Better Offline - The Department of Justice V Google Ads: Part 1

Episode Date: September 9, 2024

In this episode, Ed Zitron is joined by Jason Kint, CEO of DCN, to set the scene for Better Offline's coverage of the Department of Justice's second antitrust case against Google, one that alleges that "through Serial Acquisitions and Anticompetitive Auction Manipulation, Google Subverted Competition in Internet Advertising Technologies." This is the first in our ongoing coverage of the trial, which Jason will be attending in-person in Washington DC. For more information, visit https://usvgoogleads.com/ and follow Jason at https://x.com/jason_kint 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/@edzitronSee omnystudio.com/listener for privacy information.

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Listen, Inside American Soccer with Tom Bogart and Tab Ramos on the eye heart, radio app, Apple Podcasts, wherever you get your podcast. AllZone Media. Hello and welcome to Better Offline. I'm your host, Ed Zittron. And today I'm joined by Jason Kint, the CEO at the Trade Association, DCN. Jason, thank you for joining me.

I'm pleased to be here. Thanks for having me. So Jason is joining us today and we'll be joining us more regularly to talk through the massive antitrust trial going on with Google, the second of them. Jason, why don't you set the scene of what's going? on. Yeah, sure. Thanks, Ed. Yeah, we just wrapped up getting the opinion on the first trial, which was the search trial, where Judge Meta decided and issued an opinion that Google has a monopoly in search and a monopoly and search ad text ads. So this is trial number two. It's going to be starting on Monday, the 9th in the Eastern District of Virginia. And this one is focused on the

ad tech part of Google's business and everything related to it. So how is that different? Because a lot of people see them kind of one homogenous entity. Sure. Yeah. I mean, the advertising, for people to understand, the advertising business for digital has now become almost entirely a live kind of auction marketplace where if you think of all these ad units across the web, they are being bought and sold in near real time to the highest bidder. And Google as a company has both the software and a lot of the data that powers the decision making. And so if you think about kind of on the buy side, a bunch of companies bidding on advertising units that they want to own to get in front of consumers. And on the other

end, you've got the owners of those units, whether it be publishers or Google itself, Google is the largest player on both sides of those transactions. And they also run most of the auctions too. So what is happening in this trial? So the Department of Justice started investing Google back in 2018 and they spent a few years doing it. The state attorneys general led by Texas filed a lawsuit back at the end of 2020 saying that Google's ad tech business violating I trust laws. And since then, the Department of Justice filed its own lawsuit back in January of 2023. So just 18 months ago. And they did it in Virginia where it's kind of known as the nickname as the Rocket Docket because it moves so fast. And so in less than 18 months, this one's gone to,

it's gone to the point where now we're about to have a trial starting on Monday. And they'll present their arguments. So it'll take about four weeks. And the judge there, the district judge, will determine an issue her opinion on whether or not the various charges that are in the complaint, she agrees with them and whether or not there will be remedies for it. And what are the judges, roughly speaking? The judge, Judge Brunkema, what are the charges? Yes. That Google has a monopoly in, I believe, three different areas of the advertising supply chain.

And so that's the software that publishers use. That's the software that runs the auctions. And that's the software on the buy side that's being used to bid on the ads. And in those areas that they've also abused that monopoly power. How have they been abusing it? Let's get into it. Get into it. Well, you know, let's see how they're abusing it.

I think, I mean, I think one thing that's helpful. and, you know, fortunately and maybe unfortunately for Google, their own employees and some of the discovery for the lawsuit did a comparison to the stock market when you think about this kind of live marketplace. Maybe that saw Flash Boys and read the book on high speed trading. This is that plus maybe even more intense. Do you explain a little bit about what that means for those who might not have? Sure. That means that if you think about these advertising units, that sit there across the web, that there is incredibly high speed trading of those units that

are happening in milliseconds, meaning that, you know, in a blink of the eye, there are parties that are both bidding on and then delivering on ad units based on a whole range of targeting requirements and pricing. And then there's rules around those auctions. And so if you think about kind of the way stock market works, which is also what happens. And in real time, people are buying and selling stock using machine, entirely using machines that have been programmed to handle the bidding and the marketplace. Google is doing that for the entire supply chain, both the buy side and the sell side. And so, you know, the comparison that the Google employee made and also the assistant attorney general did when they announced the lawsuit was to the stock market, as if Google,

you know, was both buying, was leading and own a majority of the software, both for buying and for selling and for running the actual auctions themselves. And so what's happened so far? You've been, so you're quite close to you're about 20 minutes from the courthouse, roughly? Yeah, maybe about 20 minutes of the courthouse. There's been a number of what they call pretrial motions for a variety of things to kind of figure out the rules of the road for the trial when it starts Monday.

