BuzzMachine

Tuesday night, I’m joining in an NPR Intelligence Squared debate - Oxford format - on the motion, Google violates its “don’t be evil” motto. I’m speaking against - surprise, surprise. Esther Dyson and and Jim Harper of CATO are on my side; on the other are Siva Vaidhyanathan of the University of Virginia (who’s also writing a book on Google), Randal C. Picker of the University of Chicago, and Harry Lewis of Harvard. Gulp. (The debate will be aired later. They’re charging $40 for tickets to the live event.)

Here are draft notes on my opening. I’m writing it out but will treat this more as an outline. As always, I would be grateful for your thoughts.

My opponents have a high bar to get over. Google should be presumed virtuous until proven evil. Just because it could be evil does not mean it is. Just being big and powerful does not make it evil. In this country, we tend to value success until one becomes too successful, and then we become suspicious. How much success is too much? That is our problem, not Google’s. No, my opponents must bring the evidence of Google’s misdeeds to prove their case. I don’t envy them.

I grant that Google could be better.

* In China and in other nations where free speech is attacked, Google should use its power and influence - which are greater than even it seems to know - to refuse to issue censored search results. I wonder whether the risk of life without Google could lead to revolution. But in its defense, Google argues that a hampered internet is better for the Chinese than no internet at all.

* I also wish that Google were more transparent about the business arrangement in its ad networks. Google demands transparency from the rest of us - if we want Googlejuice - but it is too often opaque itself. But opaqueness has long been standard procedure in business.

Evil? No.

Leavening the impression of - or fear of - evil is Google’s virtue. Google does good. Our world is a better place because of Google. Consider:

* Google has opened up the world’s digital knowledge to everyone. We can answer any question, satisfy any curiosity, fix any error of fact in the blink of an eye. I wanted to know just how fast that is, so I asked Google how fast an eye blinks and in .3 seconds it told me that a blink takes .3 seconds.

* Google respects the wisdom of the crowd - that is the essence of the PageRank that determines which search results are most relevant. Google also enables us to recapture our wisdom, as it does with its analysis of flu trends based on our searches for related words.

* Google connects people. Young people today will never lose touch and I hope that will lead to better friendships and better behavior.

* Google’s ads are helping to support the creation of the next generation of content. I made $4,500 in Google ads on my blog, Buzzmachine, last year. Granted, I shouldn’t have quit my day job but Google made my blog profitable.

* Edward Roussel, digital head of the Telegraph in London, has argued that declining newspapers should consider handing over the work of technology, distribution, and ad sales to Google so they could become efficient and profitable and do what they do best: journalism.

* Google created platforms on which others can create products, companies, jobs, value, and wealth. About.com, Platial.com, Outside.in, EveryBlock.com exist only because Google made them possible. With Google’s ads, maps, hosting, services, and promotion, new creations bloom.

* Google shows us the way to a new economy that will be built out of the wreckage of the financial crisis. No longer will companies grow to critical mass by borrowing huge amounts of capital to make huge acquisitions. In the Google age, they will grow by creating networks on platforms. We have much to learn from Google’s ways.

One might say that its vow not to do evil is the height of hubris. Google is undeniably arrogant. But its executives say the evil motto is valuable inside the company because it allows any employee to question any decision. It’s not a bad rule. Indeed, I wish Google’s covenant had been chiseled over many a door on Wall Street. If only, in the poisoned process that led to the financial crisis, enough people had asked whether seeking and issuing toxic mortgages and making and selling toxic assets were evil—instead of someone else’s problem—I wonder whether we’d have reached this nadir.

As we try to understand and navigate a new world built on links, connectedness, networks, openness, transparency, publicness, trust, generosity, efficiency, niches, platforms, speed, and abundance, we would do well to ask ourselves, what would Google do? Google is not evil. Google is an example to us all.

