Author: Tom Slee

Google: warlord in a world of bandits?

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How to think about Google?

On the one hand there is its widespread participation in open source projects, its statements in favour of openness, its consistent promotion of net neutrality, its recent announcement about "pulling out" of China, and its opposition to California's discriminatory Proposition 8. On the other hand, there is its embrace of secrecy around its core operations, its willingness to promote digital rights management for big media on Vevo, and its cavalier attitude to privacy.

Google is a company that frames its actions in ethical terms, and which takes a public stance on issues beyond its immediate commercial concerns, while making it clear that it's a business and it exists to make money. The language makes it easy to think about Google as "good" or "evil", and to search for some commonality among its actions along those lines. If it's good then we can trust it with our private information. If it's evil, then its apparently good actions must be a cloak to hide some more devious intent. [Before anyone accuses me of setting up a straw man here are a few quotes from a single story hosted, of course, on Google News. Many more available on request.:

  • "I do think that Google is a bit idealistic; they have a streak there," said Colin Maclay, managing director of the Berkman Center for Internet and Society at Harvard University.
  • "I do think a good part of this is they want to do the right thing," Silicon Valley analyst Rob Enderle of Enderle Group said of Google. "But none of these decisions are simple."
  • "Google believes that one of its asset values is righteousness," said Gartner vice president and analyst Whit Andrews. "It believes if it was not righteous, it would not make as much money as it does."]

Thinking in good-guys/bad-guys terms leads only to confusion. Despite the language, Google doesn't have ethics, it has interests. Sometimes those interests coincide with ours, and sometimes they don't.

Some time ago Nicholas Carr suggested that complementary goods are the key to understanding Google:

Complements are, to put it simply, any products or services that tend be consumed together. Think hot dogs and mustard, or houses and mortgages. For Google, literally everything that happens on the Internet is a complement to its main business. The more things that people and companies do online, the more ads they see and the more money Google makes. In addition, as Internet activity increases, Google collects more data on consumers’ needs and behavior and can tailor its ads more precisely, strengthening its competitive advantage and further increasing its income. As more and more products and services are delivered digitally over computer networks – entertainment, news, software programs, financial transactions – Google’s range of complements is expanding into ever more industry sectors.

Nearly everything the company does, including building big data centers, buying optical fiber, promoting free Wi-Fi access, fighting copyright restrictions, supporting open source software, and giving away Web services and data, is aimed at reducing the cost and expanding the scope of Internet use. To borrow a well-worn phrase, Google wants information to be free — and that is why Google strikes fear into so many different kinds of companies. There’s one more twist. Because the marginal cost of producing and distributing a new copy of a purely digital product is close to zero, Google not only has the desire to give away informational products; it has the economic leeway to actually do it. Those two facts — the vast breadth of Google’s complements, and the company’s ability to push the price of those complements toward zero — set the company apart from other firms.

The idea of complements captures much of Google's strategy, but it has a couple of limitations.

  • IBM uses free Linux to sell expensive hardware and services, just as Gillette famously used cheap razors to sell blades, but Google promotes the free nature of the Web to sell our eyeballs to advertisers, and that's not the same. Most of us are not Google's  customers, we are Google's product.
  • Many of Google's actions are more legal and political than economic.

Maybe I'm splitting hairs, but there is another way to think about Google, that comes from political science rather than economics. It explains why Google provides or secures the provision of some public goods on the Internet while limiting the provision of others; why it is genuinely interested in the long-term health of the Internet as a safe environment for users, and why we still shouldn't trust it with our data.

[Aside: I have a feeling that this post is at best a partial success. At the same time, the purely economic description in terms of complementary goods does not cover much of what Google does. I'd be interested to hear of other frameworks for thinking about Google. Or whether it matters.]

In his posthumously published Power and Prosperity, Mancur Olson tells a story of China in the 1920s, when the warlord Feng Yu-hsiang defeated "a notorious roving bandit called White Wolf". Most people in Feng's domain preferred life permanently under the thumb of a warlord to life prone to the periodic invasion of roving bandits, and Olson wondered why? His answer was that even a warlord who wants to extract as much tax from his citizens as possible must look to the future, and unlike a roving bandit that future depends on having a relatively productive population. There is an alignment of interests between the population and the warlord that does not exist between the population and the bandits: it is in the interest of the warlord to restrain his takings and so ensure that his victims have a motive to be productive. The warlord also has a motive to clamp down on crime (other than his own), and to provide public goods that benefit those he taxes. Olson describes this as a "second invisible hand", by which autocrats are guided "to use their power, at least to some degree, in accord with the social interest." In a similar way, in a neighbourhood under the control of organized crime there will be no robberies, only a protection racket.