Some of that's just logistics. Some of that's really important in terms of like what evidence will be allowed and not allowed who will testify and not testify, etc. So what have you actually witnessed so far? Like what you've been in a few of these pretrial motions even? Yeah. Yeah, I mean, well, that's one thing. I just start with the judge because this actually a little bit in the weeds here,

but this lawsuit originally started out, it was going to go before a jury of Americans to make the decision. So you think about the just department having to explain. this topic to the average American, that changed a few months ago based on a legal maneuver that Google did. And so now the judge is going to be actually the one that will issue the verdict and make the decision. And, you know, my observation is she is incredibly experienced.

She's been a judge for quite some time. And she's had some, you know, very, very significant cases over her career, you know, involving from al-Qaeda terrorists. on down to, you know, 9-11 related cases. So she's not intimidated at all by anybody in the room, including Google for sure. And so in that regard, you know, I'm very optimistic.

She seems to only care about the law and justice, which is what you wanna see from a judge. You know, Google, like with the search trial, has the best and the brightest attorneys that are out there. You know, three or four firms working for them, and they've got half the room full of their people. This is really, really important to them. The Justice Department wants to break up,

the outcome they want is they want to break up Google. And so that's what this trial is all about. How do you see their chances? If you asked me, and I'm sure I was on the record about this back a year ago, I would have said that the chances for this one were higher than the search lawsuit than they just won. And so I also felt pretty optimistic about the search, lawsuits once they finished closing arguments because I thought they did a really good job explaining their case.

This one, I think it's even more obvious going in. I mean, to put real numbers around it, Ed, I mean, they, the Justice Department's analysis and their experts analysis is that Google has over 90% of the software that publishers use to serve the ads. And then they've got over, they've got 98% of the mobile queries. We learned that from the last decision. So on the buy side, they've got, you know, almost, you know, 98% of the advertising demand that's coming through from search ads. So, like, on both sides of the market, they've, you know, and then they get to write the rules. So it's a problem. And as far as the original allegations go, can you kind of break those down at all and explain what the specific, what the specific things that you would consider the most important

points of this trial. Yeah, sure. You know, that one, that they took the market power that they had on the advertising demand side, and that they used that in order to create market power, dominance, if you will, in other parts of the supply chain. And so one that I think is really important is that we now have a decision from the other court on that dominance on the demand side. And so Judge Meda already did the work of saying, you know, he believes that Google, you know, they prove the case, just for their case, that Google

has a monopoly in search and in search text ads and that they abused that. And so that decision is no longer just allegations as it relates to Google. And this case claims that they use that market power to create dominance elsewhere. And so they walk in, I think, in a much better place based on the prior opinion that came out in August. You know, second thing I'll head on is that they tied, you know, that to other parts of the business, so the exchange in the, and the ad server business in order to, so basically to force people to use the other products.

So as an example, you know, the argument or the allegation is that you weren't a, you able to get access to any of that demand unless you use Google's AdEx product. And so, you know, the evidence looks pretty clear on that, but they're going to have to present that case. I think a third area that I hit on is that the market itself is properly defined. That's always important for antitrust trials in cases. And so this case is all about something called open web display advertising. and Google will try to blur that line. What is open web display advertising?

I guess it's easier to explain it, what it's not. And that's what bothers Google is it's not closed platform. So it's not advertising on TikTok or not advertising on Facebook. It's advertising that's available over the web browser in which companies can participate in auctions on the buy side, or they can participate auctions on the sell side, and these are auctions that are happening for display advertising units on websites.

