When Will People Stop Exploiting Google?

from the time-to-pay-up dept

Thu, Apr 28th 2011 9:22am — Mike Masnick

I assume you've been hearing all about how sites like the Huffington Post are exploiting workers like a slave master by having them work for free. It's all, as Nick Carr has noted, digital sharecropping, as "free" is really all about exploiting others. And, of course, what it comes down to -- as Billy Bragg pointed out a few years ago -- is about who profits from all of that "free" stuff. According to Jonathan Tasini, that's "unjust enrichment."

Since we've established all of that, I have to ask the big question that really represents the elephant in the internet room: When will people stop exploiting Google?
You see, I recently read on Kevin Kelly's site about how Google provides about $500 worth of value to the average searcher. And we got it all for free. But, but, but... you say: we're paying for that in the advertising we see. Oh, how naive. Why, that's just like saying that Tasini got paid in exposure (how do you measure that?!?) or that Bragg got paid in getting a free platform to promote his music. Others will point out that Google made the choice to offer its service for free -- but, again, that applies to the people screaming about being "exploited" by Arianna Huffington as well. Then, of course, some will say that those situations are different because they involved companies cashing out. Yet, according to the Kevin Kelly piece, there's approximately $65 billion in consumer surplus from Google that the company is not capturing. $65 Billion. How can the company possibly go on knowing that the public has made so much money off of its hard work?

So, all of you using Google without paying your $500 directly to Google, when will you stop exploiting that poor company?

Okay, got that out of the system. A bit more seriously, you really should read the Kevin Kelly article which combines a few different studies to determine how much Google is worth to users. The really key point in all of this is the pure economic growth created by this. It's not in Google's bottom line (though, that's part of it), but in the massive consumer surplus created by tools like Google that allow people to do things they simply couldn't do before and do other things much more efficiently. If you understand how economic growth works, this is a perfect example. What are sometimes called "spillover effects" or "consumer surplus" is really economic growth in action. It's when the sum is greater than the parts, and that value can be more widely distributed. This is a good thing, and it would be nice if people stopped getting confused by "free" and thinking that it means an economic disaster, rather than an economic multiplier, as it often is...

In terms of the specifics, this also really does a nice job of demonstrating the difference between price and value. The technical "price" of using Google is free, but we value it a lot more than that. Google offering up search for free doesn't "devalue" search, as some suggest. It does the opposite. It creates more value. Kelly asks what would happen if Google decided to try to "capture" that excess value by charging. I'm sure a ton of people would pay. But, really, the question is would that be sustainable? The second Google did something like that, you could bet that Microsoft would suddenly jump to being the number one search engine, and it would open up all sorts of opportunities for new upstarts trying to enter the market. And, really, that's the key point we keep making. Certain things can't really succeed at a long-term price over zero, because the competition will just eat them alive. But, a la Google, it doesn't mean there isn't a ton of money to be made. You just have to figure out what to charge for. There's no exploitation going on here. Just economics.

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Filed Under: business models, economic growth, exploitation, free

40 Comments

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The eejit (profile), 28 Apr 2011 @ 8:41am

Cue crazy oonlogic as to why Google is evil and must be punished in 5, 4, 3...
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Michael, 28 Apr 2011 @ 9:28am

Thanks Mike...
I had a $500 check all written out by the time I got to the line in the middle of the article.

Then I come to find out that I did not need to write one at all. Thanks. I'm sending you a bill for a new check and some ink for my pen - and it's an expensive pen.
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Luke, 28 Apr 2011 @ 9:44am

Has search become a right?
Given that the ability to filter through the reams of information on the internet is absolutely central to our day to day lives, have we reached a point where search is simply too important to leave in the hands of private entities?
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Anonymous Coward, 28 Apr 2011 @ 9:46am

A service provides for consumer surplus??? Can't have that!!! The government needs to intervene, like they always do, and start granting monopoly privileges on everything to turn as much of that consumer surplus into producer surplus as possible.
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Michael, 28 Apr 2011 @ 9:48am

Re: Has search become a right?
With the alternative being government?

Aren't they the ones molesting Miss America, lying to us about not wanting to divulge information about international agreements, censoring the internet, searching our computers without cause?

