America, trust in monopolies, and SERPs
America, trust in monopolies, and SERPs
What happens when your favorite monopoly turns it back on you?
Hi! Can here. As Ranjan pointed out, Substack now supports group accounts. Yet, I find this intro thing too charming to give up. Anyway, welcome to Margins. We talk about technology, business and life here. Make sure you sign up! If you are already a reader, let’s move on…
There are good things about America, having come here from Turkey. Aside from the, uh, Trump thing, there’s a shared sense of stability. Things generally work in a way that’s hard to get used to; you can buy an expensive piece of electronics, use it, and then return it because you have the right to. The drivers stop not just at stop signs (which itself is hard to get used to), but also at crossroads. The system works. Life is predictable. It’s soothing in its mind-numbingness. You. Simply. Don’t. Think.
The way, however, the system works is by removing trust from the equation. There’s, of course, the more pervasive rule of law compared to Turkey, but also a more profound understanding that trust is bad. You internalize that it’s not that people are out there to get you, but that no one is or will be there for you either. Not distrust, but simply the lack of it. Individualism is the primary way this manifests itself. Each man to himself. Pull yourself up by your bootstraps. It is good and it is bad. I have been immersed in American culture for more than 20 years and still am deliberating on this.
If individualism is how this comes across on a personal level, the brutal belief in a market based capitalist economy is how it exhibits in the business world. In this context, I am more convinced that the lack of trust is actually a good thing. You do not, for example, trust a company to do the right thing. There’s something (just something?) sociopathic about assuming the worst of people around you, but when it comes to companies, it feels more warranted. I mean, of course, companies operate through humans and everything, so you shouldn’t go around hating on every employee of every company, yet, the principle sounds right. If nothing else, companies score a tad lower on the trust index compared to people. Humans are better than companies. This doesn’t seem that controversial.
Is Tech Good?
Haha, OK, but what about tech companies? Like any other person who writes about tech, the slow but steady erosion of the unearned trust in tech companies is now a sad husk of a horse that I’ve beaten to death. We used to trust, or I’m sorry, love tech companies. The fall from grace of technology where kids will actively refuse to work for tech companies or at least some of them is now a reality. The ever-so optimists will happily point to how tech still commands more goodwill than any other industry on Twitter, but they will casually omit where the trend is going [1]. In the centrist parlance, techlash is a correction. This new mood is real and it is here to stay.
While Facebook rightfully took the brunt of the techlash, Google seems to be doing a better job. I mean, yes, there was the Google walkout, the many, never-ending workplace issues, Dragonfly, and treatment of its contract workforce, and the dumpster fire that is YouTube that seems to rekindle itself every few years, but still. Google is...still good?
The reason it’s hard to say Google is bad is that it’s hard to untangle Google the company from Google the product, and more specifically, its search engine. Google is the search engine, search is Google, and Google is search. There’s more to Google than search, but there’s not much more to search than Google. You don’t even search, you just Google. I googled multiple times writing this piece already.
Enter, Google
I am also old enough to remember when I first heard of it. Back when I liked to use Lycos [2], mostly because I liked its color scheme and my brother HotBot because he thought it was the cool one techies used, my aunt emailed us [3] one day about this Google thing, and I never looked back. Google search was just better in a way that defied explanation. The whole quirkiness undoubtedly helped, especially given how young and impressionable I was, and we all were. However, Google could have called you names at the top of every page, and you’d still use it over the competition.
I talked about Google and it’s business model before, but one of Google’s key insights was that paid inclusion was bad. This sounds stupid now, but the smart folks are Mountain View (probably Palo Alto back then) quickly realized that relevant search results would attract more people than a list of items that you could buy your way to the top. PageRank was magic in its simplicity. It was computer science at its best.
The second stroke of genius was how the company made money. Instead of selling you a reserved spot in the search result, it’d show you ads, which were sold at an automated auction to extract the full willingness to pay from an advertiser, that were clearly marked as such at the top. The ads would be so relevant to what you searched for that you’d end up clicking them organically.
In a country where there’s no trust, Google did the impossible. It taught us to trust its search results because they were so good and relevant. And the fruits of that trust kept coming; we got email that was so spacious that it must have been a joke. We got free maps that were so absurdly better than anything before and still is. It all seemed to work really well, mind you, but the connective tissue that holds it all together was always the Search Engine Results Page. The search results, those ten blue links were always so right on the money, so damn relevant, just precisely what you wanted. You learned to trust Google.