And perhaps it's a good time to actually take a step back and ask, how does Google make money from advertising? What are their advertising units? Because you've mentioned there's the bidding process, but where do we see Google advertising? Well, a majority of the advertising, and it's become more and more over each year, is actually on Google's own properties.

So interesting up, that's where they make the most money because they don't have to share it with anybody else, right? And so you've got the ads on search. You've got the ads on Gmail. You've got the ads on YouTube. So it's on what they call their owned and operated properties. And then also Google serves ads across the rest of the web. And that's where they get a lot of scale and a lot of data. And then they take a percentage of the action on the buy side, percentage of the action.

the sell side, percentage of the action in the auctions, and that all adds up so that they're taking, you know, allegedly 30 to 32% of the revenue for just the technology that's being used in order to serve those ads. Does the suit suggest, does it give any idea of what the balance, so that you said that most of their advertising goes through their own properties? Does it balance that out at all? Does it explain? Yeah, I think it's in there, and it's certainly in their SEC filing. You know, I think, you know, this gets to kind of one of the arguments I think you'll hear Google make and certainly their proxies and kind of their advocates are making is that the part of their revenue that serves on other people's properties on publisher's sites is only about 15, you know, I'll say 15 percent or so of their revenue and it's declining the last couple years.

So it's not growing. it's flat to declining. It's not that material. And that's their off-property revenue. That's their off-property revenue. That's very bad for them. But the common sense piece, well, yeah, but that's where they also have the lower margin because they have to share it with people. The common sense piece is that, well, why, if that wasn't that important to them,

then they'd be offloading it, right? Because why would you want to go, get sued by the United States Justice Department and potentially broken up if it's not that important to you? And then two, that ignores, that's just the revenue piece, but I think it's important to understand, Ed, that like, and this will come out, I think, in a lot of the documents, that the data that they get from those auctions and from serving ads across the web and from tracking users across the web. I mean, there's this important moment in time that will come up in the trial, I believe, where in 2016, Google merged all of the ad tech data they have with all the search data they have. have with all the location data they have, with all the Android data and all the Chrome browsing data into one single profile, which they promised they wouldn't do and they went ahead and did it. And if you think about the value of that data that underpins it, that's

really important. So when you say it unites those profiles, is it that they have a profile on you and me? Or do we just not know? I mean, we expect that they, you know, whether it's a synonymous indicator or a placeholder for that user, but they, they know enough that it's this device, which is attached to a person, and I know all this other information about that. Yeah, this person may resemble that because I see that in 2016, they dropped a ban on PII, personally I identify information, but is this separate to that? Is it the combination of everything else? I mean, that's what the reporting was in 2016,

and that's what the evidence that's starting to bubble up was. They called it Project Narnia is what we just learned. But that they merged, they dropped their ban on PII being merged with search. Julia Angwin from Publica, I think, did the report. And so that, you know, that was removing the guardrails, basically, at least in my mind. And I think that will be a part of the evidence. Another podcast from some SNL late-night comedy guy, not quite.

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Me. Is there anything to the idea that because you're from Harvard, uh, You only got in because your parents made a huge donation. The group. The yard herds, right? That's the name. The Harvard Yardt Yardt.

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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, 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.

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I'm sure there's surprising stuff, but what happens now? So we're pushing this episode out on September 9th, the day of the first trial. So what happens then and what happens after that? Yeah, so the first couple weeks the Dust Department will present what they call their case in chief. It's their, you know, it's their evidence. So they're going to have a slew of witnesses that have already been identified, both Google employees, ex-Google employees, CEOs and top founders of a lot of the competitive ad tech companies, experts, et cetera, that, you know, probably have already been deposed and will now,

answer questions on the witness stand. And they'll have a ton of exhibits that, you know, we've probably seen less than 5% of them, I'd say, at this point, to prove their case. And Google have a chance to ask questions to throughout, and then they'll present their defense. I expect it'll take about four weeks total. I think important things for people to know going into the trial, you know, I already covered that I think the judge is, is perfect for a case like this. So that's very optimistic at this point. Also, I would say it's very important to know that there was an important hearing last week in which it's happened with multiple lawsuits against Google,

