In this podcast, Seth discusses Google’s business model and how Google’s success impacts our society and culture.
For many of us, the idea that we could very quickly and reliably find unlimited amounts of information for free is irresistible. Before Google, there was an example of the TV Guide magazine. TV Guide was sold for over three billion dollars because it was the go-to source for many people on what to watch on the television.
Fast-forward to present days, Google’s search engine is enjoying a similar high status like TV Guide. Google’s search engine is the go-to source for many people on what to surf on the Internet.
Google’s search results are free, but Google makes a handsome sum of revenue by displaying permission-based ads next to those search results. Google’s search engine is delivering anticipated, personal, and relevant messages that match up what the person was searching for.
Most of the searches do not make any money because we are not clicking on one of those ads. But when we do click on an ad, Google makes money depending on what we were clicking on. Google auctioned off those ads to businesses which are desperately hoping to get our attention by clicking on the ad and go to their websites.
The auction model works because businesses see the ad space as the way to have a voice calling out to prospective customers. By bidding and winning the ad action, businesses feel they have now had a say in influencing the consumers. By losing the auctions, our ad does not appear, and we lose the opportunity to attract potential customers.
Very soon, businesses want to out-bid their competitors to win the ad space. As long as the market stays competitive, the ad auction mechanism ensures Google will maximize their revenue for every ad space that a business is willing to pay for advertising.
Around the time of Google’s ascendancy, a craft called SEO began to hit its stride. In the beginning, the idea of SEO was benign. SEO organizes our website so that, when Google visits it, it knows what the website is about. If we can make it clear for Google to figure out what our website is about, we make it easier for people to find us when they are searching Google.
Over time, people get greedier with using SEO, and that leads to the black art of SEO. If we cannot be on the first page of Google’s search results, we will lose. That thinking leads to tweaking the SEO, so our website will appear on the first page no matter what. All these SEO tweakings just lead to search results that are not relevant or do not make sense at all.
At the same time, email continues to evolve, and the bad guys continue to battle for our attention via email as well. Google tries to be helpful by creating the mechanism of such as social, updates, and promotions inboxes. The side effect of the categorized inbox is that it can easily filter out the legitimate messages that we want to receive. We need to be conscious of the possibility of letting one company controls what we see or do not see.
The reality is that there will always be people or organizations who want to be our curators or filters. There were three TV networks and bookstores. Now we have Google, Facebook, Amazon, and others. The bulk of our economy and our culture is tied together between these. We need to be mindful of their purposes and decide how much control we can relinquish and should keep.