally doing that.
How has it taken this long to do anything?
It drives me fucking anyway.
Again, it's about incentives.
If meta has no competition,
meta does not have to act honestly,
or give detailed metrics about ad performance.
Because where else are you going to go?
You're going to go to the other advertiser on Facebook?
As Matt Stolas said in the last episode,
as Meta isn't really losing business as their products decay,
that seriously suggests they've got a monopoly over,
well, the advertising on their own products.
Now, I know some of you say I'm too easy on Apple, but don't worry, I'm writing the ship.
Apple has, at least outside of Europe, where the European Commission has ruled the company
must allow third-party app stores, the monopoly over the iOS and associated app stores,
as well as the advertising connected to it, meaning that it can set the prices, such as its
70-30 revenue split, what can be installed, and how said apps are monetized, which is again
why the Department of Justice has recently sued it for antitrust violations.
There is only one way to buy apps on your iPhone, and that's why the app store is so utterly
swamped with microtransaction pumped filth and random flashlight apps with invasive advertising
and spyware and shit. There's not really quality control, and that is usually, by the way,
what their argument is, especially Apple, and I use Apple devices. I'm recording this on an Apple
device, I use an iPhone and a MacBook. But come the fuck on. The whole point of the App Store,
this whole time, with Apple holding onto it with their nasty, gauntleted fist, was that they
hold the quality up. But what you see with the App Store today is a disgrace. Everything is
micro-transaction filled. And I know the argument is, well, that's what customers want. Fuck you. It's
what you allow. Apple allowed the micro-transaction industry to grow on iOS, and in doing so,
effectively killed gaming on your phone. The reason that most games require some kind, they're
free to play, but they require some kind of micro-transaction to really use them, is because these
games are insanely profitable. They're also deeply evil and exploitative. Yeah, Apple allows them,
because Apple makes so much money off of them, 30% of each transaction. If there was a just world
here, if we lived in a just society, if the App Store was a just society, Apple would have said,
no, this is an evil kind of money-making thing. There is no reason why this should exist. And I know I
sound a bit radical on this and I'm sure someone would disagree and say, oh, I like playing
warlords, battlemasters. I don't care. Those games are evil. There's a reason why mobile
gaming is so thin. And it's because of companies like Apple. And Matt Stoller said this on the last
episode and I really like this. When you have such a strong monopoly or effectively a political
power and things grow within the system, evil things when you use that monopoly and that power
in a way that incentivizes them. Apple could and should have, and the play store to an extent,
sure, but Apple really created this market, should have crushed microtransaction filled free-to-play games.
They should have rate limited them, I don't know, or they should have just not allowed them to
live. Companies like Evony, for example, have got so rich over these games that require people to
put hundreds of dollars to even compete. Hey, it's another competition.
thing. All right, I'll stop writing about this, though. We'll get back to the advertising side
of the App Store. And Apple, just to be clear, is the only advertising firm on the App Store.
And that is a big problem. Apple has aggressively moved against tracking of iOS users. A good thing,
by the way, yet they hold a complete monopoly on any advertisements on the App Store on their
phones and any associated advertisement at all on the iPhone. And yeah, you just have to trust them,
by the way, on the results there.
As that's the only
company you can advertise with. There's not really any
other choice. Sorry.
Also, that's why Apple is also being sued by the DOJ
for Alleged Sherman Act violations over
allegations. Its control of services like
iMessage, which is unavailable on Android
or Windows, and as internal documents
show, is seen as a useful tool
for ensuring customer loyalty,
has allowed it to restrict competition in the
messaging, smartphone and wearable markets.
And what's frustrating here is
Apple is probably not as evil as Google
and I've definitely gone to bat for Apple
but when you really sit and think about it
does it need to be like this
could Apple not open this stuff up
there's not really a quality control thing
Eddie Q if you're listening come on the show
shoot the shit with me because I'd like to
hear the justification
Steve Jobs was a horrible man a deadbeat dad
a real piece of shit but he at least
realized that there was a level of quality you had to provide
and the App Store doesn't have it.
There is an App Store episode coming, by the way.
I'm going to really take it to task
because I think that Apple's responsibility to society here
is yet another thing they've defaulted on,
just like Google has defaulted on search.
