On a recent podcast I noted that Google was perceived as invulnerable. In contrast, Apple is seen as temporarily enjoying a stay of execution.[1] This is not necessarily a bad thing for Apple. The more gushing the loathing or scorn, the more likely it’s a reaction to love and attraction. A brand dies not from hate but from apathy.

But nor is it necessarily a good thing for Google be be seen as invulnerable. There might be no “Google death knell counter”. There might not be a “Google is doomed” trope. If an executive from Google quits or is fired there is no investor panic. If a product is withdrawn there is no mourning. There are no journalists pursuing Pulitzer prizes by describing some seamy underside of Google. But there are no overt displays of affection either. Google is seen, on balance, as benevolent and hopeful. The discussion on business robustness is simply missing.

I suspect the absence of scrutiny comes from Google being seen as an analogy of the Internet itself. We don’t question the survival of the Internet so we don’t question the survival of Google — its backbone, its index, and its pervasive ads which, somehow, keep the lights on. We believe Google is infrastructure. We don’t dwell on whether electric grids are vulnerable, or supplies of fuel, or the weather(!)

Too complex, too pervasive. These are systems, not things. And people are not designed to contemplate systems. We leave that to experts, or better yet, computers.

The reason Apple is contemplated at all is that it’s not seen as a system. Even the suggestion that Apple is a system is implicitly treated as an impossibility. Because it’s not a system it’s fragile. It’s a person, or an idea, or a product or a singular “key” to something. It is, ultimately, mortal. The only debate is when it will die and points are earned for calling it sooner rather than later.

But what if Apple were a system? And what if Google were a person (or three?)


  1. The list of Apple Achilles’ Heels is so long and creatively composed that it would take ages to compile, but here are just a few: the Mac (vs. Windows), Digital Rights Management (which kept the iPod alive), dozens of lawsuits (including from The Beatles), the Mac (when it ran Windows), PlaysForSure, Music Labels retaliation, the Zune, Android and clones, the Kindle and Amazon in general, more Mac, iTunes, iPod and iPhone and iPad killers than can be counted; Steve Jobs is ill, Jony Ive will quit, Tony Fadell quit, Rubinstein quit, Forstall was fired, etc. Feel free to add more through comments. See also Apple Death Knell Counter. []
  • blenheimorange

    Is there a link to the podcast please?

  • blenheimorange

    How close are we to seeing an alternative to Google search? Is anything in development to reduce them to the obscurity enjoyed by Yahoo, Sherlock, AskJeeves? The company and the three men will be seen as invincible while they remain unchallenged and closed to detailed financial scrutiny.

    • Speech interface like siri could be google free for the most part.
      Searches in apps and not in browser are a threat.
      Google won the internet by the browser model, next model is still an open battle.

    • Fran_Kostella

      I haven’t used Google’s search on a daily basis for over two years. It started as an experiment to compare the search results from other search engines and gradually resolved into a preference for two other services. Every few months I’ll have a search that returns nothing of worth so I’ll check Google and sometimes it will return something of worth the others don’t have. I speculate that they have been getting a bit more of the darkweb indexed than the others.

      However, lately I’ve noticed that I spend a lot of time searching first on specific sites directly. For example, the Stack family of sites are my go-to for technical questions since they curate things and that reduces noise and wasted time. That’s my preference, high quality information quickly. Lately, more of my need is being met outside search engines.

      • Greg ZX

        I also have turned to more specific sources for a lot of my searches. For general knowledge, I search Wikipedia first.

    • poke

      The real alternative would be if people stopped using Google to find insurance, mortgages, cheap pharmaceuticals, etc. Google could be disrupted by something that looks nothing like search.

    • Jake_in_Seoul

      As I posted on Apple 2.0, Baidu is coming on strong, triumphant in the largest national internet market, and its 45-year-old co-founder Robin Li is now the richest man in China.

    • Iain Perkin

      I switched to Devon Agent Pro (Mac only) a number of years ago and only go to Google once or twice a month (usually at the insistence of my girlfriend). The quality of search is so bad at Google I just gave up.

      • xynta_man

        > The quality of search is so bad at Google I just gave up.

        That’s very true, but it seems that almost nobody acknowledges this fact.

        When Google was first created as a search engine it had way better quality of search results than anyone else on the market. People figured it out and flocked to Google for their searches, hence Google got their popularity and strong market position. Later, when they started making more and more money, it seems that they got “drunk” with it and, like most monopolies, stopped caring that much about quality of their products. Or maybe everybody employed shady SEO tactics, targeted at Google, as it’s the biggest search engine. Either way, the quality of Google’s search results slowly became worse and worse.

        After failing to find what I searched for in Google more and more times, I started checking Bing… and most of the times the results were better than Google — still, not great, but better. Maybe Microsoft did something right… or maybe nobody targets Bing with SEO spam, like they do at Google. Either way the results were either comparable or better in Bing… so I started an experiment and switched to using Bing as my main search engine, reverting to Google only when Bing fails me. Time showed me that when Bing fails Google probably doesn’t do much better. So now Bing is my primary search engine full time.

        My point is: Google stopped caring about their main property, i.e. search, since it “just works” (it terms of printing money for them), instead they playing Facebook, trying to push their failed Google+ social network down the throats of their users, by bundling it with more and more other services and products. Currently there’s no clear negative impact from their policy, but I doubt it will stay like this forever – you can only neglect your product for so long, until users will start to see it.

