Nondiscrimination of News and Google's Monopoly

The Diff

Nondiscrimination of News, the Diff, 2020-10-08

Problem Statement

  • Mass media complain that Google and Facebook make it harder to monetize “serious” news and promote worse news sources.

  • However, the decline in news quality is what people want, as it turned out much fewer people have a sizeable attention span to read serious (“high-quality”) news.

Nondiscrimination to the Rescue

  • Tech companies do discriminate some content vs other because they’re interested in long-term revenue from a customer, not a quick buck at the cost of making the product worse to everyone else.

  • Nondiscrimination is a friend of companies with a higher internal discount rate, who can pay a premium to get a customer, rip them off and lose them.

  • The decision to discriminate or not is mainly driven by comparing the negative effect on the fans of the platform and the positive effect on the fans of the content (the platform’s interests are always prioritized). Think conspiracy theories, anti-vaccination, Russia’s intervention into the US elections and other silly ideas.

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Thoughts on Google monopoly, the Diff, 2020-10-09

  • The victims of Google are the companies that get the “second” click (i.e. provide another search facility after a customer gets to their web site from Google). Google actively dislikes such services.

  • Services for repeat-use vertical search have a chance to win the battle with Google; those, which are single-use, don’t. [MK: the solution is building a brand, focusing on retention and reactivation and monetizing after the search, i.e. not with advertisement.]

  • Google’s own vertical search couldn’t compete with the “proper” vertical search providers (e.g. KAYAK), but over time it became better and kept the visitor within Google’s ecosystem, which in its turn made Google stronger over competitors.

  • Google harms the companies that turn search queries into ad clicks [MK: I don’t feel bad about it at all], which makes internet slightly less commercial.

  • Google wants a world where services relying on it for traffic can turn profit, but not reap monopoly profits. Killing services is not a goal, as decreasing competition makes Amazon and its Amazon Prime more attractive, as they enjoy direct customer visits.

  • Many tech companies find out that user base growth plateaus before user monetization does. This is done by creating consumer surplus (i.e. giving more value than charging for) in the beginning and then slowly capturing this value back. If degrades unit economics over time, too, as traffic arbitrage disappears.

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