Google is as Google does

Google is as Google does

Summary: I'm not a smart man, Violet. But I do know what revenue is.

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TOPICS: Google
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Forrest-Gump

Our Violet is clearly angry. Very angry.

While I empathize with Violet over her experiences with Google+ and how the social network has been managed, I also wish to point out that Google co-founder Sergey Brin admitting to the audience of the Re/Code conference, which is made up of the richest and most powerful people in the technology industry, that his personal involvement in Google+ "was probably a mistake for me to be doing anything tangential to social to begin with" is not at all uncharacteristic of the way Google has been conducting itself since, well, forever.

I don't wish to be in the position of having to defend Google for its business practices, as I work for one of its competitors and I don't agree with many of the things that they do.

I encourage people to look for alternatives to Google products and services for any number of reasons. 

But in this situation the only thing I can offer Violet is, paraphrasing the immortal words of Forrest Gump,

"Google is as Google does."

If you are going to use Google's services, then you also by definition have to accept that you are going to reside within that ecosystem and Google has the right to manage it and manipulate it as they see fit, in order to maximize revenue.

To understand why Google is as Google does, you have to understand their revenue model, particularly as it compares to their industry competitors. 

goog-revenue-h2-2013-620x452

This graphic comes from my colleague Ed Bott's excellent piece from back in February of 2014: Apple, Google, Microsoft: Where does the money come from? 

I suggest you read Ed's article because it makes the motivations of all three of these companies crystal clear.

Apple makes its money overwhelmingly from consumer electronics.

Microsoft makes its money, currently, overwhelmingly from the business and consumer licensing of software and services.

Google as a company defines its culture of innovation as throwing stuff up against the wall until it finds something that sticks. Or, to put it in another way, something that brings in more advertising than it costs to run.

Google? As you can see above, pretty much from advertising revenue generated on Google's website properties and with AdWords text ads placed elsewhere, including in mobile apps for Android.

That little tiny chunk that says Motorola Mobility? That was recently sold to Lenovo, so if we were to redraw that chart, the percentages under "Google Websites" and "Google Network Members Websites" increase a bit.

In short, after the Lenovo transaction is complete, over 90 percent of Google's revenue will come from advertising.

Revenue generation through advertising in the age of the Internet is a complex science. Google and Facebook have both had to become masters of this in order to maximize their revenue because virtually all of their income comes from advertising.

Microsoft, Yahoo and Amazon, to a lesser extent, also have to do this for those properties that are reliant on advertisting revenue. But not at the scale of Google or Facebook.

When a property or a service isn't performing the way they want, they have to tweak the recipe. That means affecting the user base generating the content which, in turn, affects the way the advertisements are generated and targeted.

So stuff like our privacy that Violet is upset about? A distant second to keeping the revenue generation machine well-oiled. 

Sergey Brin revealing they might have to throw the baby out with the bathwater because it isn't working out and Vic Gundotra going to greener pastures is typical Google.

They have always done things this way, and there is no indication they will do things any differently, based on how the company makes its money. 

Violet writes "With Google+, it became clear that we were all little more than webs of flesh spun over packages of saleable data."

Really? I was pretty convinced of that the second I signed up for a Gmail account ten years ago. But I understood the tradeoffs.

It's their nature.

How many Google properties have been deep-sixed because they were lousy performers? I don't know. Let me Google that for you.

At any point in the lifetimes of these products that no longer exist, you had angry users. They got stung. Google Wave begot Google+, and I suspect something else will replace it.

Google as a company defines its culture of innovation as throwing stuff up against the wall until it finds something that sticks. Or, to put it in another way, something that brings in more advertising than it costs to run.

The end-users of those services, both those that survive and those that are abandoned, become part of Google's living science experiments.

It isn't the model I would choose if I were Google and Sergey Brin, but hey, I'm not a billlionaire; it's a model that is working well for them financially. 

So to Violet I say, you have a choice. Don't get in one of those driverless Google cars unless you are prepared to go where it takes you.

Do you empathize with Violet? Or are you along with with Google for the ride? Talk Back and Let Me Know.

Topic: Google

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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113 comments
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  • Interesting take........

    "I don't wish to be in the position of having to defend Google for its business practices, as I work for one of its competitors"

    "I encourage people to look for alternatives to Google products and services"

    Indeed!

    One of the beautiful things in today's market, is indeed choice. If you don't like Google (or Apple, or Microsoft etc.), just don't use their products.

    If you use them, be aware of their T&Cs! They are all businesses.

    I don't like Facebook (personally). I don't feel plastering my life over their servers is beneficial to myself. Possibly much more intrusive that knowing I did a search for 4TB Hard drive last week.

    Simple solution - no Facebook account.
    Boothy_p
    • what Google also does

      Is pay no tax in Australia
      what a rort - just read today's Sydney Morning Herald
      Do no evil my ass
      hubivedder
      • "is pay no tax in Australia"

        Maybe you should ask your 'non evil' politicians why their tax laws allow corporations (not just Google) to evade tax.

        But hey, lets not bother, let's blame Google.
        Heenan73
        • Great response Heenan73!