      • mhikl

        Have you tried “Start Page”. I find the results better than the others, including Google, and search there is done anonymously.

  • claimchowder

    A machine-learning guru recently said that “Knowledge is Google”. His point being that it’s the (typically human-created) inferences that are valuable, not the facts, and how his learning software can help with that and so on…

    I found it interesting that Google was not just identified with the internet, but with knowledge itself. I.e. not just “Knowledge is Google”, but also “Google is knowledge”.

    • Accent_Sweden

      Google is truth, truth Google, —that is all
      Ye know on earth, and all ye need to know.


  • David Lundholm

    Benedict Evans in his most recent (highly recommended) newsletter
    ( suggested “…there’s a certain symmetry in the rise of Nest and the collapse of Nintendo [after disappointing sales of the Wii U]. Hardware is turning into software [i.e. because of game consoles being replaced by apps], but software [i.e. Google] is also turning into hardware [Nest, Motorola etc…]”

    Perhaps because of its even higher share of search in Europe, and its aggressive tax planning, I suspect Google isn’t quite as benevolently or passively viewed here. Sure it’s ubiquitous, but if the politicians don’t get their act together and address the tax issue, it might ultimately undermine the Google = internet position. And that won’t help Google or arguably the internet…

  • poke

    If Apple is a system, it’s a threat to our whole culture. There’s a pocket of the world where a different value system is thriving, better to hope it will collapse.

    • Kizedek

      Like MS was a threat? I’m just glad that a creative, entrepreneurial culture might be replacing the IT, Office culture.

      • poke

        I should be clear: I don’t think Apple is a threat to our culture. What I mean is, in general, people with different values are seen as a threat. The expectation of collapse is a way of devaluing it. Apple challenges traditional business values. For example, people on both sides of the political spectrum have a picture of business where greed is rewarded, efficiency is everything, the qualitative gives way to the quantitative, etc. They differ on whether they think these things are good. Apple challenges those presuppositions. That makes people uncomfortable.

      • Canuk Storm

        “That makes people uncomfortable.”

        You mean it makes Wall Street uncomfortable. They’re the ones who really have a problem with it.

      • Space Gorilla

        Yes, Apple is widely viewed as ‘doing it wrong’. And yet they are very, very successful (especially now that computing has finally shifted to the consumer/mainstream, the user makes the purchasing decision). It’s becoming obvious that Apple wasn’t/isn’t ‘wrong’, and humans don’t like being proven wrong, it upsets them greatly. Hence a lot of emotionally based and irrational behaviour directed at Apple.

      • Padova44

        Yes, you should be clear. Try again.

    • def4

      It actually is a threat to the culture of “more and cheaper is better” and that is exactly why I love it.

    • berult

      From an institutional perspective, your inferential rhetoric sounds absolutely flawless to me. You deserve a 10 from me…for depth, insight, and conciseness. It’s a real pity you had to bear the burden of a clarification down below.

      Don’t worry about down votes. I, for one, got your back. berult.

  • Could Google’s actions be geared to “Keep it going”? I am afraid this is oversimplification. May be not.

    • marcoselmalo

      Could you amplify your thought? A lot of what I see Google doing can be explained as trying to protect their advertising business, although sometimes it seems like they are trying to protect the thing that is supposed to protect the advertising. Their castle moats need moats!

      • Google grew to be a behemoth based on being the best search engine. That was good until most of the searches came from fixed computing. As computing moves more to mobile, it is not clear if revenue through search will be continue to be as robust. Business models should evolve with changing times. To keep the entity moving forward and serving customer needs the business seeks to enter markets that are promising to be big.

  • charly

    Apple exist less than 40 years and it has almost died three times in that space of time (Apple II inventory problem, the years before Jobs return and lastly the dead of the iPod). Google is younger but in its time it never came near death. That is why people wonder about the survivability of Apple and not that of Google.

    ps. In 2008 Apple was an iPod company with a sideline of Mac pc’s. Now it is an iPhone/iPad company with a sideline of Mac pc’s. Most iPod buyers in 2008 now have an Android phone but they stopped buying iPod even if they own a blackberry because it was already included in the phone. Without the success of the iPhone Apple would have been in serious problems. And the next problem is already on the horizon. The $100 S3 which you can buy in a few years.

    • evanspw

      You think? Not Samsung, nor LG, Motorola, Sony or HTC can build an “S3” quality phone for less than Apple can built a roughly equivalent iPhone. They can undersell if they are prepared to take the profit hit, but there’s no magically cheaper manufacturing. On the other hand, at the low end there is an argument than Chinese OEMs (and big companies, like Huawei and ZTE) are coming after Samsung et al and will eat their lunch, forcing them to flee to the high end where Apple eats their lunch right back again.

      • charly

        IN A FEW YEARS

        Silicon has the habit of dropping in price and Huawei & ZTE think of themself as name brand so they wont stay in the low end.

      • xynta_man

        The silicon doesn’t matter (ok, it matters, but not that much) – it’s probably the cheapest element of the iPhone. Silicon doesn’t make iPhone an iPhone. People aren’t paying Apple for silicon.

      • charly

        Should i say screen and silicon. Those to are the two biggest variable costs for iphones

  • stefnagel

    “The real danger … comes when the information about you in Google’s servers eventually, inevitably, fall into the hands of actual evil doers.”