And you know, this whole thing is,
it comes down to restrictions,
and I don't think you should live restrictful lives, though.
Restricted lives? I don't know.
But if you want to free yourself,
and especially the money in your wallet,
you should buy one of the following products,
Or don't.
That's what a life unrestricted feels like.
But take your wallets out and maybe start spending on this product that's coming up that I'm sure you're going to hear the ad.
And you're going to be like, damn, damn, that's so good for Ed.
Ed probably loves this.
Ed's probably hearing this ad and saying, damn, they really nailed the things that I believe in.
So go on.
Show them your credit card.
Wave it in their face a bit.
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podcast. And we're back. But I want to make it clear. And I will make it clear. The competition is good.
You want competition. Every one of these companies has sold you a lie that allowing them to control
the experience makes it better because it'll be curated by the company that made it. Yet the companies
that make these things are huge, constantly laying people off. Though, this is a lot of.
isn't the case with Apple, and when given the chance, will take as many liberties as they can
to squeeze as many dollars out of every user. And when they don't have to compete, they get lazy,
they get domesticated. They don't have to innovate or impress you. They just have to keep you there.
And keeping you there can be as simple as it's really difficult to move, or where else are you going to
go? I keep using my iPhone because I genuinely like iOS, but I also know that if I Message was an app
rather than a thing only found in Apple products,
I'd absolutely consider using another platform.
And I'm sure someone's going to message me
about goddamn beeper or something like that.
It's not a good UX.
I don't like it.
Sorry, Casey.
Anyway, when you have a marketplace
entirely dominated by one company
selling advertising on services,
it runs, you really have no idea what you're buying.
And this is when we get back to Google.
And specifically, their AI-powered performance max platform,
a four-year-old black box advertising solution
that covers all of Google's properties, letting you run one campaign across every Google property.
Man, how convenient, right?
You just tell Google what you want, how much you want to spend, and roughly who you'd like to see it.
With what you're advertising, a Google will magically tell you at the end how many people saw your ads.
And how much you owe Google for the pleasure.
And no, you do not know where the ads ran, which is a problem that means that hundreds of large brands
find themselves every year spending money on spammy and scammy websites that likely never get them any
real customers. And as an aside, by the way, I'm hearing tell that there's a big problem in
CPM advertising cost per mile, so impressions, where, I don't know, the impressions might not be real people,
they might be bots. Uh-oh. And you know what? I have to wonder if the end of this trial
doesn't involve that data being shared with the rest of the companies in the industry, and us
finding out it's a much bigger problem. I have an advertising episode coming up as well.
this, by the way, all of this horrible, monopolistic chicanery, this is what keeps the lights on for these companies.
Google and Meta own both the products and the advertising services available on those products
and thus set the terms of every part of the transaction, because there's no other way to advertise on Google, search, Facebook or Instagram.
There are entities competing for placement, but that competition is done on the terms and the platforms set by the platforms themselves,
which in turn control how and when the ads are shown, and how.
how much you'll be charged for them.
Crucially, these companies also control all the data involved.
They are both the company selling you the ad space and the company auditing said ad space
and the business.
If you do not like Google as an advertising vendor on Google or meta as a partner to advertise
with on Facebook, you are shit out of luck.
Both if you want to try an alternative and if you need them to improve the product in
question.
This is the exact reason that Google is so nervous about its upcoming antitrust trial
over its accused monopoly over digital advertising, because the government wants it to divest
its ad management divination, which would in turn create an entirely different marketplace,
one where it actually, I don't know, had to compete?
I also don't believe that most of these companies can operate without their monopolies,
as I've said before.
Facebook and Instagram are increasingly decaying products that make tens of billions of dollars
a year because there's no competitor that can undercut or compete with meta's advertising
dollars, which make up 98% of their revenue.
Meta made $13.46 billion in profit last quarter on $39 billion in revenue,
which is a direct result of it being able to manipulate the platform to show more advertising
and increase the pricing of the advertising being shown.
Meta's users are trapped because Meta owns two of the largest social networks in the world,
three if you count threads, though it doesn't show ads yet.
And Meta's advertisers need to be able to access the swords of people that the platform has.
