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Fact-checking Google Schmidt’s “Ich bin ein Big-fibber” Berlin Speech
Submitted by Scott Cleland on Tue, 2014-10-14 22:30
History should remember Google Chairman Eric Schmidt’s speech in Berlin, “The New Gründergeist,” as the “Ich bin ein Bigfibber” speech, because of his many big fibs about Google’s antitrust and data protection problems in Europe.
Claim: “Really, our biggest search competitor is Amazon” (not Bing or Yahoo.)
Facts: Google crawls 60 trillion unique URLs to create its search index of the world-wide-web; Amazon does not crawl or search index the world-wide-web.
Amazon’s paying customers are consumers; Google’s paying customers are advertisers.
Amazon actually is Google’s biggest search advertising customer in the U.S. paying Google over a half billion dollars a year to be discovered by Google’s massively larger user base.
Note: EC competition authorities need to remember that to get the FTC to approve Google’s acquisition of mobile ad leader AdMob, over its “serious” concerns, Google claimed Apple’s entry into the mobile advertising business would make Apple Google’s biggest mobile advertising competitor. After 3.5 years, Apple’s iAd predictably has less than 1% share of worldwide net mobile ad revenues per eMarketer.
Nevertheless, Google currently is hyping that the EC should view another non-advertising-company, Amazon, as a serious search/advertising competitor to Google, just like Google deceptively hyped non-advertising-company, Apple, in 2010. The old adage is appropriate here for the EC: “fool me once, shame on you; fool me twice shame on me.”
Claim: “No one is stuck using Google.”
Facts: Former Google Chief Business Officer told investors on a 2013 earnings call that half of all Google searches, over a trillion a year, originate from websites other than Google per All Things Digital. That means that users that search on over a million websites worldwide, are unwittingly “stuck using Google” Search, Analytics, DoubleClick ad-serving, YouTube, Maps, Android, etc, because Google increasingly requires sites to exclusively take a larger bundle of Google services in order to keep sharing in Google’s advertising revenue as a Google “partner.”
If the EC expands the Google Search investigation into Android, and potential other areas like YouTube, Android, Maps and/or Google+ as DGComp VP Almiunia has publicly intimated, EC investigators will have every opportunity to confirm for themselves that tens of millions of Europeans are indeed “stuck with Google” because of Google’s longstanding and increasing practice of tying its products and services together to extend its dominance.
Claim: “Our experience is that you do not need data to compete online.”
Facts: For over a decade Google has preached incessantly to the world about the superiority of data-driven business decision-making. Chairman Schmidt’s recent book, How Google Works, even has a section entitled “Decide with data.”
Google’s Chief Economist explains the importance of data to competing online to Steven Levy in Wired: “Selling ads doesn't generate only profits; it also generates torrents of data about users' tastes and habits, data that Google then sifts and processes in order to predict future consumer behavior, find ways to improve its products, and sell more ads. It's a system of constant self-analysis: a data-fueled feedback loop that defines not only Google's future but the future of anyone who does business online.”
Google Chief Scientist, Peter Norvig, also emphasizes the competitive importance of having data in explaining: “We don't have better algorithms than everyone else; we just have more data."
Apparently, Chairman Schmidt has forgotten that he explained to Bloomberg, in an article entitled: “How Google Plans to Stay Ahead in Search” why data is so important to competing online when he confessed: "Scale is the key. We just have so much scale in terms of the data we can bring to bear."
Claim: On “network effects…Google isn’t useful because it’s popular; we’re popular because we’re useful.”
Apparently Chairman Schmidt has forgotten a very famous quote of his How Google Works co-author, Jonathan Rosenberg.
Mr. Rosenberg infamously bragged about Google’s very powerful network effects: “So more users more information, more information more users, more advertisers more users, more users more advertisers, it’s a beautiful thing, lather, rinse repeat, that’s what I do for a living. So that’s …‘the engine that can’t be stopped.’”
Claim: “Barriers to entry are negligible… someone, somewhere in a garage is gunning for us.”
Let’s consider the supposed “negligible” barriers a garage-start-up needs to overcome to legitimately compete with and threaten Google.
Google business infrastructure serves: search to 1.3b users in 123 languages; YouTube videos in 61 languages to 1b viewers; Android mobile operating system to 1b users; Maps in 45 languages to 1b users; Chrome browser services to ~1b users; Google+ social network in ~50 languages to 540m users; and Gmail in 71 languages to 425m users – at an operating cost of over $40b annually.
Google’s business operations enjoy: 98% dominance of the world’s top 15m websites that track their users with Google Analytics; a uniquely high number of 2m websites get paid ~$12b a year by Google to collect data on users’ behavior/interests/locations; and a dominant ~90% share of the world’s digital advertisers pay Google ~$58b yr to target users with uniquely comprehensive advertising profiles.