where Google got in trouble for not preserving documents while. I was going to say, yeah. Yeah. And so Google, at a point a number of years ago, issued a memo. from their chief legal officer and change their systems so that any chat messages would by default delete after 24 hours is the way it's been alleged. And unless the employee actually proactively turned on their history and turned off that purging because they were under a litigation hold, then the evidence was lost. And so the judge very much expressed her concern

about this had happened and that probably a lot of evidence had been deleted and that throughout the trial she's going to have to take that into account whenever Google sends somebody up to the stand with a stand that she's going to have to have her own inferences on whether or not this is a reliable testimony and whether or not there's you know information and exhibits that were not available to her because of this policy that's like really bad for Google going to do a trial you know like they're already had one hand time in the back Well, I think that ultimately she could decide to infer that, what they call adverse inferences. She could basically decide that there has been evidence that's been purged in her mind,

and therefore Google was trying to hide stuff that would have been incriminating to them or prove the case of the Justice Department. Doesn't that weaken the case potentially on appeal if she does that a lot, or would it be very carefully used? It would probably be carefully used. I think, you know, Andrew standing up Judge Meta had the same concern and decision, you know, coming out of the search opinion. But he said that he didn't need it, you know, he didn't actually need to rely on it,

that he was going to find against Google that it was a monopoly and abused its power without it. So he didn't need to have that intent. She says the intent's really important to a case like this. So we'll see how she, how heavily she weighs on it at the end of the day. So on the ninth, the Department of Justice will begin making their case. They will. They will. Yep. So has anything interesting come out yet as far as the initial motion? And have we seen any of the exhibits provided in advance?

Sure. Yeah. We've seen, I mean, even the original complaint we've seen, and through reporting, we've seen some of the evidence and details on a lot of projects. that Google had. This one's a lot of there's a lot of code name projects which will make it hard to to keep up with but there's things like you know Perrault and Bernanke and all these like fancy names Bell and they each have a little clever story behind them Jedi Jedi Blue and behind those fancy code names are typically experiments they would call it where Google is testing making changes to its auctions in order to drive some sort of outcome, whether be more revenue for Google, whether it be more market power or more, you know, more business for Google,

you know, driving more revenue to the publishers or the advertisers. Like, it's them playing with the auctions. And so we've seen some of the details of those. I think what we're going to see now is some of the intent behind them and some of the communications internally about them. I'd be interested. So Jedi Blue, that was the collusion with Facebook, right? That was the alleged collusion with Facebook. It's very much still around. Well, I thought that that got kind of dismissed in Europe. Yeah. So Google has made that communication arguments through some of their proxies.

It actually was dismissed in the state AGs had their own case that I mentioned was filed at the end of 2020 in the Eastern District of Texas, which was then moved to New York, Southern District of New York. And while it was there, that was dismissed from the case. I won't go into why or when that that was accurate. it. But that specific charge, which had potential criminal, criminal implications for them, was dismissed. The complaint then and the lawsuit then moved back to Texas for a different reason. And that discovery was reopened up about four months ago, I'd say, on Facebook. And it also led to a deposition of Sundar, Kai, the CEO of Google, because he has unique knowledge about that deal.

It also led... And what was the deal? The deal, as alleged, was that Google Jedi, Project Jedi was, as we understand it, was Google's attempt to match or have their version of what's called header bidding, which was this coding layer at the top of a web page that opened up auction so that other parties could compete and participate in auctions, live auctions. And it was a threat

to Google's business because it meant that a publisher could participate, put on their header of their web page, this code, which would allow them

to open up their auctions to outside parties. So it didn't have to go through Google. Jedi Blue, so if you think about that as a threat to Google, Jedi Blue was a way

to do a deal with Facebook as alleged so that Facebook would not support header bidding. that Facebook would instead not participate in header bidding, which would be bad for header bidding,

and would instead exchange value with Google. And that value, as I understood it, from the complaints, was, and the reporting was that Facebook would get additional matching of users in the auctions that Google ran, and they would get speed preferences in the auction. So if you think about the timing of bids. But auctions within Google's, that product. Within Google system, yep. So that is an obvious, that's an obvious use of monopoly power.