Google does indeed have its own economy. It’s latest results:

The Web search leader reported third-quarter earnings that far exceeded the expectations of analysts, especially those who thought the company might finally fall victim to the slumping economy. Thanks largely to having contained costs better than in previous quarters, Google reported on Oct. 16 that profit rose 26%, to $1.35 billion, significantly higher than analysts had predicted. Sales jumped 31%, to $5.54 billion.

The analysts are stumped because they are not judging Google as a new kind of company in a new kind of economy. It’s different.

My Guardian column this week is a reprise of the discussion here about Google and its size in the market.

Joe Nocera tells a cautionary tale in today’s NY Times about Google’s power in advertising. The man who runs Sourcetool.com complained to the Justice Department after Google found that his site didn’t live up to its standards and raised the rates on him (Google’s way of shooing away sites it doesn’t approve of). The implication is that Google can wield too much power as a monopoly.

But in the Google age, nothing is as it seemed.

I don’t want to be accused of being an apologist for Google (which will happen anyway because my book is admiring) but I can see their stance on Sourcetools. It’s not a splog — the owner puts effort into building a useful directory, Nocera says — but it does look and act like one. Google is trying to protect us from sites — even paying advertisers — that detour and delay us from getting the answer to our question. If I ask for earthmoving machinery, I’d like to get the link straight from my first search (on Google) rather than being directed to Sourcetool, where I’ll take five more links to get a not-very-satisfying list of companies. Google says it always focuses on the end-user.

Nocera and Sourcetool point out, though, that Google holds the power to raise prices and disadvantage sites without explanation or appeal. That raises fears that it can and will act as a monopoly.

Except the issue isn’t that Google is a monopoly. It’s that Google has become the marketplace. It where we all go for information. It’s where advertisers go for us.

It’s no different from a newspaper. Even when there were two papers in towns, one of them was the marketplace for homes, cars and jobs. That allowed the paper to set rates as high as the market could bear, which was very high. Google would say the difference is that it doesn’t set rates, the market does in auctions for keywords. Except in this case, by punishing Sourcetool, Google did set the rate. And it has the power to do that.

craigslist is also no different, except that Craig Newmark set most rates at zero. He’s the marketplace now and now that he has us by the neck, he could raise rates — as eBay did once it dominated the marketplace it created (though that invited competition from Amazon, Etsy, et al).

What it comes down to is trust. Once a service becomes the marketplace, do we trust them not to use that position to gouge us? There really is no alternative. The closest was Yahoo and now even it is coming to Google to sell ads because that will be far more profitable — that is what the Justice Department antitrust division is investigating now.

But if the Feds rule against the Yahoo deal, it is in essence stealing hundreds of millions of dollars not from Google but from Yahoo. It is restricting Yahoo’s access to the marketplace. That would be as unfair as Google unfairly punishing a site that doesn’t meet its standards.

The first obvious solution is transparency. If we all knew Google’s standards and trusted that they were, indeed, looking out for the end-user and if Sourcetool knew Google’s standards and abided by them, that would blunt Sourcetool’s complaint. Indeed, part of its complaint is that it can’t find out the standards. But then here comes the Google age wrinkle: If Google revealed its standards, it would only be feeding the needs of evil spammers, giving them to manual to game the system.

Still, the bigger Google gets, the more trust will be an issue. I think they need to look at alternatives. Why not, for example, establish an appeals panel made up of advertisers and users to adjudicate issues such as Sourcetool? This would require Google to hand down its laws — or more to the point to draft its constitution: the definitions for good sites rather than spam, not in algorithm-busting detail but as high-level goals. But another Google era wrinkle appears: scale. When the web is developing by the minute, it’s impossible — and potentially limiting and dangerous — to write even the broadest definition of what’s good. And your good is not mine.

It’s all about trust. The question will be whether I trust Google or the government or the market more. I’ll take the market first, Google second, government third. If Google uses its power monopolistically and maliciously, I believe it would hurt Google’s business as some painful proportion — not all — of its audience and advertisers look for alternatives and then as entrepreneurs and competitors see the opportunity to meet that need.