Should we have? I mean, probably not. As “don’t be evil” Google is, or was, the company’s ever so slow blending of the ads into the search results page is well documented. The big shift seems to have happened in 2013, and there was a reasonable complaint at the time, but the results were still So Damn Good that we kept on googlin’. It was also around the time mobile really started taking off, which probably diverted our collective attention.
The big major change in 2013
Things, however, have come to a halt seemingly recently. Google rolled a significant change to the results page where among many other changes, they blended (their term!) the search results with the ads in such a harmonious way that they became much harder to discern. You could tell, if you looked for it, the small Ad note next to the ads, but out went the colors, URLs, and any other visual hints that made the ads stand out. There were a decent amount of complaints about the looks of the page, which every product manager in tech learn is a typical response to change. But the real, actionable, visceral was about the ads. In one swoop, it seemed like out went the objectivity and trust. Paid inclusion is back baby, Google said. Our collective trust was violated.
I mean, OK, I am being a bit dramatic here. But it did feel that way!
Can you pick the ad?
Can Google be Good?
The hard thing about calling Google out on its monopoly was that whatever Google did it to entrench, it always seemed to benefit the customer, at least in the short run. This feels odd to type as I think monopolies are bad fundamentally, but having a single search engine that gave me the right results right on the result page seemed like an improvement over having to navigate to another page, for example. Scraping is terrible for the scrapee, but not for me! The ideal UI for searching the flights is one that just buys me the right ticket when I put in my destination, and Google came pretty close to that, which seemed like an improvement over having to deal with airline websites, for example. I didn’t want to click on a link to figure out how much Justin Bieber is worth, or how tall Barack Obama is.
Once the backlash over the new search results page came, Google somewhat uncharacteristically rolled them back, with the usual apologies They, once again, seemed to have done the do-no-evil thing. On the one hand, it was refreshing to see a major corporation react to feedback, but on the other, it was a stark reminder of how we are beholden to a single company changing its stylesheet for the health of one of the ways we as a society discover and ingest information. What stands between the biggest, the most widely available repository of information and the people is a single CSS file, controlled by a single company.
It’s hard to know the calculus that went into the rollback decision at this point. The ad-blended, commercially-harmonious design still prevails on mobile, where the real growth in revenue will come from for years to come. [4]
Americans have one thing right. You should not trust companies, but you should trust the system to keep the companies in check. The system operates in many ways. Sometimes it’s the media, with either in-depth investigative pieces or consistent reporting on the misdeeds. Rules and regulations imposed by the lawmakers are another way. But similar to how the forces of the universe aren’t equal in power, one of the tools of the system stands out in its effectiveness.
That one power is competition. Someone taking your spot is an extreme case, and a drop in market share is scary too, but the shrinking profit margins (Margins!) is how the competition really strikes fear into the management. It is without competition where a corporation can not just extract as much as profits as it wants, but it can simply ignore the criticism.
Margins Rule Everything Around Me
Software industry lends itself well to monopolies due to economies of scale. Part of the scale effect comes from how fixed costs dominate the cost structure; you need a lot of servers to start a search engine but every new user adds a tiny overhead. It’s not easy for an outsider to come in. But also, especially as machine learning system takes a larger part in search results, every user is makes the system even better; you can use learnings from what people search to come up with better results. With such a free reign over the market, it’s only natural for criticism of Google to fall on deaf ears. What are you going to do, not use Google?
This is not to say companies like Google aren’t beholden to changing consumer habits or shifting the technological landscape shifting under them, as it happened with more searches shifting to apps over browsers on mobile. Nonetheless, the fact things might get better doesn’t mean we can ignore the damages that lack of competition imparts not just on prices, but also on stifling the innovation and creating single points of failure. Competition, as we are fast learning, is not just about keeping the prices down, but ensuring the power is distributed. The system doesn’t trust anyone, as it shouldn’t. Absolute power corrupts even the most no-do-evil companies.
As for trusting humans…Americans should do more of that. Humans, after all, are a bit better than humans.
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[1] They are good at being optimists, but they aren’t good at being objective.
[2] Lycos, for a long time, was owned by Carnegie Mellon, and they prominently featured the name in every page’s footer. It always stuck with me, and I am confident that association was one of the reasons I ended up going there for undergrad.
[3] The reason I remember the first day I used Google is more because of this email. Back in the early 2000s, very few people in Turkey were online. My aunt, who was then working in the foreign desk of the Turkish treasury department was one of few people who I exchanged emails with.
[4] I’ve long noticed that on mobile, sometimes I have to scroll down multiple screens to see any results. It has bothered me, but less than I thought it would. I think it’s because I simply use my phone less to search for things on Google, versus merely going to an app to do something. This entire footnote is another essay in itself, though.