I think we have handed enough of our "rights" over to them.
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Michael, 28 Apr 2011 @ 9:49am

Re:
The lube industry will be happy to support your suggestions.
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Simon, 28 Apr 2011 @ 9:49am

The bigger question...
..has Google personally asked permission for everyone they link to? I hear it's etiquette to do so.
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chuck, 28 Apr 2011 @ 10:07am

If Google did not offer its services up for free, then how on earth would they have the viewers they do?
And...then how could they track us all and give the information to the government?

I'm not much on conspiracies but...you think maybe the government has been making up at least part of that missed income?
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fogbugzd (profile), 28 Apr 2011 @ 10:07am

Modern business-think sees everything as a zero-sum game.
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Forge, 28 Apr 2011 @ 10:13am

Thing is, if Google said 500$ a piece or we dump you, I'd find a way to get them that check. They're worth it.

Likewise, I've seriously considered Microsoft's Action Packs and MSDN subscriptions. The products I use would make it a deal.

Course, Google doesn't ask for my cash, and MS no longer merits it, IMO, so I'm good.
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vastrightwing, 28 Apr 2011 @ 10:14am

Free parking is stealing
I once read some guy make a comment that parking spaces were too valuable to give away. Your premise is pretty much the same idea. The so called free parking is very valuable, but once parking costs money, it changes the dynamic considerably. It means fewer patrons who are unwilling to pay will park and shop. Like you said, once Google started charging money, a TON of competitors would leap into that space and then Google would no longer be number one. Some things just shouldn't be monetized in order to expand other opportunities. Broadcast TV is being killed off by trying to monetize carriage fees, as an example. Distributors are so intent on charging as much as they can for their content that they are forcing people to other forms of entertainment, very quickly. When they wake up and realize the mistake, it's too late. The damage has been done. You can't monetize everything without risking killing the golden goose.
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Anon, 28 Apr 2011 @ 10:18am

I like it.
Sometimes I have a hard time trying to explain to someone that price and value aren't the same thing... and that sometimes economics drives a price to zero, but that doesn't mean it has no value.

I like this example.
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Designerfx (profile), 28 Apr 2011 @ 10:25am

Re: The bigger question...
you mean the ones with the robot.txt files that give google instructions on how to link it's website?

I hear it's etiquette to do so.
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Common Sense, 28 Apr 2011 @ 10:27am

Charge the Author for my time
This is by far the dumbest article I have ever read. Google is making enough money off advertising, also as pointed out by the author Microsoft would provide a "free" alternative quicker than you could say Netscape!
PS Maybe Mozilla and Explorer should be charging us. I should charge the author for the time it took me to read this trash and write a response.
Do us all a favor and don't write any more articles.
CS
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mdpopescu (profile), 28 Apr 2011 @ 10:38am

Re: Charge the Author for my time
Sarcasm. Google it up.
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Anonymous Coward, 28 Apr 2011 @ 10:42am

Re: Charge the Author for my time
I think someone missed the point...
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Ron Rezendes (profile), 28 Apr 2011 @ 10:59am

Re: Has search become a right?
Not sure I want my search results filled with redactions...just saying.
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The eejit (profile), 28 Apr 2011 @ 11:01am

Re: Charge the Author for my time
I think your point is stuck in the random passersby that we get here.
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Designerfx (profile), 28 Apr 2011 @ 11:16am

Re: Has search become a right?
search wouldn't be where it is without private entities. A "neutral" search would also be a useless search.
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protatoe (profile), 28 Apr 2011 @ 11:24am

Everything runs on opportunity cost. You may have heard of the old adage "There's no such thing as a free lunch", it's the same theory at play here, "There's no such thing as free search.". Google isn't the most valuable company on the planet because of their search facilities, but because of the wealth of data they gather on end users and consumer habits.

Not arguing that searching isn't great, just saying if you were given the same option to give data on your habits, what you read, where you bank, when you're at work, at home, let them read your emails, etc, to an individual in exchange for them looking things up in a library for you, you would say no without hesitation. We give all this information to google who in turn uses it to make Billions of dollars.
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Anonymous Coward, 28 Apr 2011 @ 12:14pm

Re:
to give data on your habits, what you read, where you bank, when you're at work, at home, let them read your emails, etc

That seems like a bit of an exaggeration. Admittedly Google is able to collect quite a bit of data, but most of it is used in aggregate and is difficult to link to a specific person.