          You are right on the money. So many people accuse "evil" corporations for evading taxes, when most of them are actually following the law. Just like all the controversy over Mitt Romney only paying 15%. He didn't have any wage-based income, only capital gains, and under our federal (US) tax law, capital gains are only taxed at 15%. This here is a similar situation. Google has found a way to get away without paying taxes without breaking the law. The Australian government now has to decide if they want to fix the loophole. However, that loophole may have other consequences that are detrimental to the economy there.
          ctleng76
          • Gtreat Rsponse

            Wow you are putting Mitt Romney is the same classification as a human being! that is reactionary. With n ego of his size if you turned him inot soetning as useful as dog food the dogs would choke. Try sticking to supporting Google you will be on far safer ground.
            bobmattfran
          • Rage much?

            Your disproportionate hatred says something about you, considering the current occupant of the White House personifies ego gone amok. At least Romney actually helped businesses improve, which led to the well being and employment of their employees (Staples, for example).
            edyang21
          • Totally missed the point

            A typical liberal knee-jerk reaction.

            Replace "Mitt Romney" with that rich guy whose name you don't know ... "Alan Indigo (I made it up) was taxed 15% because it was capital gains, and he's a Democrat." Is that better?
            davidr69
          • The rich pay little or no tax because they rigged the system

            by buying off politicos to write laws in their favor. Did you really think they earned their treasure by the "hard work" of counting money.
            Telexer
          • who writes tax law

            Saying that corporations are just doing what tax law allows and therefore not their fault is disingenuous. Who writes tax law? the american public,ha! The law makers, no. The lobbyists for the big corporations, yes. Some written word for word as what the politicians were handed.
            bwoodley
          • the evil corporations ARE evil...

            Yes they evade taxes following the law after spending millions on people that will write the perfect laws with ONLY THEM in mind. You can call it democracy until it the corporation with the most money drowns the voice of avg. American.... I Think that's NOW. Loopholes are garbage, hearing global corporation leaders renounce US citizenship to evade taxes garbage... When a US executive goes global he or she quickly escalates to narcissist. They want lower pay, higher profits and without checks and balances will not do the right thing.... period
            mitch2014
      • Not relevant to the current issue

        And unless you're an Australian citizen, or you work for a competitor and think Google is getting preferential tax treatment, none of your business.

        Either way, it's off topic.
        John L. Ries
  • Not just into Google anymore

    It began innocent enough way back when Google was just a free search engine, when the best of the best left you wanting to know if there was ever going to be a great search engine. Then little by little, Google began to give me the creeps so much so I am seeing ads today that must have been generated by predictive analytics. Just now as I logged in to ZDNet to enter this post, ads Google Office is at the top of the page, and several others based on my recent browsing history. Now I find myself refusing to use Chrome, only allow spam on my gmail account, and never click on any ad-choice ads. The goal is to some how become invisible to the big brother man-in-the-middle we know as Google.
    Reddawgz
    • I feel your creeped-outedness

      Which is why, in addition to the things you mentioned, I still use a BlackBerry. Having an Android is like carrying a little Google beacon with you everywhere you go.
      RJMWebs
      • You could just use a pay phone...

        You could just use a pay phone, though the possibility of getting a virus will be higher.

        Google is not the government... well I think it is not. Do you think that they will be taking you away to room 101 for friendly talk? Don't worry about imagined things. Paranoia may set it.

        Excuse me, there is a knock on the door.....
        mytake4this
        • Actually, Yes

          If you are worried about what the NSA is doing, remember that Google feeds them a lot of information. The problem isn't Google. It is the people who, if you ask what Google does will start spouting about their services sucg as Google+, Google Docs, Search, etc. What they really are (that is, what they make their money from) is defined by the cahart. I just consider them a fancy advertising enterprise. My objections is not with Google but with the people who use Google services without reading their Terms of Service, FAQs, Privacy Policy and help. They like the service so much that they don't read what is and has been already out there and then they become shocked. Consider the law suits going on against Google because Google reads each and every GMAIL that people send. Contrary to your use of the term "imagined". I think you are way off base on that one. We are talking about real things. Google admits that they doo all of this stuff. It is plain for people to read on their website. YES, the DO read your email. It is NOT imagined and they admit doing it (publicly). This isn't a binch of people making imaginary guesses. They actually admit doing this.
          hforman@...
          • Sorry

            Sorry for the weird typos.
            hforman@...
          • Those blaming Google were...

            ... pretty silent when Microsoft terrorized IT world. That's why i'm not sure about pure motives of this anti-Google bandwagon.

            I prefer Linux with PC and hope there will be another choice for Android Linux in mobiles. It must be another Linux based platform.
            MacBroderick
          • So what you're saying MacBroderick, is that

            since Google runs their systems on OSS, everyone should be happy to let them terrorize the IT world and those using their stuff because of that.

            Got it.
            William.Farrel
          • Better solution - buy the stock

            That way you get to continue to use all their great services and you make money on the back end when they beat revenue expectations.

            Speaking of imaginations @hforman - how about offering up a link to where Google is publicly saying that they read your mail? Didn't think so. You have quite the imagined self-importance.

            Some people think that useful ads are creepy, others think they're... well.. useful. To each their own. Google is making tons of money because they continue to innovate, continue to make great decisions (at least the big ones), and continue to provide really useful information (through search results, ads, apps, you name it). Its not magic.

            The whole premise of story is bonked - no idea how "Sergey isn't a social person" = "Google says Google+ was a mistake". Good to see that ZDNet is still filled with crazy out of touch zealots though.
            gordongecko407
        • I haven't seen a payphone for years

          so that may not be an option any more.
          grayknight