That one feels, how is that being, I'm shocked that that hasn't caused more problems for them. Well, where it got dismissed, it was, it was narrowly read by the judge as normal. You know, these are two companies that are competing with each other still at the end of the day. And they were both getting a value exchange that made sense for them. And Facebook was acting the best interest of its business. It was a questionable ruling, but what's important to understand is that still it is part of the conduct for the Justice Department case starting next week. It's a part of the conduct for the State AG case. And Sundar Bukai has now been deposed about it in the last two months. And the attorneys all flew over to the Nye Kingdom to depose Facebook's

project manager on it, who also briefed Mark Zuckerberg. ahead of his meeting with Sundar Pekai. And so, you know, it's very much in the, in the documents when you dig in, there's stuff moving very quickly that Facebook was trying to fight and Movo was trying to fight. And that project manager from Facebook is on the witness list for the Justice Department in the next few weeks. Oh, baby. I cannot wait for that. As discussed listeners, Jason's going to be back quite a few times in the next few weeks to discuss the stuff. I'm quite excited by this. So what, Are there any other, like, notable projects on there, notable, like, Perot and such that you've mentioned?

Yeah, you know, there's, there's a project in which the, you know, I don't know how much you want to get into, like, the way auctions work, but typically, okay. So a lot of these auctions and certainly Google's auctions for their search ads from the very beginning have always been second price auction. So, so the company that, the bidder that bids the highest doesn't actually. pay their bid. They pay the second highest bid plus a penny. That's typically how it happens, right? And so there's all sorts of rationale behind that. And so there's a project in which the actual price that was paid was basically the third highest. And then the dollar amounts, so they paid the second highest, I'm sorry, and then they delivered the third highest. And so they kept the margin in between and then reinvested it back into boosting other auctions, basically, bids.

It was called Bernanke. I think that was the plain Bernanke. And then there was another flavor of that. But it basically was like rerouting some of the margin between the second and third highest back into the system to increase other bids. That makes sense. But sorry if I misunderstand. How did that benefit Google?

Pardon my. Well, it allowed them, the allegations are that by then rerouting that money back in and boosting other bids, it allowed Google's system to win more auctions. So it was the same money flowing, but it allowed them to win more auctions, which helped them take market share. It's crazy. It's crazy that it seems not just it seems like an outright con in so many places. I mean, you know, Google will try to argue for each of these some sort of benefit to the advertisers or to the publishers on one side or the other. But I think ultimately what we'll see, and I think it will be most damaging to Google, well, there's likely to be evidence that will show both of those considerations going into some math to say, how does this help Google? You know, and so, you know, if you're able to see both sides of the transaction, you have a clear conflict of interest and you're able to, you're able to, you.

you know, manipulate the both sides of the business rather than acting the best interests of both sides of the business individually in a way to benefit yourself. Do we know yet who's going to get the post or cross-examined? Yeah, we have a witness list for sure. Yep. Who you're looking forward to? You know, there's a couple ex-googlers that actually tried to get their testimonies quashed, but that didn't happen today. I mean, so last week, I guess now.

So, but there's a few ex-employees that know a lot about the ad business. They've been around a long time. I think it like Lasala. There's a guy named Scott Spencer. They just know a lot. And, you know, Neil Mohan, who ran the double-click business that was then bought by Google and ran the ad business for a long time, I think will be super interesting. I think the Facebook witness that I mentioned.

just to get an answer whether or not Jedi Blue was a problem or not once in for all I think will be interesting. So there's a long list. There's key players from the ad tech business that have competed against Google over the years or tried to. The guy that ran AppNexis,

the guy that runs index exchange, these are like, you know, people that are very, very knowledgeable in the entire history of the ad tech business that will be on this. Dan. So there's a dumb question. How big a deal is this? As far as history of the tech industry goes, how big is this? Well, I mean, the Google antitrust suits themselves, actually I use the description of the assistant attorney general Cantor. He described it as on the Mount Rushmore of antitrust cases. I think with Standard Oil, AT&T, and Microsoft was Google.