    Siracusa’s point is valid, as quoted in PED’s article based on Horace’s post here. Rene Ritchie, elsewhere, adds: “Companies are predators, like wolves or wildcats or snakes…” True enough. But even predators kill to eat; they cannot afford to kill for fun. Companies become evil when they act thoughtlessly, gratuitously, callously. Like kids. Or like narcissists.

    Google is owned and run by two guys who are unbeholden and unaccountable to its board or its business. And even less so to users, who are not even customers. It’s run on whims. Whims are a deeply flawed approach to manage or govern. Or to avoid evil.

    Even if you like these guys, the guys that follow them might not be so nice. Think Microsoft. Whimsy ain’t a legacy; it’s a threat. The next guys might kill just for fun. (Apple, in contrast, is proving its knows how to do legacy. Jobs’s final gift.)

    We need to find a way to disperse and distribute our personal information, just as we diversify stocks. There is no hope or safety in trusting our personal info to any one company. As Siracusa suggests, there are no winners in business, over time. Securities die. So does security.

    Google as it is constituted today is on a fast track to epic, ethical failure.

    • obarthelemy

      Speaking of ethical risks, don’t forget Apples have absolute control over what software you can run on your iOS devices, actually, what websites you can visit too, and are kown to force predatory agreements about content ( , ).

      You were saying ?

      • Kizedek

        That link is for an Ed Bott article about iBooks authoring tool. He is pretty incensed about his claim that Apple tells you how you must distribute the output. He claims that only free works you produce may be distributed freely, while Apple claims the right to distribute all works intended to be sold.

        He likens this to an imaginary scenario in which MS charged you 30% of your speaker’s fee if you use a PowerPoint presentation in your talk.

        Well, Ed is wrong on at least two counts. Obart, I’m surprised at you (well, not really). This is a pretty fuddy, scare-mongering article.

        1) You can output from iBooks in a number of formats, including all major standard eBook formats like ePub, and PDF. When you output in one of those formats, you are free to distribute your product any way you like, where ever you like, and for how much you like. Yes, you can sell it!

        When you output in the iBooks proprietary format, you distribute through the iBooks store. This is because you can do extra, fancy things with it that you can’t include in the other formats, because they don’t support it.

        This is like using an MS tool to produce a webpage, only to find out that the output includes a bunch of ActiveX extensions, or .net code stuff, or macros, all of which mean you can only make proper use of the product if you are viewing it in IE or Office. Oh, the humanity. The whole internet, supposedly open unlike Apple’s Store, was hijacked for 2 decades.

        Worse, the output of MS products was/is so poor and corrupt (both intentionally and ineptly) that it breaks carefully crafted webpages and attempts to create great print and presentation products most of the time. The wasted time alone is unconscionable.

        You do realize that web designers have to write all kinds of special code just so that their work doesn’t completely break on most versions of IE (6-10 yr old versions of which MS has been very content to let remain on people’s system due to the need to support proprietary, legacy output and an inept use of standards)?

        Therefore, much of the output of much of MS’ products is for sole use by users of their software. Now, if someone produced a Word Doc, or an Excel spreadsheet or PowerPoint they intended others outside their organization to use or buy because of the special little macros or whatnot, I think in hindsight we would all rather there was some kind of publishing platform or Store in place that vetted the content… after all, that is why we have 99% of the viruses we have in the world, which have cost us countless man hours and billions to rectify.

        2) you certainly can use the output of iBooks Author in your talks. Teachers can teach from them. However, if you are availing yourself of Apple’s free publishing service, then Apple would expect you to sell your product through Apple’s Store Front — for example, if you are hoping that other schools buy your superior eBook product. Otherwise, go with ePub, PDF, etc. and compete with the rest of the products out there that don’t have quite the level of interaction nor hold quite the interest for students.

        You don’t have to take the time to put those extra bits in to your eBook, knowing that only iBooks users will be able to take advantage of them. But they make a nice product that people will pay for.

      • Accent_Sweden

        Sorry obarthelemy, but you need to do a bit more research. Nowhere does Apple state they control what websites we can visit. If it does, please reference this. At this point, you are just being silly.

      • obarthelemy

        Easy: what can you do if Apple decide to blacklist a URL or an IP either in the OS or in Safari ?

      • Kizedek

        What if Google blocks them across all browsers and OS’? Oh, wait a minute, they do.

        Web pages may be completely blacklisted by Google for everyone. Then the owner has to apply to Google and show they have removed offending files, or whetever Google requires (maybe a site was hacked or something).

        Thus, I have no recourse even if I want to see the page anyway (the malware doesn’t affect my device), or even if I have asked Google to keep its nose out of my system, or even if I try to make my non-Google browser settings keep Google’s interference at a minimum (Google crossed the line there)…

        no matter what I do, I can be unable to access certain webpages, because Google is in the position to hold up the process of passing the data and content from server to server and node to node around the world, so that the data and content I requested don’t even reach me in the first place!

      • obarthelemy

        For all browsers and OSes ? What are you on ?

        Google can blacklist sites/URL/IPs from tehir search results, which affect user of their search engine. Not even Android users are forced to use that engine…

      • Kizedek

        I have used several different OS’ and browsers to check sites that are down because Google has blacklisted them. You get a warning and a holding page saying the site has been blacklisted. The site is effectively taken off-line until it is de-blacklisted, whatever server it is hosted on.

        Whether there are ways around it or not is moot — as far as your visitors are concerned, it is very effective, very disconcerting, and you have a very real problem.