In many ways the Internet is, of course, a place. There is even a word, netizen, to describe us in our role as citizens of the Internet. And if the Internet is going to be a reasonable place to spend our time someone has to provide those common goods that keep it so – security, community standards, and so on. Who will do so?

Google is a warlord of the Internet, surrounded by bandits. It provides public goods because its revenue (advertisements) depends on a safe and yet wide-open Internet. For Google to make money the Internet must be accessible from Google's search engine: enclosures are a threat to its business, whether they be ad-funded like Facebook or subscription-funded like the Wall Street Journal. Netizens must be comfortable and safe from bandits as they go about their daily electronic lives. Google also clamps down on attempts by companies other than itself to generate revenue from the Internet, for example by pushing the limits of copyright in its book-copying efforts, or by pushing open source software at the client side of applications.

While autocrats provide some public goods, there is a limit and in Google's case we see that limit in privacy and to some extent in copyright. When CEO Eric Schmidt says (30 second video) "if you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place", we have bumped up against that limit. And while we may be grateful to Google for keeping us free from the claims of copyright owners, attempts to restrict advertising on and around content will not find a friend in Google.

So yes, let's appreciate Google's stance on China despite what perceptive critics such as Evgeny Morozov say, but let's not kid ourselves that Google is anything other than an organization with some interests that overlap ours.

The Edge World Question: Meet the New Boys’ Club, Same as the Old Boys’ Club

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Every year an organization called Edge Foundation, which is not at all pretentious, publishes a World Question and asks "some of the most interesting minds in the world" to reflect on it. Edge is dedicated to promoting "the Third Culture", which it modestly describes this way: 

Throughout history, intellectual life has been marked by the fact that only a small number of people have done the serious thinking for everybody else. What we are witnessing is a passing of the torch from one group of thinkers, the traditional literary intellectuals, to a new group, the intellectuals of the emerging third culture.

That new group, in case you are wondering, would be the interesting minds invited by Edge.

Edge and its forerunner The Reality Club are single-minded in their search for these "interesting minds". It has "a simple criterion for choosing speakers. We look for people whose creative work has expanded our notion of who and what we are." Founder John Brockman describes it this way:

I see it as the constant shifting of metaphors, the advancement of ideas, the agreement on, and the invention of, reality. Intellectual life is The Reality Club.

So here is a simple non-intellectual question. Of the 160 or so "world-class scientists, artists, and creative thinkers" that Edge invited to answer its "World Question", how many do you think are women?

The answer is right after the break, and says everything that needs to be said about this self-described "intellectual" organization. Meet the new boys' club, same as the old boys' club.

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Digital Activism: If Information Is Not the Problem, Information is Not the Solution

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Right after I finished Matthew Hindman's book The Myth of Digital Democracy, Prospect Magazine has published a debate between Evgeny Morozov and Clay Shirky about digital activism in authoritarian countries, particularly Iran. (Links – Round one: Morozov and Shirky. Round two: Morozov and Shirky.) 

In brief, Morozov worries "what do we really gain if the ability to organise protests is matched (and, perhaps, even dwarfed) by the ability to provoke, identify and arrest the protesters?" Shirky, who is in moderate "Shirky mode" as opposed to demagogic "Clay mode", counters that "While the use of social media in the Iranian protests quickly garnered the label 'Twitter Revolution,' the real revolution was the use of mobile phones, which allowed the original protesters to broadcast their actions to other citizens and to the wider world with remarkable speed and immediacy. This characteristic, of a rapidly assembling and self-documenting public, is more than just a new slogan."

There is a technology arms race between the protesters and the government, in which increasingly sophisticated levels of censorship, censorship evasion, identity masking, and so on are all playing a part. Your Facebook account might be a great way to communicate with others of a shared viewpoint but others can track you on it, and Iranian airport security have apparently asked travellers to sign in to their accounts in front of them. Activists use proxy servers to protect their identity, but if they are discovered using this technology then it may be treated as  evidence of guilt. And so on.

