Google is now a subsidiary. A holding company called Alphabet, with former Google CEO Larry Page as its CEO, was formed today, with a diminished Google (now led by Sundar Pichai) as one part of the conglomerate. Parsing the press release, I could not really understand the move, though I thought the ever-reliable iOS indie developer Marco Arment (you should really read his blog) cut through the jargon perfectly:
“Google is not a conventional company. We do not intend to become one,” said the world’s largest advertising corporation.
— Marco Arment (@marcoarment) August 10, 2015
This sentiment gets at the heart of what seems so lacking in all of Silicon Valley’s self-gratulatory talk about “innovation” in general and Google’s self-promotion as an “unconventional” firm in particular. Despite all the bluster about solving big problems and “disrupting” this or that, the essential business model of the ex-Google, Facebook, Snapchat, etc. is advertising, something with which a living room viewer with her rabbit-ears TV set in the 1950s would be readily familiar.
Moreover, how long can advertising last? It seems like an absurd question, but consider this argument from Astra Taylor’s excellent “The People’s Platform”:
“Advertising is, in essence, a private tax. Because promotional budgets are factored into the price we pay for goods, customers end up footing the bill. That means that, all together, we spend more than $700 billion a year on advertising, a tremendous waste of money on something that has virtually no social value and that most of us despise.”
This hatred of advertising has not reached critical mass yet. But it seems to be bubbling up in the increasing usage of ad blockers and services such as Disconnect and Ghostery. It also may be contributing to the operational and product changes pursued in recent months by ex-Google and Facebook, which split up and introduced a tightly controlled non-Web platform (Facebook Instant Stories) for publishing stories, respectively. Serving ads on the Web is a miserable business.
Early last year, I wonder what it would take for Google to decline, at a time when Google was seen as “catching up” to its chief rival, Apple (the monetary gap between the two has only widened since then). I compared Google to a church, with few or no direct payments from its “users” and heavy subsidies from everyone from big box retailers shelling their new deals to Apple itself, keeping Google as the default search engine in iOS and OS X:
“Google is like a church or a cathedral. That is, it is frequently visited, assumed to be a mainstay of the cultural fabric regardless of external economic conditions and – most importantly – it collects little to no money from any of the end-users who interact with it. Sure, parishioners may make a slight donation to the local church, but the real funding comes from other sources; likewise, Joe Web Surfer doesn’t directly pay Google for anything, with the possible exception of a buck or two for extra Google Drive space or Google Play Music All Access. Hence, the actual business of Google is abstracted from consumers, who end up spending little or no time contemplating how or why it could go belly up – it’s not like they can point to reduced foot traffic or ridiculous clearance sales as harbingers of decline.”
Google was a trailblazer not just in search engines but also in the $0-per-use business model that is now pervasive across the Web. A writer like me can churn out reams of “content” for the insatiable Web yet receive a fraction of the compensation of someone who builds the technical infrastructure that supports ad bidding and placement. Readers by and large pay nothing, existing only as “clicks” and “pageviews” to be monetized by irritating ads served by Google. And yet without us or the shrinking number of sites that still try to do original reporting instead of running on the homogenous Game of Thrones/Silicon Valley/Hillary Clinton hamster wheel created by Google, Facebook et al, what would the Web (or anything else that relies on “content”) be?
Alphabet is being spun as an exciting new phase in ex-Google’s history – no surprise there – but it feels like decline. It comes off as an inevitable running-aground, at a time when ads are resisted with rising fervor (blocking is coming in iOS 9) and all the low-hanging technological fruit – i.e., satellites, microprocessors, IP networks – spawned from the 20th’s century public sector investments has been picked, leaving only relatively mild “innovations” like Material Design or streaming music services to suck up the media oxygen and leave the sycophantic tech press breathless. The “big problems” that ex-Google is now structurally committed to solving are more of the same, fantasies spawned from direct obsessions with sci-fi and now-dominant geek culture. Google is normal, and Alphabet only confirms it.