Everyone loses, except for Meta, of course.
so very well, but we need to crush their monopoly.
And by the way, all of this goes for Google too.
And they made a profit of $23.62 billion last quarter,
but on revenues of $84.74 billion.
Do you really think that $61 billion in expenditures or losses
is sustainable in the event that Google no longer owns a monopoly over its advertising space?
While those costs aren't all associated with Google Search,
half of their revenue is, and how much of said revenue is tied in the vagueness of the metrics it provides to its advertisers.
Using these numbers, we see that Meta had expenditures of $25.54 billion over the last quarter.
Again, can it sustain this level of spending without a monopoly on advertising on Facebook and Instagram?
I don't think they can.
And sure, they could cut back on the tens of billions of dollars they're putting into reality labs.
That might help.
But at some point, they're going to run out of people to sell to.
And they definitely couldn't survive if they couldn't rig the dice how they have been.
And while we might like the main revenue driving products and services from Apple, like iPhones and
MacBooks and Microsoft, Xbox, Surface, Office 365 and Windows, it's hard to say the same of
Meta and Google, and I believe both are very brittle as a result.
A lack of competition has turned Metascore products into Skinner boxes that live only as a result
of a combination of a black box advertising product where nobody knows what's actually happening,
and a product that billions of people rely on and use for free.
Kind of like Google Search and its associated products like Gmail and Google Docs,
which I got to admit I still really like.
Gmail and Google Docs are so good.
I have had readers and listeners ask,
I don't know when they're going to fuck them up, I'm scared.
But these companies are not competing so much as they're holding the digital lives of their customers hostage,
and using that is a means to set the terms of how they're shown advertising
that Google both controls the placement and pricing of.
They're not worried about somebody using the other product.
Facebook has really not got any competitors, let's be honest.
Gmail kind of does, but does it?
It's just, it's a big mess.
But, you know, if you're looking for an alternative product to something you already own,
well, there's a great place to go to, and it's whatever the next thing you hear is.
And I'm sure they're very trustworthy, and they would never, ever embarrass me.
And you should take your wallet and just fastball it at them.
So hard you require Tommy John's surgery.
Please buy the thing.
Or don't.
I don't know.
I can't make you.
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.
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 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 I-Heart radio app,
Apple Podcasts, or wherever you get your podcast.
Huber me.
I need some jokes to make me seem funny.
Run a business and not thinking about podcasting, think again.
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And as the number one podcaster, IHearts twice as large as the next two combined.
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Think podcasting can help your business.
Think IHeart.
streaming, radio, and podcasting.
Call 844-844-I-heart to get started.
That's 844-8-4-Eheart.
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 Leila 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 long.
Don't let that be the reason you don't do it.
An Olympic champs Gabby Thomas and Katie Ladeke.
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.
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.
and 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.
Hey, I'm Jared 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 that. 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 rant
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.
Cream of 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 Mike Coutura Podcast Network available on the IHartRadio app, Apple Podcasts, or wherever you get your podcasts.
And we're back.
As I was saying, Google doesn't have to worry about losing you to another search engine, nor does it worry about you leaving Gmail or Google Docs or any of its other products, because leaving is hard and advertiser's sense.
simply do not have another choice. Google has such a large market share of so many markets
and just one easy ad platform to use them, that would be painful, and also where else do you
find this many customers? It doesn't even have to, as Microsoft, Amazon and Apple have had to,
diversify its business, or add other revenue streams besides the big two of search and online
advertising. Yes, they make money on cloud, yes, yes, yes, but that's not going to replace the search
revenue. Don't take the piss. I'd even go as far as to say that Google can't diversify,
at least culturally speaking. When it was a young company, Google had a policy where engineers
could spend at least 20% of their time on projects that interested them. This in turn led to
the creation of beloved things like Google News, which was a passion project of Krishna Barat,
and Gmail from Paul Bouchet. And what's crazy about this is Google has kind of moved away from
this model. I'll get to it in a second. It's extremely blow.
boiling. In the 2010s, as Google entered his adolescence, it began to resemble, sadly, the kind of
stodgy corporate behemoths it once fought, cutting perks and ending permissive workplace practices,
and one, it seems, was this 20% time. Whether 20% time still exists is genuinely a hot debate in
the valley. While Google insists it remains a policy, some Google employees claim it no longer
exists, or that it's effectively become 120% time, meaning that you effectively have to do it
on top of the rest of your work.