The thing with an arms race is that, whoever wins (if anyone), the benefit is tiny compared to the effort expended by both sides. The hype over the role of digital technologies in protest is overblown because it is proportional to the amount and visibility of effort, not to the benefit the activists gain. In a country full of mobile phones, the mobile phone will be used to communicate; in a country with portable digital cameras, digital videos will be the way to broadcast events. But just because everyone is using the new technology doesn't mean it's making a big difference to the balance of power or to the action on the ground.

Digital technologies don't shift the balance of power partly because they are prone to the kind of arms races Morozov identifies, but also because they don't address the major obstacles that stand in the way of dissident groups, either in autocratic countries or in democracies. When Czechs organized to overthrow their government back in 1989 they faced many obstacles, but transmitting information was not one of the big ones. They had many ways to distribute what they needed: they leaked information to Western TV and radio stations who would broadcast it back to millions of listeners; they used official photocopiers to make hundreds of copies of samizdats, networks of music fans turned themselves into subversive communication webs, actors read anti-government news instead of reciting their lines at dramatic performances. "We were much more co-ordinated than people realize today, so that people in Czechoslovakia were able to know almost immediately what was happening in Poland and East Germany, even though it could not be reported or even mentioned in the official media".  [Doug Saunders, The Globe and Mail, October 29, 2009] If information is not the main problem for protest movements, then the Internet is not the solution.

To the extent that information is a problem, it's not the kind of information that the Internet deals in anyway. After all, here is some information for you:

2 + 2 = 5

I can post this in a blog, tweet it, put it in my Facebook status, or even make a video of it. It can be encoded in bytes, so it's "information" in that sense, but it's obviously not "information" that is useful to anyone. What activists need in autocratic countries is not "ways to share information" but "ways to share trusted information securely and privately". And the barrier to this is not "sharing" but establishing trust. When Russians re-typed samizdats and passed them on to those with similar views, the typing was a pain but the real issue was knowing who to trust.

The need for trust is part of why the transaction-cost analysis of group formation favoured by Clay Shirky and others is wrong-headed when it comes to activism, especially in a hazardous environment. As Hayagreeva Rao argues in Market Rebels (review), forming groups is largely a matter of establishing a shared identity, and establishing an identity is inherently a costly activity. High transaction costs are not an inhibitor to forming many kinds of groups because commitment is part of what makes groups successful. Signing up to join a group is a "performative" statement and, like apologies, its meaning is in the cost to the speaker. Sure, it's easier to sign up to a Facebook group than if you have to actually go and meet someone, but if signing up is so easy it's not likely to be much of a group, just as an automated phone apology that "all our agents are busy right now" is cheap, and so is not much of an apology. Some groups deliberately make joining difficult by imposing artificial initiation rites on new members. It's all part of establishing trust among group members, and the Internet doesn't do much to help – or hinder – that crucial step.

The Myth of Digital Democracy, by Matthew Hindman – reviewing the reviews

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The Myth of Digital Democracy, Matthew Hindman, Princeton University Press  2009

The last sentence of Matthew Hindman's The Myth of Digital Democracy is "It may be easier to speak in cyberspace, but it remains difficult to be heard". The book is about collecting and analyzing the following large data sets on the way to this conclusion:

  • The links among 3 million American political web pages together with data showing how Google leads its users to political sites. Hindman concludes that "link structure is an effective proxy for audience share" and that "communities of Web sites on different political topics are each dominated by a small set of highly successful sites". The scale of online concentration is so profound, he argues, that claims the Internet "democratizes" politics are misleading. For example, when it comes to blogs, "the top blogs are now the most widely read sources of political commentary in the United States", but these widely-read bloggers are very few in number (a few dozen) and they are "overwhelmingly.. well-educated white male professionals". The kind of voices that get heard in political discussion are the same kind that were heard through offline media, only perhaps more so. "The vigorous online debate that blogs provide may be, on balance, a good thing for US democracy. But as many continue to celebrate the democratic nature of blogs, it is important to acknowledge that many voices are left out."
  • Data from Hitwise of search-engine-directed traffic show that online politics is a tiny sliver of Internet traffic, and that "Scholars, public officials, and journalists have paid a great deal of attention to online politics. Citizens themselves, though, have directed their attention elsewhere." Not too surprising perhaps.
  • Data from Hitwise and other sources, of patterns of concentration in [American] online and traditional news media. He concludes that online media is much more concentrated (a few outlets get a larger share of the traffic) than many offline industries, particularly radio. The biggest story is what he calls "the missing middle":