The government didn’t need to go after Microsoft. Google has. That it is say, the market created an opening Google is now trying to fill with Docs and now Chrome. The irony here is that Microsoft, so long burned by antitrust harassment, is not empathetic with Google’s possible plight at the hands of the same tormenters but it wants to join in the tormenting. But that’s a different drama.

I’m not sure whether Google was unfair to Sourcetool or not. I don’t think it’s a very good service; I see it as a delay and detour, though not a malicious one. Nocera is sympathetic to Google’s view: “Listening to Google executives explain how the company’s algorithm works, I came away largely convinced that Google was operating in good faith.” But then, we need to ask whether Google used its power well in this matter.

Larry Lessig famous wrote that code is law. Today, Google is law. It is up to Google to convince us — the market — that its law and enforcement of it is just. To do that, it must be as consistent — which gets harder the bigger you are — and open as it can be.

(My Guardian column, up Monday, also touches on another solution: Competition.)

The Justice Department has hired a litigator to look at going after Google and its growing dominance in advertising.

This isn’t surprising, of course. It’s the yin-yang of American business: we love success stories but we hate too much success.

The problem with going after Google is that unlike Microsoft or earlier monopolies, the industries Google affects handed it its dominance on a silver platter. Google didn’t steal it away. Yahoo went to Google to be rescued from erstwhile monopolist Microsoft and to improve its bottom line by hundreds of millions of dollars. Newspapers–non-French-speaking ones at least–hire specialists to make their content more attractive to Google and happily take its ads–including this week’s announcement about Google digitizing and monetizing newspaper archives. See also this week’s announcement by NBC that it is handing over some ad inventory to Google. That’s not just about the money. It’s about bringing in a new population of advertisers that big media couldn’t serve (being too big–irony noted).

The agency side of the business, too, is eager to do business with Google. When I interviewed Rishad Tobaccowalla of Publcis’ Denou for my book, he explained that the giant agency consolidated all its digital divisions so it would have better negotiating leverage with Google, Yahoo, Microsoft, et al — and also so it would gather more data (as Google does) to learn more about users and target ads better.

But Google gobbles up advertising companies, you say. Well, its acquisition of Doubleclick was approved by the government only recently. Has Google gotten too big since then?

I’ve long argued that we do, indeed, need competition in the ad market but it’s not going to come from regulation. It’s going to come from getting off our asses and creating those competitors. I said that we need an open-source ad marketplace. Nobody’s heeded that advice. Meanwhile, Glam has built a non-Google network that has grown to gigantic proportion–CEO Samir Arora told me at a Burda party the other night that it now serves more than 80 million uniques worldwide, more than 40 million in the U.S. with brand advertisers. That is a competitor to Google.

(Full disclosure: I’m writing a book about Google, What Would Google Do? And I own Google stock.)

I’m an ignoramus about sports so take that dose of salt first. But while watching Olympic soccer, it occurred me to that the sport never took off in America because we prefer results to process.

I twittered that and a discussion ensued:

Richard Sambrook said: I assume that soccer comment was heavy with irony in the light of US football timeouts etc v the fluidity of the beautiful game?

Me: Point taken. But every down is measurable progress. That’s how we run companies: deliverables, metrics, milestones, deadlines.

Mohamed Nanbhay: Admittedly I don’t know much about sport but would think that football was about a result while American football about progress.

Me: Well-said. But I keep focusing on the idea that soccer is a process. On my mind because papers struggle with process v. product.

Mohamed Nanbhay: That makes sense. Football is dynamic, players think of their feet. American football is about planning and execution?

Me: Right. And that’s more American, I think: the belief that things can be planned, then executed.

Ross: Soccer is samba. Football is line dancing.

Me: I like that. Fill in the blanks, everybody: Soccer is ____. Football is _____. Football is American because ____.

