Small talk

Do Bing and Culi sound familiar to you? If they don’t it seems likely that you are tied to Google, as are the majority of internet users. Some say this is worrying, at best. Enormous amounts of information are collected by the internet company that has been turned into a verb. Countless times people speak of ‘Google it’, instead of just ‘search for it on the internet’.

The information Google collects is not just of the kind you’ll be able to find on Wikipedia. Involve private information and preferences and you are getting much warming in defining what they’re after. But saying ‘what they are after’ has a tendency to overestimate or make an apocalypse  of what is actually happening. That’s not yet necessary, even if keeping a close eye on what is happening would be wise.

You won’t be able to wave it all away by saying that Google is just a search engine. For a search engine they have quite a lot of acquisitions, diverse and not very cheap, as you can see here. Its webby fingers are all over the place. As long as they’re only meddling with internet affairs people are unlikely to worry too much but in recent years the boundary has become blurred, and no one seems to know where the real world starts and where the digitalized one stops.  Maybe ‘blurred’ is already the wrong word and the difference is merely a linguistic one, which I think more likely.

Take a look at journalism and advertisements for instance. They are all tied to this new-age medium. Newspapers delivered to your house every morning are not extinct, though numbers have been falling for years. And with those falling numbers come falling advertisement revenues. Websites have usurped a part of this journalistic task, as we can see by the numerous variants that display news such as blogs, YouTube, CNN’s I-report and more. That is not bad, not at all. It only makes news more accessible, at any time and place. This has not gone unnoticed to the market of course, which has pumped vast amounts of money into internet-activities. With money comes dependence, and with dependence often influence. And that is one of the aspects in which Google is almost ubiquitous. Familiar Google-ads are all over the place. And you might have noticed they’re not the same everywhere. Have you ever wondered why some ads come so close to the actual content of the site you are looking at? They know what they are doing at Google’s bureau.

They certainly do. Not only is their number of visitors extremely high, they also have a huge database of websites. Some new search engines could be heard saying that ‘their results would be more numerous and better’.  This should lead us to the conclusion that apparently not every site ends up in a search engine. No surprise maybe, but good enough to come up with another question: Why and on what grounds does a site end up in Google? It should be a ‘good web page’ is the answer.

I’m not sure however, that Google should decide what and how a good website should be. Such authoritative judgments require omnipotent wisdom or one hack of a table of reference. And this constitutes our problem: A monopoly. It other words: Google pulls the strings. If a site does not conform to its ideas of what a good website should be like, it’ll be excluded from the game. I don’t think that’s good for competition and innovation. It’ll be like entering a store in search of a new T-shirt, finding only green ones with spots. And even though those spots might have different spatial locations and colors on each t-shirt, we’ll still get the feeling we have not much of a choice to make. Likewise with the internet: We might want all the websites to be websites, but we don’t want all of them to be alike in looks, content and fashion. No border controlled by an officer in Google uniform.

We could compare this to Microsoft’s Windows. Everyone knows it, most of us use it. But not because we have explicitly chosen to use Windows, at least not for most of us, only because we have never reasonably considered an alternative. We know Apple primarily for their I-pods, not for their I-Macs: Their share on the computer market is unlikely to even make Microsoft’s throne wobble. We have also seen the European Commission fight Windows for its implementation of Media Player, Internet Explorer and other self-made programs into its system. As long as no obstacles were placed on their route, Microsoft could shamelessly advocate its own software. Many accepted this and never downloaded or used alternatives. This stifles innovation, because here a monopoly is no longer the result of a superior product, but of a prior-achieved position and cleverly abusing it by making it virtually impossible for competitors to get customers.

You might say here that, since Microsoft and Google are companies, they should do as they please. After all the products are theirs, if customers do not want to use them they can search for an alternative. And to a certain extent this should indeed be the case. But with power comes responsibility. They got their power because of their superior product, and when it is turning its back on that quality in exchange of a better market-position, we will have all the reasons we need for complaining.

The situation is not as bad as it is with Microsoft yet. Google supports many open-platform and open-source projects, which eases the pain a lot. Even if not wholly for unselfish reasons, it at least gives the impression that it does not aim at preventing any kind of progress. If anything it wants to speed up that very process. Even so, it’s a good thing that Culi and Bing are trying to enter the battle and put up a fight. They might even be good enough, despite the fact that so far they all run into the same wall. Google obtained such strategic power that when alternatives arise people merely nod approvingly, but then turn back to the site they always use when something needs finding.