In a report by Quartz from a few years ago,
one engineer blamed the death of 20% time on Stack Ranking,
where you fire the bottom percentile of workers
based on their performance every quarter or so.
And if you want to know who to blame for that idea,
it's Jack Welch, who I went into detail with about,
and just every time I think of Jack Welch,
you need to listen to the shareholder supremacy series, by the way.
It just makes me so angry,
because you can see his influence everywhere.
It makes me so...
No, no.
Anyway, Google's rock continued in 2015 when they hired former Morgan Stanley Financial Executive
Ruth Parrat is its CFO.
Porat's arrival was celebrated by the markets, which added $60 billion to Google's market
capitalization as the share price went up, in part because they expected Perat to bring Google
to a level of fiscal discipline it sorely lacked, by which I mean that Google made over
$17 billion a year in profits, which was not enough for them.
And as the information reported in 2021,
One, this involved killing products that from the outset didn't appear to be going anywhere.
But, you know, things take time.
Products take time.
Gmail took time.
I don't think Gmail made much money for the first few years.
They were still working out to make money off of it.
Sometimes you need to experiment, and I don't know, innovate.
And man, though, man, they love killing products, though.
Google, they claim to invest in innovation, but they really don't.
and their reputation is so good that there is an entire website called Killed by Google
that lists everything they've killed.
While some of these products had a decent run, like Google domains, which made it nine whole
years, others were terminated in a matter of months, like GameBuilder, which was a beginner-friendly
tool for building multiplayer 3D games that lasted, wow, five whole months before Google got
out the bolt gun.
The reason I bring this up is because it's very illustrative of Google's biggest threat
that they have from antitrust action.
Their cultures moved away from innovating and creating things and experimenting to make things.
And what sucks is they didn't have to do this.
They've been profitable for, what, decades now?
But I think there's three reasons why they can't innovate anymore.
First of all, employees aren't really provided the opportunity to work on promising ideas without fearing the, well, they'll get fired for not doing their main job.
Secondly, even if they manage to create something new and interesting, Google has shown a total lack of patience.
And they won't let things mature and grow over time, which kind of echoes a wider financial problem.
You see it a lot in media and indeed podcasts where podcasts are given, what, three months to sing for their supper and if they don't survive, they're killed, same with TV shows.
And guess what?
It's something that tracks very precisely with the management consultants like Sandhap Hesai coming in.
But the third thing, by the way, is the most obvious, and that's Google does not need to innovate, or at least they don't believe they need to.
Google makes an absolute killing from search and advertising.
So why would it bother?
Why bother trying to make something interesting or unique?
Something that might make, ugh, ugh, disgusting.
Only $50 or $100 million a year?
Ugh.
Your big, nasty monopolies gushing billions of dollars without you doing anything.
You just mess with the customers every day.
More money comes out.
Why would you possibly try and make a new business line?
Idiot.
But that's the thing.
This is how Google runs.
Why would Google possibly tolerate a product that didn't turn into a hypergrowth market or look like it might?
Who cares? Why would you bother? Why? When there's nobody to compete with, why would you give a shit?
And that's the thing. We may call this company Google. We may refer to Google as the owner of Google search, the creator of Google search, the creator of Gmail. But Google is not Google anymore.
Google, the company that was beloved for their search product and for their email product.
they're dead. The company with such cultural importance that its name is a fucking verb is
dead, killed by people like Prabagar Ragavan, Liz Reed, and Sondar Pishai. What exists today
is a private equity firm with a bunch of flailing business units bolted onto a monopoly over a
search engine and its associated advertising run by a former management consultant called Sondar Pishai.
Google's culture is burning in broad daylight, its workers, and I hear from a lot of
of you, and I love hearing from you, I will protect your identities. They're furious. They're furious
of what has been done and what is being done to a company that used to be synonymous with
innovation and experimentation. And this is why I want to emphasize how dire things are for Google.
Keeping the lights on in Mountain View, it isn't cheap, and I'd argue that Google is only
capable of operating at its current scale because of its bullshit dominance of search and ads.