For instance, I don't think Google could tell when you are at work or at home. Also, while many people have G-mail accounts not everyone does.

I'm not accusing you specifically but people really put on the tinfoil hats when they start talking about Google, which is amusing because there are many entities in a much better position to have much more personal data. The post office for instance could probably learn and share a great deal more about people than almost internet search company.
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Anonymous Coward, 28 Apr 2011 @ 12:24pm

Re: Has search become a right?
How about this: we let google be the government, sure they spy on ya but the current govt does that already. Larry Page for president! And Sergei for vice president, Better them than Trump i say
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Ron Rezendes (profile), 28 Apr 2011 @ 12:40pm

Re: Free parking is stealing
but.... but.... FREE is WRONG!! /s
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protatoe (profile), 28 Apr 2011 @ 1:14pm

Re: Re:
If you login to your gmail account from home and work, they can easily identify the two computers and based on the timing extrapolate your schedule. Let's say you don't use gmail, but you go to the same blog several times a day and login to post comments, tracked. They even track the individual items you buy on an ecommerce site and what you paid for them. They track how many times an item was added to a cart and removed, then at what SRP it was finally actually purchased.

Now I'm not offended because I could easily fall into the 'tinfoil' hat crowd I suppose, which things to be what happens when you point out all the data google is actually gathering. I'm not saying that Google is evil or that you shouldn't use them, I'm just saying the service isn't free. Just because we personally can be ignorant to the true cost doesn't mean it cost nothing, or that we should feel indebted for that matter.

I use google, but it scares the shit out of me when I look in aggregate at the analytic page of a large e commerce company, my own web history (which proves they can link it back to an individual), the fact that the gmail user agreement says they will read your email, or the fact that street view collected my wifi information and tied all of this back to accurate lat/long coords, or the recent harassment scam that proved google links multiple gmail accounts to an individual for internal tracking purposes, that they can access all of your google voice and chat history, or the implications of all that when combined with GoogleTV or the fact they are in bed with the DoJ.

As I said, I'm ok with these things and continue to use google and have no plans to change, I make no suggestion that you should change your habits. I just think it's naive to think you give nothing away. We intrinsically trust the little white box, when really we shouldn't.

I think the full thing is on there, but there are a few very insightful portions.
http://www.youtube.com/watch?v=kFL5tLYyZ_U
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Anonymous Coward, 28 Apr 2011 @ 1:18pm

Re: Has search become a right?
This has to be the stupidest comment I have every read. Thank you for setting a new low in idiocy.
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Anonymous Coward, 28 Apr 2011 @ 1:20pm

Re: Re: The bigger question...
whoosh
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Atkray (profile), 28 Apr 2011 @ 2:29pm

Re: Re: Has search become a right?
Apparently you don't read much.

yeah it was pretty bad but we get worse than that from AC's all the time around here, just keep reading.
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Just Anonymous, 29 Apr 2011 @ 12:07am

...but I'm not using Google...at all...

Well okay, I'm using Youtube. But that's about it. And Youtube sadly has no viable alternatives. Pretty much everything else that Google provides does.

And besides, DuckDuckGo is, you know, just BETTER than Google's Search.
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sethra, 29 Apr 2011 @ 12:54am

Re: Re: Re:
I'll keep this brief has I'm on a phone responding... I wa leaning toward the free hand of market economics while I read the article, but I also agree with your post that they get SO Much more back in information on each of us, for giving away the toaster...
I copied your YouTube link and it was unavailable. did I copy it wrong or is it an old link?
I appreciate your well formed comment.
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Anonymous Coward, 29 Apr 2011 @ 1:05am

Re: Re:
The government should just ban consumer surplus altogether. Most of the laws it passes seem to be an effort to do that. Easier to just ban consumer surplus directly.
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lisa (profile), 29 Apr 2011 @ 2:14am

Re: Charge the Author for my time
.I totally agree with you! I read it a second time, and even a third time, and i cannot find one fraze in this post that i agree with...Men, talk about "tunnel-vision"... This author cannot be serious... Google exploits EVERYTHING, they keep your search info for years and years, they snoop in your gmail acounts (to "get a better view on what ADS to place in there")what the...?!? If i even open the mailbox of my neighbour (and only that, i'm not even talking about opening envelope's let alone READ IT) i am commiting a fellony (NOT A MIS-DEMEANER)BY LAW in my country...
They just read your whole content in your inbox, for the reason, and that's the most crazy thing of all, TO SPAM YOU WITH THEIR ADDS??? I heard if they see an individual puts a couple of links to many on blogs on one day, you'll be punished by banning you from their database's ... Unbelievable... And then I have to pay them maffia-boys for a place in their search-results...?