Over the past year there have been many attempts and proposals aimed at policy making that in some sense or another have mocked the strong beliefs so many countries proudly held up high. Now, after the hardest blows seem to have passed, traces of national protectionism have popped up everywhere. The most infamous known is probably Barack Obama’s import tariffs on Chinese tires, though the uproar this caused in China hasn’t lead to serious counter strikes yet.

But there are other ways than tariffs to regulate the market or, in a less ambitious sense, try to influence its direction. Here the big car companies might come to mind.  And rightly so: The money involved with the bail-out of General Motors (GM) was high. Recently, with the involvement of the German government in order to speed up and secure the sale of car-manufacturer Opel, the tale has got a new twist.

Herein GM at least showed us last week that they still know what it is to do business. The company has since 1929 been the owner of Opel, a German car-brand. But the crisis hasn’t loosened its grip completely, wherefore the sale of Opel was thought to be a necessary or wise step to cure the company of its many illnesses. But American GM had not so much a change of heart, as a change of opportunities. And opportunities are taken, not handed out is what they seem to think. Germans in any case didn’t see this coming, judging by their calls of outrage. Because now we know GM will not be selling the brand Opel to Magna. The reasons are clear.

It started because Germany was reluctant to turn a blind eye to the laying off of too large a share of its workforce, since they think it is important to keep as many people working as possible. So to prevent GM from drowning they offered 1,5 billion Euros in order to close the financial gap, which was aimed at securing possibilities for an Opel-sale. And they took it to be as such. But another offer by German politicians of 4,5 billion Euros, eventually changed the whole scene. At first this provisional loan was aimed at Magna (a Canadian company) and Sherbank (a Russian company), to make sure that after the take-over German Opel factories would remain operational. Before we go over the whole issue why GM is not selling, several points should be noted.

The first is the fact that European institutions do not seem to put free market reign on an untouchable pedestal anymore. Help provided in this manner is something which cannot be compared to bank bail-outs, which were necessary from a more general point of view. Second is that the Germans might feel betrayed by their American car-colleagues, but they have absolutely no reason to. A more tentative note might be stated as a question: What would have happened when neither GM nor Opel would have made it? It’s clear; survival without help can be summarized as ‘unlikely’. But Germany’s help towards both GM and Opel came on top of everything the White house had already done. It is hard to get rid of the impression that the two companies would have walked straight into death’s outreaching arms without it. But maybe we should be glad that they have not. Many people depend on their jobs, and so do quite a lot of businesses that can only work because they are so intimately tied to the car-makers. A rich history and an excellent body of knowledge can hopefully only be helpful in the future as a driving force for innovation.

The story continues with Neelie Kroes, the European Commissioner for Competition. She demanded that the money reserved for securing Opel’s future would have to be available for any (potential) owner, not just for a set of two buyers who were willing to meet German demands. The strongest argument to support her claim runs on government partiality, which shouldn’t put competitors at a disadvantage by their free-market meddling. And indeed, with an aid-kit of money it seems likely that even General Motors would have acted swiftly in deciding not to sell the company.

In any case the process greatly slowed down the process of an Opel-sale, and eventually killed it. The economy, though far from total recovery, can at least leave the intensive care. And GM states more or less to be thinking along those lines when they explained why Opel will not be sold:

[because of] “an improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM’s global strategy.”

Businesses are not founded in order to please politicians, and that is something well understood by GM. They took the 1,5 billion euro stimulus gladly. Bu if Opel were in sound health it wouldn’t have to be sold in the first place. So it’s reasonable to think that GM was or is unwilling to sell such a company if it has no financial reasons to do so. Some billion Euros of aid would do the trick for potential buyers, but its actual owner thought so too.

What counts is the result, clear as it may be that Germany did not like being outwitted by the American company. But why wouldn’t GM be entitled to the same help as all of the others? Whether the stimulus package is a good thing remains in the open, but Kroes is right in insisting that if the money is available to one buyer, than likewise to its competitors. And now with the market making a slight bend towards more promising grounds, GM is hardly to blame for this clever move.