You know, this is their advertising business, and, you know, the actual advertising revenue business is $250 billion, $250 billion. They'll argue this is just their ad tech part of the business, so they'll say it's $30 or $40 billion. You know, as I mentioned, I think the data fuels, and I think this enables the rest of their business in many ways. So this is a really big deal. And this is what funds journalism, entertainment across the internet. Could that not in turn, I'm not, I think Google should get broken up, but is there a world where this is better for journalism? If they get broken up, I think absolutely, yeah. I think there's short-term concerns and any breakup outcome because it's going to be a headache.

And, you know, the benefits are going to take some time to start to play out. But if you just use the common sense, do you think about the stock market or any sort of marketplace, having a company that's on the buy side and the sell side and developing the rules, ultimately they're going to take more and more money out of the supply chain, right? And so a world in which the company on the buy side or the company on the sell side have to act in the best interest of the advertiser, or whatever, be the small mom and pop store buying advertising or the publisher on the other end being the local newspaper or national player or whatever.

Having to act in their best interests is a really, really important and common sense sort of marketplace rule where you actually have competition that are serving the best interests of the parties. 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,

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Apple Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHart Women's Sports. Hey, I'm Jared Adano. You might know me as that loud guy who yells out, help on the internet. Help! Somebody! Please!

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Sike, I'm a comedian. I'm not qualified to give good advice. Join me and my comedian friends as we riff, rant, 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 of chicken suit.

Hey, cream. 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 Coultera 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 shake 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. Do you think that this could kill Google? Because I have this ongoing theory about this company that they can't survive without their monopolies. I just don't, I don't actually think in the sense that they make more than half of their revenue from a,

from search, which they have a monopoly on, connect to ads, which they have a monopoly on, where they hoard all the data and completely rig the dice for themselves. I don't see how Google survives this in its current form. I don't even mean just breaking them up. I just mean if they are no longer allowed to rig dice, quite how they've been rigging them. Yeah. In a breakup scenario, then I think your answer's right,

that they don't survive it. And maybe it's best for shareholders anyway. If you study AT&T and other standard oil, et cetera, you know, it could release more value anyway if there's if YouTube separated or any of the ad tech businesses separated. How rely are they? I mean, that takes me back a little bit, Ed, to the search trial. I mean, my biggest observation out of the search trial,

and I spent a lot of time studying it and being in the courtroom, that I think hasn't been totally appreciated yet, is that how important Google's scale in terms of search queries is. And so they have 98% of, the mobile search queries, 98%. And that ability... Of the mobile search market? The queries themselves being asked into search prompts on mobile.

And so... And just to be clear, you mean across every single search engine. Oh, yes. Sorry, yes. Across general search engines is the way it was defined. That is completely insane. And so if you think about the scale of that, and importantly for what they call tail queries,

so a tail query for the listeners, if they're not aware, is a query that's never been asked before, right? And that makes up, like, what, a certain amount, like a surprisingly large amount of queries? 15% is what, you know, what we learn in the UK's investigation of Google, was that 15% of the queries, any given day, are tail queries. And, you know, those are the things

that have never been asked before in a search prompt. And so Judge Meta used several times during the trial in the fall, I'll use the example of Taylor Swift and Travis Kelsey. There was a moment in time where nobody had ever put those two names together in a prompt before, right? And I don't know how quick it was after they started dating, but it was a new query. And unless you actually had some context for it, you didn't know what it meant.

And so if you take that to the 15% of the billions of queries that are happening, you know, maybe given week on Google, their ability to. to understand those queries because of their scale and to decide what to do with them in terms of driving clicks where they go to satisfy the users and to target advertising is extraordinary relative to anyone else, including 19 times on mobile,

19 times more than the rest of the market combined. And the rest of the market includes Microsoft, right? A $3 trillion company. So they just have this massive data advice. that no one else could possibly have. Right. And it's in particularly valuable in terms of recency of data and queries, like the new stuff. That being a, yeah, so you can anticipate what ads people might be.