And Google’s dominant model enables: Google to spend more than any entity in the world on data center capital expenditures -- ~$28b from 2006 – 2014 – in order to create 1400 server points-of-presence in 140, or 68%, of the world’s countries per USC.
No one in a garage can reasonably be expected to overcome these barriers to competition in the foreseeable future.
In sum, Google is fact and truth challenged.
If you still doubt that Google’s Internet empire and data dominance is vast, purposeful, lasting and harmful -- click here for the most recent and comprehensive proof.
Google Unaccountability Series
Part 0: Google's Poor & Defiant Settlement Record [5-1-12]
Part 1: Why Google Thinks It Is Above the Law [4-17-12]
Part 2: Top Ten Untrue Google Stories [5-8-12]
Part 3: Google's Growing Record of Obstruction of Justice [6-21-12]
Part 4: Why FTC's $22.5m Privacy Fine is Faux Accountability [7-12-12]
Part 5: Google's Culture of Unaccountability: In Their Own Words [8-1-12]
Part 6: Google Mocks the FTC's Ineffectual Privacy & Antitrust Enforcement [8-10-12]
Part 7: An FTC Googleopoly Get Out of Jail Free Card? [8-30-12]
Part 8: Top Lessons to Learn for Google Antitrust Enforcers [9-14-12]
Part 9: Google Mocks EU and FTC in Courting Yahoo Again [9-26-12]
Part 10: FTC-Google Antitrust: The Obvious Case of Consumer Harm [11-25-12]
Part 11: Why FTC Can't Responsibly End Google Search Bias Antitrust Investigation [11-27-12]
Part 12: Oversight Questions for FTC's Handling of Google Antitrust Probe [11-30-12]
Part 13: Courts Not FTC Should Decide on Google Practices (The Hill Op-ed) [12-10-12]
Part 14: Troubling Irregularities Mount in FTC Handling of Google Investigation [12-17-12]
Part 15: Top Ten Unanswered Questions on FTC-Google Outcome [1-3-14]
Part 16: Top Takeaways from FTC's Google Antitrust Decisions [1-7-13]
Part 17: Google's Global Antitrust Rap Sheet [1-31-13]
Part 18: Google's Privacy Words vs. its Anti-privacy Deeds [3-8-13]
Part 19: Google's Privacy Rap Sheet Updated - Fact-checking Google's Privacy Claims [3-13-13]
Part 20: DOJ & FTC Report Cards [4-12-13]
Part 21: The Evidence Google Bamboozled EU Competition Authorities [4-19-13]
Part 22: EU-Google: Too Powerful to Prosecute? Problems with Enabling Google [5-1-13]
Part 23: Google's proposed EU Search Bias Remedies: a Satire [5-17-13]
Part 24: Google's Antitrust Rap Sheet Updated [5-27-13]
Part 25: Is This the Track Record of a Trustworthy Company? See Google's Rap Sheet [6-6-13]
Part 26: Top Questions as DOJ-Google Criminal Prosecution Deadline Approaches [7-12-13]
Part 27: The Evidence Google Violated the DOJ Non-Prosecution Agreement [8-8-13]
Part 28: Implications of EU Ruling Google Abused its Search Dominance [9-27-13]
Part 29: Google-YouAd is a Deceptive and Unfair Business Practice [10-24-13]
Part 30: EU's Google Antitrust Problems Not Going Away [12-16-13]
Part 31: How the Google-EC Competition Deal Harms Europe [2-10-14]
Part 32: Open Letter to European Commissioners to Reject EC-Google Settlement [2-16-14]
Part 33: Google’s Extensive Cover-up [2-25-14]
Part 34: An Open Letter on Google’s Opposition to Distracted Driving Legislation [2-27-14]
Part 35: Google’s Widespread Wiretapping [3-20-14]
Part 36: The Growing EC-Google Competition Settlement Scandal – an Open Letter [3-31-14]
Part 37: Google’s Glass House [4-14-14]
Part 38: Google’s Titan Spy-Drones Mimic Military Spy Planes [4-17-14]
Part 39: Google’s Anti-Competitive Rap Sheet Warrants Prosecution not Leniency [4-30-14]
Part 40: Google Apps for Education Dangers [5-17-14]
Part 41: Google AdSense Lawsuit Spotlights the Corruption of Unaccountability [5-23-14]
Part 42: Six Ways the FTC is AWOL on Google [7-16-14]
Part 43: Fact-checking Google’s Public EC Competition Defense [9-21-14]
Part 44: Top 10 Reasons Why Google is Causing EU More Problems than Microsoft Did [10-1-14]
Part 45: Google Profiting from Hacked Celebrity Women Photos is “How Google Works” [10-6-14]