Link: July 27, 2007, Hour Two: Depression Medication / Baby Talk / Search Engines
On NPR's Science Friday show last week, Javed Mostafa and Andrew Keen discussed Search Engines.
(It was an interesting conversation, not the least for Keen's complete lack of relevance: he seems to have adopted the politician's tactic of ignoring to answer a question but then later interrupting the other speaker's current topic with an irrelevant return to a former question.)
Javed Mostafa, of the University of Indiana was generally excellent throughout, but but but there is one thing he said in passing several times which begs for strident correction, when he described those who use Google search and application as its "customers." Wrong!
We are NOT Google's Customers.
We are Google's Suppliers.
He has the entire business model of Google completely backwards. Those who use Google's search engine, mail, calendar, and other applications are NOT customers. A customer is someone who pays you, from whom you make money.
WE are not Google's customers:
Advertisers are Google's customers.
Google is in business to serve its customers: the advertising companies that pay it, who measure their investment in it by the return they get from the placement of the ads, just like on other media such as radio and television. (This is one of the reasons why Google's attempted acquisition of Doubleclick is being questioned.)
We supply the raw material with our labor.
Google turns that raw material into something the customers will pay for.
Google is not in the search engine business, not the webtop business, not the application business. Google is in the data collection, research, advertising delivery business. Its business model is more akin to Neilson or Arbitron and the many companies that connect media to advertisers than it is to Microsoft.
The corollary of this is:
Google is NOT free.
We pay for Google by barter.
Google is not free. We barter our personal information for its use. Google collects and indexes everything we put online in it -- every search, every calendar, every email, every document, every widget choice, every map location, every thing.
It repackages it, bundles it, extracts it, correlates it, and sells it to its customers, the advertisers.
It doesn't pay us any money for this, but instead allows us to use the tools that collect this information.
Meat packers supply McDonalds with beef. McDonalds pays them for it. It then converts that meat into a form that its customers will pay for.
We supply Google with data. Google allows us to use the applications which are at the same time data collection devices. It them converts that data about us into a form that its customers will pay for.
Like other businesses, McDonalds values its relationships with its suppliers. But neither side is under the illusion about the relationship: the suppliers know they are the suppliers.
That the suppliers of Google -- and public commentators on it -- are under the illusion they are customers is rather startling.
And that Google -- who are under no illusions at all as to the nature of their business and their business relationships -- does not do anything to dispel this illusion is surely a sign that something is rotten in Privacyville.
Google doesn't have an issue with its customers. The advertisers are happy. That's why Google is making so much money.
Google does have an issue with its suppliers: who have been living in the illusion they are customers and now they are starting to figure out they are not !