Right. Or just where they want to go on the internet when that search happens. But how can they use that data to help themselves? Well, one, it locks them in because there's nothing more frustrating than searching for something that's a new, fresh search. It's typically related, interesting, it's typically related to news, right? It's things that are happening in society any given day. That probably journalists are actually the ones doing all the work and carrying the cost and burden of. And then, you know, if the search engine doesn't know the answer or if it gives you back results that aren't very good, you get frustrated, right?

So you end up back on Google because they're better at it. And they just lock that in. And so, you know, that 98% if you take that and apply it to the future, and it's particularly AI. world where everybody talks about in the AI world how valuable capital is, right? So and how valuable compute is. Amazon meta, you know, these companies have enormous compute, Microsoft, Google, and enormous capital. But what they don't have is what Google has, which is that, that query scale. And so Google's ability when it wants to to entrench itself even further is pretty significant in terms of training large language models and and you know being able to respond

appropriately to a prompt in the AI world and so they could ultimately I think you know based on what I was seeing they could squash even Microsoft and open AI when they want to right and so so do you think that they'll do do you think that this could have wider ramifications than just Google I think it could yeah I mean I think if you're watching this in your Microsoft or your Apple for sure you're you're thinking really hard about how this could unlock opportunity for you. So I think this is a big one. So what are you excited about? What is the part of the trial?

As we go into this, what are you really looking forward to as a sports fan? As a sports fan. You know, I think the great challenge, and I think the Justice Department did a phenomenal job of this in the search trial, is being able to tell the story and explain it to the judge in the room, right, into the public, explain their case. And I think, you know, they did that in the complaint very, very well. I think people should know as much as, as much as there's this reputation that goes back a long time that people in D.C., whether it be lawmakers or regulators, don't really understand technology. I would just really strongly suggest that they're wrong on this one. And the attorneys that are

involved and they were involved in the search trial and now involved in this ad tech trial, they really have done their homework. These are, you know, these are really, really strong, you know, strong and competently technical folks that can dive in and understand how things work. And they've done their homework over the years. The questions that they were asking back in 2018 were already pretty impressive. I mean, they were the questions that the top ad tech company people would be asking, you know, the people in the industry would be asking, and then they've been, you know, studying that for for now almost five, you know, five years before they filed their lawsuit. And so I'm really interested in how they present their case and tell the story for sure.

You know, one thing that also will be interesting is the chill, I guess I described as the chill over the room, you know, I don't think it's a secret that I was involved or, you know, had means with the Justice Department over the years on this, on this case. And one of the things I told them very early on was that probably the greatest symptom would just be the lack of people willing to talk to them. Right. That everybody does business with Google. And Google is probably the most important business partner for most companies in terms of their news and information being found, in terms of their advertising being delivered, et cetera, et cetera. So you're going to have a lot of witnesses that are under subpoenas and are there because.

they were ordered by the court to be there, and they're going to have to testify to the facts. And that will be interesting to see. I don't think they'll be talking much in the press about these issues. And do you think, you've kind of hinted that the press hasn't been covering, like they've been covering it, just to be clear. But why do you think that this is, this feels like it should be the only story everywhere, but it's quite quiet out there. Again, people are still covering it.

But, yeah. I mean, I think the chill piece plays into that, too. too. And so, you know, both, I don't want to say they're fearful of covering it, but at least some of the trade press, Google is an important advertiser for their events and for their publications. The DC Press, Google is probably one of the biggest sponsors of their sites and their newsletters. and so that doesn't motivate them probably to be there. And then on top of that, the resources are constrained because Google's sucked up a lot of the revenue. So most newsrooms don't have enough.

We're not in the day where all the local, you know, Chicago, L.A., New York, all these different publishers could all send their reporters. So they instead rely on like the Associated Press or some sort of wire reporter. Right. Yeah. That's so difficult. It's a difficult. I find it's quite difficult to analyze because even like asking you, how has Google used its monopoly?

It's a multifaceted answer. And it almost feels like people don't really realize how big Google is despite knowing it. 98, just so I'm clear to repeat this, it's 98% of all searches on mobile. That's right. That is insane. Yeah. Yeah. That is like Ford, every single truck being made by Ford other than like a tiny amount, but also every road also being made.