    From the beginning, the Internet has been portrayed as a media Robin Hood – robbing audience from the big print and broadcast outlets and giving it to the little guys. But the data in this chapter suggest that audiences are moving in both directions. On the one hand, the news market in cyberspace seems even more concentrated on the top ten or twenty outlets than print media is. On the other, the tiniest outlets have indeed earned a substantial portion of the total eyeballs… It is the middle-class outlets that have seen relative decline in the online world. Moreover, it is overwhelmingly smaller, local media organizations that have lost out to national sources. [p100]

It is a refreshing change to read a book about the cultural and political impact of the Internet that actually looks closely at Internet traffic (what people read) rather than at the number of sites (what people write), and it's this perspective that leads Hindman to his myth-busting conclusions. The main flaw of the book is that it falls between two stools: it's clearly an academic work that started as a set of papers or a thesis, but it is looking for a wider, popular audience. To reach that audience, Hindman should have got rid of many technical details and written a book with more narrative, but if you don't mind reading technical studies, this is a good one, and I recommend it.

The Myth of Digital Democracy has been out for a year or so now, so after I finished it, I looked at some reviews, and got a surprise. The books detractors argue that no one claimed the Internet democratizes politics, and if they ever did then they don't any more, and if they still do then they mean something different.

So here are links to some critiques of Hindman's book, and some words in defence of The Myth of Digital Democracy:

  • Charlie Beckett of the LSE's think tank POLIS writes that the idea "that the Internet is innately democratic and that it will have revolutionary political consequences" is "a straw man". He goes on: "I always struggle in lectures or talks when I have to find quotes from these digital utopians. I can always cite lots of people (like me) who argue that the Internet has given us great tools and that it offers huge potential for civic engagement and public self-expression. I can even find examples, from Mysociety to Iran and Twitter that show concrete cases. But I don’t know many serious people talking about a revolution."

    This is a little cheeky from someone whose own book is called SuperMedia, and which is publicised as a "manifesto" for a "radical new relationship between the media and the public", and which apparently "explores the potential for an entirely new type of journalism… and makes the case that journalism could be the catalyst for change needed to solve many of the world's problems." All sounds pretty revolutionary to me. Beckett is getting hung up on the title, which was probably the publisher's idea anyway, and needs to read the book more closely.

    As for actually finding quotes about the Internet's innately democratic and revolutionary (or at least radically disruptive) nature, well there's always Google's description of its own PageRank search algorithm as "drawing on the uniquely democratic nature of the Internet" and its recent claims that in Iran, citizen video reporting via YouTube "appears to have become an essential part of their struggle". Or there's Lawrence Lessig in Remixed: "The neutral platform of the Internet democratized technical and commercial innovation. Power was thus radically shifted." Or Yochai Benkler at the very beginning of his influential The Wealth of Networks: "Enabled by technological change, we are beginning to see a series of economic, social, and cultural adaptations that make possible a radical transformation of how we make the information environment we occupy as autonomous individuals, citizens, and members of cultural and social groups. It seems passe today to speak of 'The Internet revolution.' In some academic circles, it is positively naive. But it should not be." And that's ignoring all the talk of Twitter Revolutions in Moldova and Iran, and Egypt's Facebook Revolution.

    Discussion of the Internet's impact on all aspects of our society is routinely cast in a revolutionary light, with a strong dose of "power to the people", and if such language is usually kept out of academic journals, that's no reason to ignore it.

  • For Mark Bahnisch of Inside Story, Hindman "narrows down the possible targets for his myth-busting to the claim that the internet will bring about 'democratisation.' But it's unclear who's actually making this claim, and Hindman ignores most of the more nuanced and specialised scholarship on the topic. If what he has to say when he gets down and dirty with the blogs later on is any indication, the real target is a nuch of journos and op-edders writing in the New York Times circa 2004." 