Thomas Knuewer: Nice idea. So: Soccer is free trade. Football is WTO. Football is American because it’s over regulated.

Me: By that rule, then chess is the sport of the regulated EU.

Shane Richmond: Soccer is Jackson Pollack, football is Piet Mondrian. I like this game! (But not the word ’soccer’)

CharlesThomas: I think soccer isn’t big in the US because we prefer discrete units, pitch/snap/24 sec shot clock.

CharlesThomas: Hockey is kind of an exception, but play stops often enough for it to be discrete.

Me: Hockey’s not American. It’s Canadian a heart. And Canada is of the empire. Rule holds.

niltiac: You mean soccer’s slow and boring and the best team doesn’t always win? My thoughts exactly. Rugby - now that’s a real sport.

Mohamed Nanabhay: Do you think the national sport reflects in the way business is done? Strangely, they don’t play test cricket over here.

Ross: Soccer is the world’s game. Football is American because we win in games we invent.

Benroone: Soccer doesn’t take off in the US because you can’t break for adverts every 5 minutes.

ciaranj: Soccer is interesting. Football is boring. Football is American because it’s built around advertising.

Me: Soccer is flow. Football is a PERT chart.

Me: Soccer is a Google beta. Football is a Microsoft release.

Steve Baker’s book, The Numerati, is about tracking and predicting people’s behavior based on their data, and so he and his publisher are taking a page from the book to try to target advertising for it.

Somewhat related: I recommend Cory Doctorow’s new short story, The Things that Make Me Weak and Strange Get Engineered Away, an allegory for the age of tracking our data.

A few fascinating tidbits from Jim Cramer’s interview with Google’s Eric Schmidt today:

* Google accounts for 0.7 percent of GDP, according to Goldman Sachs.
* Cramer says the ad market is $600 billion and asks whether Google could get 10 percent of that. Schmid says, “Well, we could,” and then corrects him: It’s a trillion-dollar market globally.
* Schmidt says Google will make more on mobile than on desktops because mobile is more targeted and Google targets.
* GMail outage? “Taht was a screw up. We fixed that. We’re not perfect.”
* What would Google make by adding sponsorship to its home page? “Some number of billions od dollars.” Why not do it? “People wouldn’t like it. We prioritize the end-user over the advertiser… We’re not going to sell it.”
* Google is 52 percent international revenue; Schmidt thinks it will go to 65-35.
* About getting too big: “How do we behave? Not the way Microsoft did. I would never do that.
* “I never worry about Microsoft.”

Google’s hubris may have finally gotten the better of them. See this from the official Google blog about the launch of Knol, the Wikipedia-About.com-Associated-Content it just officially launched:

The web contains vast amounts of information, but not everything worth knowing is on the web. An enormous amount of information resides in people’s heads: millions of people know useful things and billions more could benefit from that knowledge. Knol will encourage these people to contribute their knowledge online and make it accessible to everyone.

So Google is now going to fill in the gaps in human knowledge? That is its first hubristic leap. The next: that we need Google to create a means for sharing knowledge. That is what the internet itself does. Every page, every blog, post, every media article is precisely that.

So now Google is competing not just with media but with the entire internet and everyone who publishes on it.

This is terribly dangerous for Google. Obviously, since I’m writing a book called What Would Google Do?, I admire them and their self-awareness about their role on the internet. But this displays a clueless arrogance that is shocking from them. Have they been arrogant? Yes. But clueless? No.

But now Google is in direct conflict with everyone it wants to serve via search and advertising. Google is making itself the enemy.

Danny Sanchez quotes Eric Schmidt saying what Google has always said — and what I have repeated — when media companies fear it:

“It’s better to think of Google as a technology company. Google is run by three computer scientists, and Google is an innovator in technology in our space. We’re in the advertising business – 99% of our revenue is advertising-related. But that doesn’t make us a media company. We don’t do our own content. We get you to someone else’s content faster.