      • obarthelemy

        I’ve never, ever, come across such a situation , nor has anyone around me, i just double-checked.
        Off the top of my mind, it is plain impossible, Google don’t control source websites, nor any of the tubes inbetween (DNS servers, IP infrastructure…). The most they can do is blacklist a site in Chrome OS, Chrome, or their search engine, they can’t boot a site off the Internet. I’m not aware of Google ever having done so at the OS level. I’m aware of several instances at the Search level, and at the Browser level, they add a confirmation page “this site is known malware, do are you sure you want to proceed, Y/N”, like IE and Opera do.

      • Iain Perkin


        I just checked and iTunes has the Opera App at version 7 so the point of disallowing anything other that a reskined Safari does follow thru. Should I look for more?

      • obarthelemy
      • Shawn Dehkhodaei

        Google Chrome is on the App Store …. is that also considered a “reskin” of Safari? Or maybe a Safari clone/ripoff?

      • obarthelemy

        Yes, the Google Chrome on the AppStore is forced to use Apple’s renderng/js engine too, and not the fast one, the other one. See link above. Just a reskin. Apple’s rules…

      • Kizedek

        I can assure you that sites can be completely blocked — to re-iterate, though, since you don’t seem to have read my post: it is the visitor’s ISP doing the blocking, by using the Google blacklist as a filter.

      • obarthelemy

        Oh, OK, the ISP does the blocking based on lists maintained by Google. Bad ISP, bad.

      • DesDizzy

        Yup Virgin do this in the UK

      • rattyuk

        “For all browsers and OSes ? What are you on ?”

        Google is not just a search engine. It’s pretty easy for them to block an iP address from their DNS servers which are widely used…

      • obarthelemy


        “Does Google Public DNS offer the ability to block or filter out unwanted sites?
        No. Google Public DNS is purely a DNS resolution and caching server; it does not perform any blocking or filtering of any kind. We believe that such functionality is best performed by the client. If you are interested in enabling such functionality, you should consider installing a client-side application or browser add-on for this purpose.”

        So, no. I call FUD.

      • fud

        You were the one suggesting that Apple would ban websites because they may technically have the ability, so it’s amusing to see you call “FUD”.

      • obarthelemy

        Apple are already banning apps based on content (as opposed to apps that interfere with other apps or the OS, which Google also does). Banning sites is not very different.

      • fud

        And apps that interfere with their core business, like ad-blockers. I don’t really understand your point. I might call it “FUD” though.

      • aylk

        obarthelemy you are one of the finest examples of an idiot.

      • obarthelemy

        “Apple has shown some interest in regulating how I do something on one of their devices. Only Google has shown repeated interest in regulating what I do”

        Porn apps ?

      • Kizedek

        And some stores don’t sell porn. Your point?

        In a general browser app (you know, one made for accessing web pages generally), you can visit any site you want.

      • obarthelemy

        My point: Apple are right now blacklisting apps. What’s next ?

      • Kizedek

        That is no different than retailers deciding what they do and don’t stock. You can’t force a retailer to stock your porn or your weapons, or anything they don’t want to stock.

      • obarthelemy

        Not quite: it’s like the place where you’re buying your house forcing you to buy groceries only in the on-site shop, and that shop not offering everything.
        Your example gives the impression that one could go to another shop. Once you have iOS hardware, you don’t have that option for apps.

      • Kizedek

        No, not groceries, only “housey” things, like electricity, gas, coal, roof tiles that come through the infrastructure built into the whole housing development. And that’s pretty usual — most people can only buy utilities from the companies that actually have access to the infrastructure actually hooked up to their homes.

        It’s kind of nice, because you want the coal company to come and shovel the coal directly into your scuttle — you don’t want to pick it up yourself and “side-load” it through your living room window. Talk about the dark ages.

        Actually, Apple is building an infrastructure that does in fact have the potential to link you to any supplier in the world if the supplier cares to deliver through that pipeline.

        But for groceries and anything else I wish to consume for my personal life — either digital or tangible products — I can go anywhere as usual. Books, media, actual groceries through online shopping, whatever. In fact, most mobile shopping is done from iOS devices.

        As far as business through the provide infrastructure goes, either on the consumer or developer side, Apple is deciding to put some structure and rules in place to standardize the “experience”.

        It’s rather like McDonald’s. You can own a franchise restaurant of your own, in your own town. But there are corporate rules — you can’t just do anything you like with it…

        You can’t sell Pepsi, no matter how popular it is in your town. You sell Coke, like every other McDonald’s in the world, end of discussion. The inhabitants of your town are free to go to Fred’s roadside van to sate their Pepsi craving, but they better wipe the edge of the can; and if they get a burger there, they’re likely to get food poisoning along with it. Personally, I can live without that option.

        Now, whenever the range and depth of iOS apps usually comes up, you and charly seem very quick to downplay how important apps really are. Like, “who needs them?”, there are web apps already, and what’s the big deal about native apps anyway, and this is just a passing phase, etc. Big deal, or not a big deal, which is it?

        A lot of the time, it’s actually not a big deal to me. I’ve ordered my groceries online from Sainsbury’s or Tescos in UK, and Albert Heine in NL. So, what if the shop I want to use at any particular time doesn’t have an iOS app? Big deal, I use their website. Same thing you say when we talk about an app available on iOS but not on Android. Who really cares if you can go to six different establishments (app stores) like Fred’s roadside van if you don’t really like the same-old they are serving and don’t want to hand your credit card over the counter?