    Bahnisch is saying Hindman should ignore "journos and op-edders" with audiences of millions and focus instead on "nuanced and specialised" scholarship that general readers like me will never read. Rubbish. The real debate about the role of the Internet is a public one, and Hindman has done exactly the right thing to tackle this perception that's out there among the unwashed masses like myself. If the nuanced and specialized among us have good things to say, they should get out there in public and say them.

  • When it comes to the concept of democratization, Bahnisch and others people bring up "Michel Bauwens' concept of equipotentiality" as an alternative meaning interpretation of "democratization". Equipotentiality is a fancy word for speculations about how peer-to-peer networks function: no one said that democratization means a wider set of voices are heard, simply that anyone can potentially reach an audience of millions, and if only a few do, well good for them.

    The whole point Hindman's approach makes is that concepts, whether they coin new words or not, need to be grounded in reality. Is the loose world of blogs equipotential? Who knows, given the vagueness of the concept? But that potential is certainly not equirealized and that's a point worth making.

  • Allison Hayward writes that "to observe that 'digital democracy isn't always and everywhere the rule is not the same thing as saying that the Internet hasn't 'democratized' politics… For the Internet to be 'democratizing' we shouldn't require that it be revolutionary, only that at the margins it provide a broader population with more opportunities to contribute, volunteer, engage, and advocate, and make changes that are sustainable over time."

    Sigh. Hindman has demonstrated that many of these functions are not accessible to a broader population in any meaningful way. The book challenges those who believe the Internet is "democratizing" in whatever way to show there is some substance to these claims, and the rebuttals are wishful thinking based in, well, nothing much really.

  • Matt Bai argues that Hindman's data is old, and "the political impact of the Internet is spreading so quickly that it's almost impossible to capture and quantify": he disparages Hindmans's graphs and equations and prefers anecdotes about internet activists from modest backgrounds. 

    By the time I'd read this review I was feeling pretty sorry for Matthew Hindman, because it is clear that he just can't win. Bai has a belief in the power of the Internet that borders on the mystical ("spreading so quickly that it's almost impossible to capture and quantify"), so what would it take to persuade him otherwise? Nothing short of careful, detailed data I'm sure. But when someone does the work, well it takes time, and so it is dismissed as "old" and full of obscure graphs and equations. There is little point entering such an argument.

  • Along these lines Henry Farrell, in the Times Higher Education Supplement, suggests that Hindman should just not engage with these claims, that he spends too much time "refuting bad ideas" and tackling "stupid claims for the democratic benefits of technological pixie dust" and goes on to say that "To really understand how the internet affects democratic politics, we need to forget about the internet evangelists. Not only were they badly wrong, but their notions of democracy were sloppy and unhelpful."

    I sympathize with Henry Farrell: it would be nice if we could forget about bad ideas and move ahead on more constructive paths, and I hope people do. But sloppy or not, those notions of democracy are out there, and are still influential, and Hindman has made a valuable contribution towards refuting them. 

The Web 2.0 Dilemma: Profit and Liability Go Together

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Google and other Web 2.0 companies have a problem: like it or not, profit and liability go together when it comes to delivering content. Maybe opening up the algorithms will provide a solution.

Neutrality and the Common Carriage Bargain

At the heart of the net neutrality debate is an old bargain called common carriage [Christian Sandvig link to a small PDF]:

Common carriage is a common law legal concept that may date to the Roman empire… In brief, a common carrier is a private party offering transport or communication services who is subject to special public duties in return for legal benefits. The chief obligation of the common carrier is nondiscrimination—it must undertake to carry all people indiscriminately. (This is of course the center of the network neutrality debate.) Common carriers include railroads, taxis, airplanes, and telephones.

In exchange for this burden of nondiscrimination, common carriers have received a number of benefits: chiefly, liability protection. As common carriers can have no interest in the content that they carry, they are not liable for transporting stolen property—you can’t sue the phone company for copyright infringement if a telephone is used to read aloud a copyrighted work. Carriers may also not be liable for any other illegal content: offensive messages, indecent messages, or death threats.

The bargain is a problem for Internet Service Providers who want to carry out content-based traffic shaping to make the most of their investment in networks but who don't want to be liable for illegal or offensive content passing through their systems. Profit and liability go together: ISPs who argue that "we can't be responsible to the law for the content we deliver, but we have to be responsible to our shareholders for the content we deliver" have an obvious consistency problem.