If it's forced to, for example, divest its lucrative advertising business, which would require
them cutting off pretty much the most profitable business of all time, or sharing data with
competitors, which would allow their competitors to compete, or jettisoning its Android or Chrome
businesses, I'm just not sure that Google, both culturally and financially, is capable of competing.
I don't think they are a competitive business in the way that most businesses are.
Let me give you an example.
my PR firm, right? Or any real business. I have competitors. If I'm shit at my job, if it gets around, if people are saying I'm shit, if I do a bad job from tons of people, someone else can be hired in my place. The same thing happens from many small business owners. And just regular people at jobs. If you're shit at your job, you get fired. And in turn, you would lose money. Thus, you try and do a good job so that you're kept at your job or your business keeps getting money so that the business keeps going. I know this sounds very obvious. But
Google, on the other hand, has never really had to compete with anybody on quality, not of search
results, not of ad product, nor have they had to compete with, I don't know, other advertisers.
Search is a monopoly unto itself. They bullied and used mob-like tactics and just sworets of money
to get people out, but on the advertising side, they've never had competition. They built the
marketplace and they shut the fucking doors behind everyone. I guess in front of them. Yeah, whatever.
But taking this a step further,
I just don't believe that the company with more than half of its revenue
coming from such an obvious monopoly is built sustainably.
And in fact, I believe that Google's search monopoly
is used to bankroll their other oligopolis in other industries,
like cloud and mobile and internet browsers.
Cloud is profitable-ish.
Took them a while to get there.
And with the mass build-outs they're doing for Google Gemini,
do you really think it's profitable anymore?
Let me put it simply.
Google is not a company built for competition, and I believe it will collapse if it's ever forced to compete.
I don't think this company is capable of the kind of adaptation or reinvention it would need.
I think it's lost that ability, and it's lost it through tens of thousands of layoffs,
and being run by a guy whose only job is to make number go up.
The vibrancy and culture that once existed in Google is dead and gone and isn't coming back.
And while Google is significantly more profitable,
well, there's a chance that it ends up shattering
and turning into several different Yahoo's.
Hey, that reminds me of something.
Their current search head, Prabagor Ragavan,
where did he used to work?
Was it Yahoo?
Is that good? Is Yahoo a good company?
Oh, fuck, their own bioprivate equity film, that's not good.
Well, anyway, in the next episode,
I'm going to dive into the specifics of how Google amassed its monopoly,
and what breaking it up might actually mean for the future of the country.
company and the internet at large. I'm very excited to talk about it because I want to see these
companies burn. I want to see companies that refuse to compete, that refuse to act on human terms,
that treat their customers like shit, that are run by insanely rich guys who don't talk to regular
people. I want to see them burn. If you're a big company and you do a good job, I had no
problem with you. None. But if you must exploit to get rich, fuck you, I'm coming for you. Every week,
goddamn day. Thank you, listeners. Thank you for listening to Better Offline.
The editor and composer of the Better Offline theme song is Matt Rosowski. You can check out more
of his music and audio projects at Mattisowski.com. M-A-T-T-O-S-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 YourEd.
to visit the Discord and go to
our slash better offline 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 us out on the iHeartRadio
app, Apple Podcasts, or wherever you get
your podcasts. Another podcast
from some SNL, late night comedy guy,
not quite, unhumored me with
Robert Smigel and friends, me and
hilarious guests from Bob Odenkirk
to David Letterman help make you
funnier. This week, my guest, S&L's Mikey Day and headwriter, 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
friends on the IHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Life 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 a
big 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 Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner
of IHart Women's Sports. Hey, I'm Deanna 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.
it BS. Unfiltered conversations
from night sweats to futas
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 a turn, 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 Tiana Maria Riva on the
IHeart Radio app, Apple Podcasts,
or wherever you get your podcasts.
Hey everyone. It's Ryder Strong
and Wilfredel from PodMeets Whirled.
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 Pod Meets Twirled on the IHeart Radio app,
Apple Podcast, or wherever you get your podcasts.
There are times when the mind becomes a dead.
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 agoraphobic. This is a month of 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. This is a
an I-Heart podcast. Guaranteed human.