It boggles the mind. Yeah. Yeah. And then the data that comes with. They'll talk about the revenue from that, but then the data is what underpins all of this. And it's in the case throughout. And the importance of that data and the scale of it. Almost feels as if the money isn't quite as important.

Or it is, but just the money is not enough to analyze it. I agree. I agree. I mean, I think the data piece is every bit as important, and it informs and gives unique advantages that no one else has. If you think about being able to merge that mobile query data with the ad tech data, with the browsing data, you know, with the Android data. So, yeah.

So the press, I have. I think I'm optimistic that there will be more trade press because this is advertising specific that will show up at least for the first week and that will be good. On the flip side, I think also it's important to know that this courthouse is fairly unique in that it doesn't allow any devices in the building. Any? Any. Where do you put them?

You just don't bring them. You're not allowed to bring in the building. So there's no streaming, there's no recording, there's nothing. Is there a live broadcaster? There is an overflow room where they will have a broadcast into the other room for people that are in the overflow room. But you can't bring a device to record that. You're not allowed to read a device into the building. What's their rationale with that?

I think it's old school court rules. And, you know, it does, it limits the ability for the public to watch the witnesses and get visuals. And so I think that way this courthouse is, you know, know, this may be interesting from a Google perspective. I mean, it sees a lot of very sensitive cases. It's in Northern Virginia. So I think the CIA, the Pentagon, like this judge, you know, as I mentioned, dealt with some pretty sensitive matters, criminal matters over the years.

And so I think that's the way they're used to operating. It was kind of an amusing moment this morning when Google tried to put in the last minute request to have an extra laptop or two in the room for the lawyer. to be able to look up stuff really quickly exhibits, and she denied it. Oh, so it's going to be like, just to be clear, regular lawyers also print out stuff anyway. They do. But it's going to be just completely analog the whole way down. Google will be allowed, and the just problem will be allowed to have a device and a backup device

to put exhibits up on the screen so that people in the courtroom will be able to see the visual exhibits on the screens. So you have to write down a lot. You had to write down a lot, and she said that Google wasn't allowed to have any other devices beyond those. Because she said it's not the way we do things here. So just a clear for our listeners. Jason will be joining me every week to go through the happenings of this case. Because I feel like it's the most important thing happening in tech, while also being one of the more difficult things to pull apart. I agree.

I agree. Well, thank you for the interest. Yeah. Of course. So, Jason, where can people find you? Because you're going to be following along and dropping stuff on Twitter as well. Yeah, I will be. I'm at Jason underscore K-I-N-T.

I also do a plug if you don't mind for... Please, that's what I'm asking. USV-Googleads.com. USV-Gougalads.com. There's a coalition of organizations that are trying to make sure that the public interest is met to. And so there's exhibits are being posted there and witness lists. and all sorts of documents that as they come out.

So I think the goal of that website is to make sure that some of the challenges in the search trial are overcome for this one. Well, Jason, good luck in there. Bring your pen and paper. And we'll speak next week and get an update. Excellent. Thanks for having me, Ed. Thanks so much.

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 Matt sowsky.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 your ed dot at to visit the Discord and go to R-S-Better-O-L-Line to check out

our Reddit. Thank you so much for listening. Better Offline is a production of CoolZone Media. For more from CoolZone Media, visit our website, CoolZone Media. Or check us out on the IHeartRadio 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 Acapella band with their between songs banter. Where does your group perform? We do some retirement homes. Those people are starving for banter. humor me with Robert Smigel and friends on the IHeart Radio 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 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 Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHeart Women's Sports. American soccer is about to explode. The World Cup is coming. Ramos sending on to Ernie Stewart the chip. Score! I'm Tav Ramos. I'm Tom Boe.

On our podcast, inside American soccer, you'll get the real storylines, the biggest decisions, and the truth about the U.S. national It wouldn't be a huge surprise if our team ends up in the quarterfinals or potentially a great run into the semifinals. Listen, Inside American Soccer with Tom Bogart and Tabramos on the IHeart Radio app, Apple Podcasts, wherever you get your podcast. 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 BS. Unfiltered conversations from night sweats to futas to scheduling sacks. 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 turd, 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 Diana Maria Riva 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 Pod Meets 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.

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