      • obarthelemy

        “if the certified supplier cares to deliver through that pipeline” and Apple lets them. And they pay their dues. And they’re not competing nor improving with/on Apple.

        If i own an home and want to mess up the living room, I darn well should be able to. And upgrade it too, and re-do it, and tear down that wall so I get 1 less bedroom but more living-room space. That’s the difference between owning and renting. With Apple, I can’t even change the drapes.

        I’m not downplaying apps, just saying there’s not that much money spent on them and Android is at par (except music creation), so they’re not a differentiating nor lock-in factor anymore.

      • Kizedek

        Oh, but you can. You just can’t expect the same service and support from those with the infrastructure when you do.

        And this upgradeability you keep mentioning? I asked about it earlier. You mean you can replace the battery in your phone?

      • obarthelemy

        I’m not sur we have the same definition of change. Can you even change an app’s icon ?

        You seem to assume Apple doesn’t collect as much info about their users as Google. Any proof of that, or even a declaration from Apple ?

        I don’t think I’ve mentioned upgradeability except in that last post. It could stand for, say, adding internal storage via SD, or a new launcher (that’s the home screen+alerts+quick settings, there are several better at some things than the default one, for example my 80 yo parents have one with huge buttons, and only touching, no sliding motion), or new widgets (that’s applets that display useful stuff, say, latest mail/RSS/FB/twitter/SMS/hangout… messages, …) right on the home screen. Or replacing the default browser, mail, calendar, SMS, phone, camera, video player, file manager… apps by something I prefer for some reason, if Only Chrome or Opera for the sync w/ my desktop.

        I’m ot downplaying apps, I’m saying both Andrord the OS and its app are broadly as good as iOS, sometimes better, sometimes worse, but in the end, interchangeable. As for the quality of the neighbourhood, tastes differ ^^

      • Kizedek

        Yes, tastes differ. People who choose to use Apple’s products do so because they find some value propositions in it that go way beyond their desire to tinker with everything. Not everyone wants a fixer-upper. Rather, they appreciate some of the qualitative differences, even where “broad” comparisons can be made (most houses, one would hope, provide a roof over your head, running water, and an inside loo; but that doesn’t make everything “interchangeable”, no matter how many times you restate it in different ways).

      • obarthelemy

        Indeed. A place where everything is the same and bolted to the floor doesn’t quite remind me of a condo ^^
        You’re trying to pigeon-hole Android as only for tinkerers. Stuff like widgets, pen input, dual-windowing, removable storage, large screen, remoting… goes way beyond that, and actually get a lot of jobs done much better.

      • stats

        If you can do more jobs, better, then why do all stats say that people value Android hardware and software less, and that they use their phones less generally?

      • charly

        Apple hardware is has a bias in gender, age and wealth. Wealth, young females use to communicate more than the average person

      • charly

        If you want to compare Apple to a home than i would suggest more a dwelling designed by a famous architect in the 30’s. Beautiful designed but you can’t change a thing and there is no place for a TV or microwave.

      • Kizedek

        It’s an analogy, so it’s limited. Furthermore, the analogy was introduced by Obart.

      • charly

        I never said that apps aren’t important but the two apps i want on my phone aren’t on the iphone. The good news for Apple is that apps will get less important in the future (except the payment apps)

        ps. Is the public transport app already published for IOS. Last time i checked it didn’t in NL

      • charly

        Porn apps has a moral level but Apple also banned Zwarte Piet apps and that is just plain evil as it is the same as Apple banning Christmas elf apps.

      • Will

        Google blacklists websites from THEIR severs. The website still exists and is free to market the link on social media.

      • Accent_Sweden

        Please provide a link to a site you can’t access on an Apple device but works on an Android device and I’ll check it. Until then, you are spouting nonsense.

      • Kizedek

        Those links are for Ed Bott articles about Apple’s iBooks authoring tool. He is pretty incensed about his claim that Apple tells you how you must distribute the output. He claims that only gratis works you produce may be distributed freely, while Apple claims the right to distribute all works intended to be sold. He’s wrong on that count.

        He also erroneously likens this to an imaginary scenario in which MS charged you 30% of your speaker’s fee if you use a PowerPoint presentation in your talk.

        So, Ed is wrong on at least two counts — the pillars of his argument.

        Furthermore, these articles are two years old and have been thoroughly debunked. But if you are really interested (and have limited ability to research it yourself), I can oblige with some detail.

        Obart, I’m surprised at you (well, not really). These are pretty outdated, fuddy, scare-mongering articles.You are simply keeping alive an non-issue to make a point that can’t be made.

      • obarthelemy

        from the EULA:

        (ii) if your Work is provided for a fee (including as part of any subscription-based product or service), you may only distribute the Work through Apple and such distribution is subject to the following limitations and conditions: (a) you will be required to enter into a separate written agreement with Apple (or an Apple affiliate or subsidiary) before any commercial distribution of your Work may take place; and (b) Apple may determine for any reason and in its sole discretion not to select your Work for distribution.

        So no,
        1- you can’t teach from your iBooks work (that’s “part of a paid service” unless classes are free),
        2- you can’t export it to ePub (it’s not the format that’s the issue, but the tool used to create the content), and
        3- anyway export to epub is not supported (“iBA generates Epub (sort of): save as .ibooks, rename to .epub (**won’t work with complex layouts, cover will be lost**).” Even if that workaround produces a usable EPUB file, however, the license agreement would seem to explicitly prohibit using the resulting file for commercial purposes outside Apple’s store.”)

