What is the Google Free Economy?

Today I posted the third installment of my investigative news analysis series “What Does the ‘Google Free Economy’ Cost You?”, which is being crowdfunded through Byline: “Obituary for the Fourth Estate, Part 1“. The headline derives from a subhead in the first story, which I share here, below the fold.

During the editing, I nearly broke up Part 1 in two to make a third. The first of the pair recaps how the Google Free Economy illuminated a path for new media companies as the Fourth Estate lost its way. Part 2 will look at the rise of social media and how it has fundamentally shifted authority from a small number of editors and reporters to the audience of news consumers. The initial concepts build from my groundbreaking, but largely ignored, June 2009 analysis “Iran and the Internet Democracy“. 

The two-part analysis isn’t the real work to be done on this project. The stories along with the other below are the foundation upon which the real investigative reporting and analysis will build. But to get there, I must raise money to complete the project. Contributions are few, and blame belongs to me. I haven’t done enough promotion.

I always intend to repost versions of each story here, but later, giving contributors and other Byline readers exclusive access. I post now, since there is no contributor base yet, and I hope this analysis might reach people who might be interested in the series, as readers and/or funders. With that introduction, I present “Quick Introduction to the Google Free Economy“, which first appeared at Byline, on Aug. 25, 2015.


July 2003, I work on my first report for Jupiter Research, a co-authorshipship two months after joining the analyst firm. We examine the U.S. search market based on data complied by what was then comScore Media Metrix. For the previous four years, I reported for CNET News from Washington, D.C., where one of my responsibilities was covering Microsoft’s U.S. antitrust trial. Government lawyers characterized the company as Gatekeeper to the Internet, and my own reporting had raised questions about the software giant leveraging ties to Internet Explorer and Windows XP to drive search traffic through MSN. However, the data revealed another gatekeeper in the making. Google.

Surging in late 2001, when new IE and Windows versions shipped, MSN led U.S. search traffic, according to comScore. However, by the time of my report nearly two years later, Microsoft’s property had fallen to third place as Google ascended to the top rank—a position it wouldn’t relinquish—half a decade after formal founding. The most disruptive influence ever on information gathering and distribution was born.

Obituary for the Fourth Estate
Babies are so cute, aren’t they? Removing the G, little Google oogled and laughed, seeming so innocent compared to mighty Microsoft. But what do little cuties become as adults? Some live unassumingly. Others are considered saintly, for their giving to individuals or serving the public good. Then there are the murders and serial killers. Google is mixed saint and savage and more the latter when it comes to the value of created content or the negative influence on news gathering.

Google’s birth as the dominate search engine in the United States—and, later, in most countries with Internet access—marks the death of the traditional media. Forensic coroners autopsying the traditional news media typically identify free services like Craigslist as the murderer. Google is the killer, not free online classifieds. Murder weapon: Ad-supported, contextual search that shifts revenues from native advertising that newspapers and other traditional media manage to that which tech companies like AOL, Google, Microsoft, or Yahoo control. Biggest benefactor and influencer is Google, which holds a global monopoly on search, produces little content of its own, and demands one price for all that its algorithms crawl: Free.

This series starts with premise that the Fourth Estate is collateral damage of the Google Free Economy—that is giving away valuable content subsidized by online advertising to get high search ranking. Problem: There is too much content, and too much of it alike, for ads to financially support. Excessive ad space means lower page rates and greater competition for advertisers.

Media, whether established or new, is bound to the Google Free Economy, from which search dependence is inescapable. The company’s business model is insidious as beneficial and fundamentally undermines the quality of news reporting everywhere. Let’s italicize. Google is a leech that feeds off the intellectual property of legitimate content producers. The search giant profits from content creators’ good work,  while reducing its value in the process. To zero.

Stated differently, “You create it, we sell it, and you must give it away for free”. That’s the price news organizations and other content producers pay to participate in the inescapable Google economy, which rewards the pursuit of pageviews and tactics for improving search ranking. Among the consequences: Rampant rumormongering replaces factual news reporting. Tech industry coverage is a glaring example of rumor too often masquerading as news. It’s a bloodbath; accuracy is the murder victim and readers, listeners, and viewers are the wonted next of kin.

Alphabet Spells More of the Same?
Timing of this investigative exposé is appropriate. On Aug. 10, 2015, Google was reborn—resurrected, reincarnated. In its second life, the search and services operation becomes subsidiary to new company Alphabet. Can Google be born again—and to what end? That’s a question this series seeks to answer as it unravels the complexities of the Google Free Economy and examines what comes next.

But the new baby isn’t as cute or as lovable; there is something metaphorically incestuous about giving birth to one’s self. Meanwhile, Google’s enormous brand influence and search market dominance must overshadow young Alphabet’s first steps and its growth.

This series’ reporting also will examine whether Alphabet’s creation will disperse Google’s antitrust troubles in Europe and defuse any potential new investigations in the United States. Depending on where Alphabet places products like Android, continuing within Google or as separate subsidiary, the new company could be considered a self-divesture—essentially a break up that reduces or eliminates alleged anticompetitive advantage leveraged from search.

To understand the nuances of the Google Free Economy, its changing role as subsidiary, and what Alphabet could become, the series also will explore some of the philosophical principles behind the first life and the second. For example, Google professes to liberate and democratize information, but to whose benefit?

Google is, by many measures, what trustbusters sought to keep Microsoft from becoming: Gatekeeper to the Internet. The benefits from Google search and related services are voluminous, but so are concerns about users’ privacy and whether in the long term the devaluation of content serves the public interest as Google executives suggest—or not.

This series as conceived is layers deep, which will be better explained as it unfolds. I am concerned that even this introduction reveals too much information to Alphabet/Google public relations handlers seeking to proactively do damage control. They shouldn’t have to. If search is all about revealing what is, and if “transparency” is one of the goals for creating Alphabet as CEO Larry Page claims, then illuminating truth should align with the company’s objectives. Yes?

The tone of this introduction, which seeks to pique your interest in the series, is not necessarily what you can expect from any or even all the stories.  Each news analysis begins with a hypothesis before the reporting starts. I follow the reporting, not my preconceptions, and often that leads somewhere unexpected.

There’s an appropriateness to crowdfunding this series through Byline: Breaking away from the Google Free Economy while reporting about it. The information giant doesn’t set the value of the news analyses by way of page rank or pageviews and related advertising. You do, by your willingness to fund the reporting or to instead read for free. My responsibility is to deliver something worth your time and contribution. My accountability is to you, and to no one else.

Photo Credit: Elena Covalciuc Vieriu