Only “illicit businesses (cigarettes or drugs) ... could rival these economics”, said Google vice-president for finance Michael Roszak in one of the notes that the search giant fought to keep from being made public.
Roszak started the July 2017 note with: “Search advertising is one of the world’s greatest business models ever created.” He added: “We are fortunate to have an amazing business”.
The notes, supposedly from a training session, have come to light in the US government’s first major antitrust case in two decades.
Talk about an own goal. Having lost the fight for the notes not to be made part of the court record, Google has tried to portray the missive as part of “a public-speaking class in which the instructions were to say something hyperbolic and attention-grabbing,” a spokesperson told Bloomberg.
Google’s lawyer, Edward Bennett, told the court the notes were Roszak’s attempt at “cosplaying Gordon Gekko” — referring to the despicable lead character from the 1987 movie Wall Street.
Yeah right.
Roszak said in court that his notes were “full of hyperbole and exaggeration”. But they weren’t. This is how Google grew from a scrappy little start-up to being so big — and so powerful. This is Google’s attitude laid bare.
As Roszak wrote in the note: “Part of what has been so amazing about that is what we’ve essentially been able to ignore, one of the fundamental laws of economics — [that] business needs to worry about supply and demand.
“When talking about revenue, we could mostly ignore the demand side of the equation (users and queries) and only focus on the supply side of advertisers, ad formats and sales.
“Sure, we had to build the best product, made smart marketing/distribution investment to get our product everywhere, but we could essentially tear the economics textbooks in half.”
Of course Google didn’t have to worry about the demand side, because the company effectively created it with its own programmatic advertising.
By collecting vast amounts of data about individual internet users, Google (and a host of other data-mongers, including Facebook) peddled the idea that an advertiser could speak to a highly targeted audience through the search giant’s huge network of advertising placement.
Google could “essentially tear the economics textbooks in half” because it had managed to capture both sides of the equation. It created programmatic advertising — for which it set the prices — while also creating all the places and opportunities for that advertising.
It’s gaming the system, which is what the US department of justice and most of the states are arguing. Roszak’s “embarrassing” note, as the judge described it, just makes the point that everybody knows.
That’s why it’s called surveillance capitalism.
Likening Google to selling “cigarettes or drugs” is an apt comparison. Once programmatic advertising got the world hooked, there was no way to get people off Google’s own form of a drug habit they could not kick.
*Shapshak is editor-in-chief of Stuff.co.za and executive director of Scrolla.Africa