      • Kizedek
      • obarthelemy

        Indeed, I missed the amended EULA. It is less horrendous, but still does assert rights to content you produce using their tool (iBooks Author only exports to text and PDF aside from .iBooks, so basically Apple assert control over all the intreractivity). It can be understandable and is within their right, but it is still the only such case I can think of.
        The EULA still is: “If you want to charge a fee for a work that includes files in the .ibooks format generated using iBooks Author, you may only sell or distribute such work through Apple, and such distribution will be subject to a separate agreement with Apple.” Equivalent to MS taking sole distribution rights for apps created in Visual Studio, etc, etc.
        To me, that’s on the wrong side of ethical.

      • rattyuk

        Ed Bott, apart from being an opinionated journalist, is also a publisher. His articles were entirely predicated on the fact that Apple provided an excellent publishing tool, which he couldn’t use it for his benefit.

      • obarthelemy

        Indeed. I’m just not aware of other content tools that claim rights to the content created. And the topic is ethics.

      • Kizedek

        You’re not? That’s how many systems work. How about Cafe Press and similar product platforms that offer fullfillment and storefronts for you? You create designs, then upload them and apply them to products using their tools. They take a cut of all sales — you can’t sell those products outside their store.

      • obarthelemy

        Cafe Press is more of a manufacturer than a content tool, so yep, you’ve got to buy the stuff they make for you from them… And I didn’t see anything is their Terms and conds that forbids you from using another source at the same time ?

      • stefnagel


      • Fran_Kostella

        “And speaking of ethical risks, don’t forget” …that here’s a pet dead horse I like to drag around and beat on any occasion! Hilarious!

        Stefnagel’s point seems to be that Google is configured to fail ethically, and your defense is that somebody somewhere did something bad? I think we all can find fault with any organization that we choose to focus on, but the concern here is with Google. I’d like to read your direct defense of the ethical concerns with Google without blaming others.

      • obarthelemy

        My point is: the future can always change. If we look to the past and present, Google are doing rather better than the hero of these parts, where extrapolating is all the rage on other topics…

      • The big difference you continue to ignore is that Apple is not beholden to the whims of two or three individuals, but Google is. If a majority of Apple’s shareholders were convinced that exerting such control on the devices or services it provides was excessive, unethical, or reprehensible, they can simply vote out the board and/or management and change such policies. Google, instead, can and will do whatever Page, Brin, and Schmidt want, other shareholders be damned.

      • charly

        Shareholders don’t care about ethics, they care about profits and stopping people from visiting a site or using an app isn’t highly unethical, just a little bit unethical.

      • Again, you miss the point.

      • Will

        No he didn’t. You are assuming that a group of investors can reverse any evil act such as controlling what website you can go to. While technically possible, no shareholder will care about it. And “technically” that works the same for Google, after all it is a public company.

        Not to mention the fact that there are some high profile persons I won’t mention in Apple that clearly have a lot of influence, just like Google has.

      • Will, sorry to say you also missed the point, and seem uninformed about Google’s shareholders voting structure.

        If Tim Cook makes any obvious and flagrant mistake (let’s say he decides to stop developing iOS and license BB10 to put a radical example) and sales tank, he’d be fired. Or if the board backs his decision, they’d get kicked out. No question about it, not just “technically possible”, it’s practically guaranteed to happen. Or if Apple decides to start adopting puppies. Or ban kitten images on Apple devices.

        Google, on the other hand, has no recourse. The three guys control 63% of the votes and no matter how misguided their plans might be, they’d still be able to implement them or whatever else they wish. If they decide to pay themselves $1b bonuses each, they can, and no one can do anything to prevent it. That’s technically, practically, and truthfully a reality that you seem to ignore about Google.

      • Will

        Oh wow, three guys have 64% of shares?! I stand corrected.

        Even Bill Gates had less than than 10% shares.

      • They don’t own the shares, just the voting power. All class B shares represent only 18% of the equity, but 69% of the votes. That’s the problem, they don’t have their capital tied to it, no risk, no skin in the game, yet they get to control it as if they did. I’d have no problem if they actually owned 65% of the equity and managed it to their whims, just like any private company.

    • poke

      During the Google book scanning snafu, I remember reading a quote (which I unfortunately can’t find) to the effect that Google is a big company that thinks of itself as a small non-profit, and that’s what makes it dangerous. It doesn’t care about the kind of assurances we want from corporations, because its own self-image is so at odds with reality.