You might ask how this is different from Google providing platforms such as Blogger and Blogspot. I suspect that’s the way Google is thinking of it. But now Google is creating its own media brand.
Second, it is making a claim of authority. Says the official blog:

Knols are authoritative articles about specific topics, written by people who know about those subjects. . . .

Google is also confirming the most common complaint about the internet: that it’s filled with crap. By this act, Google is agreeing, for it says we need Google to come along and create find the people who can create uncrap. That is precisely a media argument: that openness does not produce quality or credibility.

Google: stop before it’s too late. Competing with those you serve — from a position of unbeatable advantage — isn’t just bad business. It’s evil.

: It’s not as if Google wasn’t warned. Here were Danny Sullivan and Duncan Riley fearing that Google had gone a step too far when word of Knol got out in December.

: Note: I accidentally posted this before I had finished it. Some may have gotten the incomplete version in RSS before I made some corrections. Sorry.

: MORE: Valleywag gasps at Marissa Mayer acknowledging that GoogleNews makes money for Google even though it doesn’t have ads. At Fortune’s Brainstorm conference, she said, according to Fortune:

The online giant figures that Google News funnels readers over to the main Google search engine, where they do searches that do produce ads. And that’s a nice business. Think of Google News as a $100 million search referral machine.

Valleywag clucks:

What neither Mayer nor Fortt explained: The real reason why Google doesn’t put ads on Google News. That’s because it fears lawsuits from the media organizations whose headlines and text it picks up and republishes. (It’s already lost a court case brought by a newspaper group in Belgium). By not running ads on Google News, Google lawyers could argue it’s not profiting from their work.

Mayer just shot a $100 million hole in that argument. When she puts a number on how much money Google News makes for her employer, she gives newspapers’ lawyers a big, fat, juicy reason to demand a cut of the business. Sure, the newspapers already make money from the traffic Google sends their way — but do you think, given a $100 million prize, they won’t try to double-dip?

In the link economy, it becomes incumbent upon the receiver of a link to monetize it and newspapers do get a lot of links from Google.

Is Google psychoanalyzing me?

I just noticed that all the AdSense ads on the page with this post were for anger management.

Well, I didn’t think I sounded angry. How did Google conclude that I was? Is it targeting ads just to words or now to moods?

Next time I do go on a rant, I expect them to advertise massages, spas, merlots, and drugs.

A bunch of anti-Obama blogs were apparently shut down on Google’s Blogspot as suspected spam. They say that Obama fans reported them as spam to get rid of them. I have no idea what the truth is. The fear online has been that false information could be spread. It’s another fear that speech can be silenced.

(I suppose I should make clear that I don’t think any official Obama campaign effort is remotely behind this if it’s true. The point, instead, is that rogues can cause trouble. This would seem to be a variation on Swiftboating but rather than try to get a message out, the goal would be to bat an opposing message down.)

Wonderful story in today’s Times on using Google data to show what we’re really interested in: more orgies than apple pie. The peg is an obscenity trial in Florida in which the defense attorney demonstrates through Google Trends data that there are more searches for group sex than for recipes. And so, if you truly want to see the community standards that define obscenity we’ll know when we see it, then don’t listen to our preaching but to our searching.

Marketers have always known this. Back when I was at People, we’d test covers of Diane Sawyer in a suit vs. Brooke Shields in a bathing suit and in person, people would say they’d buy the former but on their own, in the newsstand, they, of course, bought the latter. Behavior trumps opinion.

And now we have so many more ways to know what the market is really doing, what the people are really thinking: Google, Flickr, Amazon…. That is the key value of the internet and companies on it: collected knowledge.

And so yesterday, as the nation mourned George Carlin, it’s a wonderful thing to look at the uses of his seven dirty words on Twitter and in blogs, our views of him saying them on YouTube, and — as I’m sure we’ll see in a few days — our searches on Google and purchases on Amazon. There, FCC, is the best evidence of our community standards. Actions speak more truthfully than words.