Google Considered Too Big To Fail 366
theodp writes "Doc Searls is worried about the way Google makes money. 'Nearly all of it comes from advertising,' he frets. 'That's what pays for all the infrastructure Google is giving to the rest of us. As our dependency on Google verges on the absolute, this should be a concern.' Have we reched Peak Advertising? Blogger Dave Winer says amen, asking if Google is already 'too big to fail.'"
Comment removed (Score:4, Interesting)
This seems like a nonissue... (Score:4, Interesting)
It is always a sad occasion to lose a subsidy that was previously benefiting you; but it is only a disaster if there aren't other ways of paying for whatever it is that you need. In the case of Google, they have already been playing with pricing schemes for enterprise versions of various of their services, and it wouldn't be rocket surgery for them to roll out retail equivalents if the ad market really tanks(Frankly, I for one would in some respects be relieved to be paying straight, rather than in personal data). Given their years of experience running their services on the comparatively thin sauce of advertising money, Google could still easily offer very competitive pricing.
The people I would be much more worried about are the huge number of random third party websites that run ads in order to more-or-less break even on bandwidth/hosting. Because Google is big, and comparatively trusted, and offers services that most of its users use more or less continually(ie. I might visit "randomwebsite.com" once, or once every few months, but I'm likely to check a gmail account or do a bunch of google searches every day to every few days). If the ad market does in fact tank, Google, and similar large entities, will be able to just start billing directly without transaction costs eating them alive. Since micropayments are still more or less a pipe dream, the little guys won't be able to do the same.
Having to pay $X/year for gmail would be a minor nuisance. Having large numbers of ideosyncratic 3rd party sites either dry up or move into walled gardens who would act as payment processors/aggregators(Hello iTunes!) would be a serious and negative change to the web.
This is particularly a concern because, while Google is quite good at what it does, most of its offerings are in substantially commodified markets. Gmail is one of the better free webmail services out there; but it is hardly the only one. Even if all free webmail services dried up, pay webmail services of quite modest cost are also a dime a dozen. Our only "absolute dependence" on Google is exactly the same dependence on any email provider, the fact that switching email addresses sucks. In search, again, Google is good at search; but switching to a different search page isn't terribly difficult. A few legacy devices/programs that depend on some search API and cannot be usefully updated might be up shit creek; but everybody else would be fine. Android would probably suffer if its primary developer/main unifying backer disappeared or defunded the project; but there would be nothing stopping the core OSS components moving forward on the devices of whoever wanted to use them. The fact that all this has traditionally been free is handy; but switching to paying for it, either from Google or from somebody else, would be doable.
It is the thousands of random little guys, occupying all the weird little unique niches, that would be more of an issue. Few of them are large enough to make subscription pricing reasonable, even if people would stand for that, and micropayment is going nowhere outside of walled gardens that aggregate the micropayments, which aren't a terribly encouraging development.
Re:Our "dependency" on Google (Score:3, Interesting)
Agreed. Furthermore, for e-mail, you can make switching providers completely transparent to the people with whom you communicate. I've been using my alma mater's forwarding service for the last decade. During that time, I have switched from Hotmail to my (former) ISP's e-mail service to GMail. The last move occurred only because I was switching ISPs. With all three services, I used IMAP or POP and a local mail program, using web access only when away from my own computers, so nothing really changed on my end. And nothing changes for people I'm in communication with. They keep sending e-mails to my alma mater's forwarding service, and I keep using that address as my outgoing address.
So failure of Google would be minimally disruptive to me. Failure of my alma mater would be far more disastrous. Given its track record, though, I'm willing to bet on my alma mater outliving me.
Hmm, unlikely (Score:2, Interesting)
It all seems rather unlikely, I can imagine someone slowly taking away google's advertisign business but I don't see that advertising will suddenly disapear which is what this article seems to be based on
Re:What a doorknob (Score:5, Interesting)
This I fundamentaly agree with. In my view "too big to fail" actually means "too wedded into the rest of economy to be alowed to fail". The banking system (certainly here in the UK and as I understand it in most of the world) was just that. Not only were individual banks so big that if they collapsed they would bring down vast sections of the economy but they few huge banks there were all made the same stupid mistakes so the same conditions meant they were all about to fail at the same time (the 1930s would have looked like nothing if the governments hadn't stepped in).
By comparison Google provide:
- web searching services; but if they disapeared then most of us would just move to Bing or Yahoo.
- maps and GPS navigation; most of us would get by without it, thouse that wouldn't are probably using TomTom anyway
- email; this could cause more of a problem for people as email accounts take a while to mature. That said, not many businesses use Google mail so it would people's personal mail boxes that would be effected and people can probably manage their lives without them.
- other web tools (e.g. blogging, Google Health, YouTube etc) OK; a few people might be a bit upseat and Google Health might have to be sold off but, big deal.
My gut feeling is if Google disapeared overnight a lot of us would be confused for a few days an then get over it. Hardly too big to fail.
But... supposing they DID control significant parts of Business communications; or DID manage 50% digital health records; or DID run the most successful micro-payment scheme in the world; etc. Not unlikely scenarios and then I think they might be too big to fail.
- Christopher
Excite@Home (Why Google Needs a Trust) (Score:2, Interesting)
The @Home corporation took down Excite right about the time of the Tech Bubble Burst. If anyone remembers having an Excite email address, when Excite had all these free services to store some of your information online, you probably remember Excite having to delete all of your stuff as the company meltdown thanks to their business partners at @Home.
To call Google a company that is too big to fail would definitely be an understatement, especially if like Excite, they had no plan of action in the event the company collapses.
Companies like Google need some kind of living trust, much like a person who in the event of their death, can hold on to the property (physical or intangible), the data can be transfered to a smaller company that can take care of the data Google's customers asked them to hold on to.
Another Idea would be to create a government agency similar to the FDIC that instead of insuring money, insures data, either provides a backup of the data that you have posted online that you and only you can access it if the company you use to hold that data bellies-up, and provides compensation if that data is lost.
The only problem with having the federal government create such an agency is the fact that they are the Federal Government. There is information about yourself that they have that you can't access unless you are either a member of law enforcement or part of the agency that collects all that data about you. Which is stupid, considering if you want to know everything about yourself, including things that you don't know about that may prevent you from getting a loan or a job, you can never learn more about yourself to do anything positive or constructive that could offset the things in the past, or that you are doing, that can prevent you from living a better life that could help you be a better person.
If there is something about you that you want to know, it should never be a secret from you. And if there is stuff that you want to save, you shouldn't have to lose it because the company you entrusted to hold on to it was too big to fail.
Re:Marketing - mod parent up (Score:3, Interesting)
Marketing is one of the defining features of an advanced economy. It isn't some temporary stage that you shrug off as you get to the next stage of development. So far there is no next stage of development. ... We are no where near a post-marketing society.
That's an insightful remark. The cost of marketing many products and services now exceeds the cost of providing them. Long-distance phone service, for example. Note that there's very little marketing of long-distance phone service now, while it was once heavily promoted. Now, it's typically bundled with something else, to cut the marketing cost. It's worth asking what other products and services may go through that transition.