  • jbelkin

    Well, I think it’s more cluelessness than anything else from idiotic investors. facts are the facts. Google is a one-trick pony company that is brilliant at monetizing search but has NEVER created a large scale second business unit. Meanwhile, Apple has created 6 MULTI-BILLION business units just in the past 10 years – what other company in the history of corporations has done that? just the ipad division has gone from ZERO to $40 BILLION – almost as large as Google in 4 YEARS!4 YEARS! the iphone division makes more money than ALL OF MICROSOFT in 7 years! MS is lead by a CEO that missed a competitor making $70 BILLION a year from ONE PRODUCT. Meanwhile, Google spent $12 BILLION buying Moto which is losing marketshare! They just spent $3 BILLION on a company Apple valued at zero. All of Google’s consumer ventures have failed – GoogleTV, Nexus and now Moto. Microsoft makes more money on Android than Google. Apple has no real competition because all their competitors run the old business model of 300 product VP’s while at Apple, they are focused on a few product lines that ALL COMPLEMENT and help sell the ecosystem. mac buyers buy ipads, iphones and use itunes. itunes users start buying iphones. iphones users start buying ipads, etc, etc … Google glasses are the new segway – useful if your company pays you to use it but no consumer who is not a creeper is going to buy one. Read every review – at some point, it all states, UI confuing, not comfortable and not well thought out. And Google could care less about customer service. Even if you spend $1,500 on glasses, no phone number to call – email them or use the forum. Investors should be wary – Google has now wasted $15 BILLION in the past 4 years trying to be Apple but they are not any closer. Apple is on 64bit IOS – will Google keep spending money on an OS that only costs them more money? Is Google the new Xerox PARC? Xerox was considered untouchable with xeroxgraphy but the world passed them by – is Google subject to the same fate? Shareholders have to wonder where is Google’s second business unit – any business unit that generates a profit? All the same while, Apple grows EVERY business with 40% margins. And if they nail the TV thing?

    BTW, the last large Apple company purchase – NEXT with its CEO Steve Jobs. That $400 million dollar might make Apple a TRILLION dollars. That is the difference between Apple and the other corporations like Google/MS/Xerox/Kodak.

    • Padova44

      Excellent. Let us thus have an acronym, Google is an OTP, one-trick pony.

  • obarthelemy

    89% of Apple’s revenue are from hardware sales, 52% from the sole iPhone.

    Hardware revenues from sales to consumers are more flighty than revenues from service sales to corps. On top of that, Google’s products are free to the user, and have a track record of being superior where it counts.

    The iPhone seems especially vulnerable, with the competition getting better, all-important subsidies being threatened, and the market growing mainly at the bottom where the iPhone is not present.

    I’m sure being seen as invulnerable can be somehow contorted into being bad. Having clearly identified vulnerabilities is not better though, to most people that is.

    • citation

      I would love citations for the half dozen assertions in here.

    • ptmmac

      Perhaps there is more in common between Apple and Google than meets the eye. Apple sells hardware, but the value added has always come from the software and the ecosystem. Many companies have copied and even improved the iPhone hardware. I have not seen any successful copy of the software and ecosystem. Google has tried, but the Android bazaar has been particularly hard to tame and direct. I am not even sure Google wants to “win” the ecosystem battle. They still make more money from iPhones than from Android phones.

      The software and ecosystem that Apple has created do not get much credit in the balance sheet, but users seem to be drawn to simplicity, serenity, and security rather than techno stats or widgets. If I have to depend on this thing to keep me connected, why would I want anything more than those 3 “S”‘s? Perhaps the Apple “magical marketing” is a sideshow to keep everyone from recognizing what Apple is doing. They are making difficult technical problems simple to solve. That is not in itself easy, but it is simple to describe.

    • The flip side (the Apple is a system side) is 11% of that revenue is coming from content (software and media) that is done so well it “locks-in” users to keep the other 89% growing. Once you get an iPhone, you try an Apple TV. Then you see the need for and Airport Express. Then, you might try a Mac Air and find iTunes is actually great on a Mac (it never felt “right” under Windows).

      • Kizedek

        Or, is the “system” that Horace is talking about more about the Apple DNA and how it continues to produce hits to the degree that it can no longer be considered lucky and coincidental?

  • Ian Ollmann

    Clever. I understand the Apple-as-system reference, but maybe an article should be devoted to Google personhood. This classification seems less clear.

    It seems unlikely that the founders are the technical genius behind the many research avenues undertaken by Google today. Perhaps they are still the genius behind just those parts of Google that make money. I am curious why you think the founders are so important. Are they merely so because of share voting rights?

    • marcoselmalo

      There is an appearance that Page, Brin, and (less so) Schmidt are operating the company based on whimsy. The decision making is opaque, despite the seeming openness of Google and their willingness to talk up their activities.

      Of course, their control of the company makes this possible.

      • Ian Ollmann

        If share voting rights are the reason Google’s fragility can be reduced to the whim of just 3 people, it follows we must believe that these three 3 individuals are critical to Google’s continued success. That is, without them, the company must “surely fail”.*

        Do you believe that?

        If you don’t, then Google seems more like a robust investment, assuming the fundamentals look good. The company has such a good strategic moat, it apparently can be run profitably even by scientists! These three individuals are apparently not fundamental to its success at all, so it would be mistaken to reduce the company to these men.

        *Here I discount the possibility that they will on a whim sink the company. The fun ends if they do, so they won’t.

      • marcoselmalo

        The possibility that all three would die simultaneously seems rather low, although I don’t know their protocols for all three being in the same place at once. Still, I’m not sure how one can predict failure for the company if one or more of the leaders die.

        Regarding fundamentals: tell us, if you would, if Google’s fundamentals look good, and why you think so. Why do you think Google’s valuation is attractive to the investor?

        Regarding the strategic moat: possibly or possibly not. Some of their defensive moves have required further defensive moves to protect the original defensive move. This is getting costly for them.

        Look at your criteria and apply them to Microsoft. Would you argue that MS is currently succeeding?

      • Ian Ollmann

        I don’t understand Google, so I don’t invest in them.