I am going to stop commenting on this now, because i do not want to step on anyone's toes, or place something hurtfull, but seriously dude, if i we're you, i would take a few weeks off, and get myself a good thorough check-up at the doctor's, because really, i think you completly lost your contact with reality.... In ten years or so,when they dictate EVERYTHING what we as individuals can and cannot do online, we'll talk again....
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lisa (profile), 29 Apr 2011 @ 2:34am

Re: Re: Charge the Author for my time
I made a quick search (yes, on Google engine) and stumble'd upon google's financial report for the first quarter of 2011 .... On their OWN site, by the way...

http://investor.google.com/earnings/2011/Q1_google_earnings.html

they made a revenue of 8. something BILLION, in 3 months!!
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Ben (profile), 29 Apr 2011 @ 2:57am

Google 'reads' your email?
Do you really think anybody at Google personally cares to read YOUR email? How arrogant!

Google's SYSTEM looks for patterns in the content of your emails as it displays them to you - they have to read your emails of disk to display them to you in the first place, so they might as well automatically see if there's any hints in there that you might be interested in a particular advert. Hardly a major invasion of privacy, and certainly one that isn't very costly anyway... and you never know when the right advert will turn up just when YOU need it.
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protatoe (profile), 29 Apr 2011 @ 9:28am

Re: Google 'reads' your email?
I'm not saying someone is reading my email as I have no way of knowing. I'm saying the Gmail terms of service says someone may read my email to offer more targeted ads.
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protatoe (profile), 29 Apr 2011 @ 9:30am

Re: Re: Re: Re:
Strange that the link won't work for you, I just clicked it and worked fine for me.

You can go to youtube and search for 'Inside The Mind of Google', that should pull up all the parts.
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protatoe (profile), 29 Apr 2011 @ 10:03am

Re: Google 'reads' your email?
I was going to cite the TOS, but it looks like it has been updated into a more general TOS since the launch of Google Voice. There is now a clause that says the scanning of emails is automated and no human will ever read your email, which is common. I can promise you this has not always been the case. The point I was trying to make still stands, you use the free email service and this gives value to google.

Really though Ben, your post is agreeing with what I have said and only attempts to engage in name calling based on your misconception of the point being conveyed.
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julian, 29 Apr 2011 @ 12:00pm

you must be joking...
Google is one of the richest companies in the world. Thats because of US the consumers who use their "free" service to buy thingsth that they Get paid for. You font become one of the most successful companies in history when your service is"free" Get your head out of your ass and off of googles payroll. nothing is ever free.
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julian, 29 Apr 2011 @ 12:00pm

you must be joking...
Google is one of the richest companies in the world. Thats because of US the consumers who use their "free" service to buy thingsth that they Get paid for. You font become one of the most successful companies in history when your service is"free" Get your head out of your ass and off of googles payroll. nothing is ever free.
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PoUglyTechie, 4 Aug 2011 @ 3:18pm

Why are all the comments on TechDirt by your gay buddies, Mike Masnick? This is not a forum in which the general public comments. All the comments are shopworn diatribes by your ugly, genetically defective techie buddies. A prerequisite for being a techie is being an ugly, pimply, disgusting, short and vicious nobody. That is a perfect description of you, Mike, and all your rotten buddies. When the internet is no more because the whole world is in a depression caused by the likes of you, where will you go to get your kicks then? Maybe you can get a job in a gay bar so you will see your jobless, homeless buddies every day.
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lrobbo (profile), 27 May 2012 @ 3:18pm

Google may be "free" but its transformed from a useful search engine into an annoying advertisement platform more than anything else . . .
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