Common Carriage 2.0

As the Web has morphed into Web 2.0, openness is less about filtering at the level of TCP/IP packets and more about what the major platform owners do. Peer to peer traffic has fallen off dramatically in the last couple of years, replaced by video streaming from YouTube and file sharing sites such as Rapidshare [link]. What responsibilities does Google have for the content of YouTube videos? Is Rapidshare a common carrier? And is there a role for search neutrality as well as net neutrality?

Here is where the common carriage bargain comes in. Google's advertising-driven business model is based on matching advertisements to content. As soon as Google started down this path it could no longer shrug its shoulders at regulators and say "who me? I don't know what's on YouTube. I'm just the carrier." To make money it built algorithms that know about the nature of the content, and the more it wants to make money the more those algorithms will know, and the copyright owners will have Google by the short-and-curlies.

Google's response has been to accept liability to preserve its advertising revenue. And where does that revenue come from? Yes, it's Ye Olde Media Companies [September 2008 link]:

McKinsey Quarterly: Will the Internet bring down barriers, making markets more democratic?

Eric Schmidt: I would like to tell you that the Internet has created such a level playing field that the long tail is absolutely the place to be—that there's so much differentiation, there’s so much diversity, so many new voices. Unfortunately, that’s not the case. What really happens is something called a power law, with the property that a small number of things are very highly concentrated and most other things have relatively little volume. Virtually all of the new network markets follow this law.

So, while the tail is very interesting, the vast majority of revenue remains in the head. And this is a lesson that businesses have to learn. While you can have a long tail strategy, you better have a head, because that's where all the revenue is.

And, in fact, it's probable that the Internet will lead to larger blockbusters and more concentration of brands. Which, again, doesn’t make sense to most people, because it’s a larger distribution medium. But when you get everybody together they still like to have one superstar. It's no longer a US superstar, it's a global superstar. So that means global brands, global businesses, global sports figures, global celebrities, global scandals, global politicians.

So, we love the long tail, but we make most of our revenue in the head, because of the math of the power law.

Last month Google followed through by partnering with Sony and Universal Music Group to launch Vevo, the YouTube-based site for music videos (currently available in the US, Canada, and Japan only). The videos on the site are encoded to prevent downloading. They are surrounded by ads. They are removed from the YouTube APIs so that third-party applications can't access them [link]. It's a closed site based on closed technology – so much for Google's commitment to openness as announced a week or two later [link]. But then, Google had little choice, given where its advertising money comes from.

The Vevo venture is extreme, but the same principle applies to other material on YouTube: the more Google extends its advertising throughout the site, the more it accepts the role of content cop, tracking down and removing material that is accused of breaking, the terms of copyright.

The issue goes beyond YouTube: here is Google's claim that it can't be held to blame if its image search algorithms give top ranking to an offensive picture of Michelle Obama:

Sometimes Google search results from the Internet can include disturbing content, even from innocuous queries. We assure you that the views expressed by such sites are not in any way endorsed by Google.

Search engines are a reflection of the content and information that is available on the Internet. A site's ranking in Google's search results relies heavily on computer algorithms using thousands of factors to calculate a page's relevance to a given query.

Or, "what me guv? I'm just the postman." But obviously Google can and does filter its image results by other criteria – it has a "safe search" option that excludes pornography but does not exclude racist images – and those criteria themselves are not chosen algorithmically.

Is Openness the Solution?

The advertising model is currently driving all before it when it comes to the Web, but while Google, Facebook and others will try to play both sides of the game, in the end you can't be both a common carrier and a successful ad-driven company.

Google's defense of "it's not me, its my algorithms" will be challenged at some point, and Google will either have to take responsibility for the content it delivers, or forego revenue. But maybe there is a third option, which is to open up the algorithms themselves. Right now, Google expects us to take on trust what it can and cannot do, but that defense won't last for long, particularly because of the barriers to entry for large-scale search and content hosting. One bargain it may be able to strike would be to keep both its
common carrier role and its ability to make money off advertising, but to lower the barriers to entry for competitors by opening up its code and its data centre architecture. Despite its vaunted commitment to openness, Google won't do this without a struggle, but maybe it will if it provides a way out of the common carrier dilemma.