        Mostly I’m trying to understand why Horace thinks the investment quality of Google can be reduced to three people. I suspect that Google investors are mostly buying the moat + profits, and not the management.

      • marcoselmalo

        Yeah, that the part of Google’s plan where they kick Microsoft up and down the street and sideways, that part I understand.

        MS earnings growth is low, but it has (for the moment) steady income.

        I don’t own any Google or MS. My “participation” in the stock market is through a family fund, and we’re long on Apple. However, I have less and less trust in the stock market for investment. The question is, if you cash out, where do you put your money?

      • rational2

        The Fed is very focused on making the stock market the only option.

        I’m lot more worried about the country, even the world, getting screwed by a few academic central bankers than by three top shareholders screwing up Google.

      • marcoselmalo

        Very good points, especially wrt the “priority of worry”.

      • Shawn Dehkhodaei

        Microsoft is NOT being disrupted in Office suites … and not really any disruption on the “desktop” OS … just mobile (though that’s a significant market). Microsoft’s main problem is the shift in mindshare … from corporate to consumer …. they were never a consumer-friendly company, and though they’ve tried desperately, they still aren’t, and can never be; it’s not in their DNA. They will slowly wither away.

        I’m not sure if Horace is suggesting that GOOG is a bad investment; just that they’re invulnerable in the public eye. GOOG might be a good investment … who knows? Wall street is filled with a lot of strange people. GOOG is currently trading at P/E ratio of 33 and AAPL at 13 …. so Wall Street “thinks” that GOOG has 2.5 the potential of AAPL to return money to investors. You’re welcome to play their crazy game …. I gave up a long time ago (though I always made money on AAPL).

      • You just described disruption.

      • Fran_Kostella

        The sharing of power works as long as there is a degree of harmony. If one of the founders turned strongly against the other two primary owners (I don’t see that happening given their history), or passed control to someone not interested in keeping Google as is, then things might get shaky. Stranger things have happened, but this seems more likely than the three of them walking offstage at the same time.

      • Tim F.

        3 people share the majority of voting power, they never shared the responsibility of that power evenly. Only 1 of the 3 men could lead Google without one of the other two.

    • charly

      Because the founders aren’t in it for the money as they each own millions of dollars outside their shares of Google. They are in it more for the continuation of Google which means they will look more at the long-term than the short-term or more at a lasting success of Google than what wise as seen from a monetary viewpoint.

      • Walt French

        “They are in it more for the continuation of Google…”

        Maybe you could show evidence in either product decisions or statements that are subject to official lie-detector tests, e.g., statements to investors.

        My personal summary is that Google learned this PageRank thing, and alternative smart ways of tyng together disparate parts of the internet, extremely well—nobody has surpassed them in many aspects of this “index the world’s information” thing. (Facebook, Twitter and other sites have built very interesting, useful and potentially economically valuable graphs, too, despite Google having had the critical mass and capability.

        It’s rather obvious that Google wouldn’t have much luck asking you to pay 5¢ to access a page such as this one, because the people who care to come here often would just pay directly. So they use ads on their links. I think they want to continue, and grow, the value of those ad-financed links. That’s more than subtly different from “continuation of Google”—it’sthe basic business objective of any company.

        But most of their activities suggest they know nothing about the future of ads. Motorola is a well-publicized disaster (especially from the perspective of either their continuation or ad revenues) and I believe that Nest is even more so—productization of a concept that is far from ready for prime time and is extremely unlikely to have much economic benefit to almost anybody in the next ten years. Nest may have some first-class engineers and a bunch of neat ideas, but it’s hard to see why the product is only 3 years or less away from liftoff. (Yes, initial sales of the iPhone took a while, and managed to do OK.)

      • obarthelemy

        I believe for now Google are more interested in the **quantity** of ads than in their quality… Quantity can be grown be expanding the market: get more people online more often for longer, and expanding marketshare vs old media. I’m sure there’ll be a bit of quality somewhere, but mostly, quantity. Hence their energetic drive to get everyone connected at all times.

        Motorola doesn’t have much to do with advertising. It’s about getting patents, and being able to make product. I wouldn’t judge Moto too harshly yet, the Moto G is setting a new standard for branded+affordable phones, the Moto X is probably 2013’s most innovative phone. Ditto with Nest: home automation has been in the “sounds nice, not mainstream” category for years now. Maybe Google will be the ones to mainstream it, as they did with Linux.

        All of those add up to a strong upside: ever more adds, better targeted/delivered hence more expensive, and the possibility of brand new markets that losely tie into the ad machine…

      • charly

        Google is a big energy user so any way to get prices down is good for them (and depressing prices by less consumption by other people is doable)

        You also need a smartphone, especially one with location tracking on, for the smart home to work well.

        If you have a smart home than your smartphone needs to play nice with it which is useful to force MS and Apple to play nice with Android

      • Tim F.

        Why would I buy a thermostat that sells on working with the iPhone if it no longer worked with my iOS devices? Who has to play nice with who?

      • charly

        Thermostats have lifecycles of decades. Iphones made in 20214 need to be compatible with the thermostat you bought now. Google makes bought so they will pay more attention that the 2024 Android phone will work with your 2014 thermostat

      • “Motorola doesn’t have much to do with advertising.”

        That was Walt’s point. Google is the worlds largest advertising company and can’t create an add to sell their own product. There is irony in that.

      • obarthelemy

        I don’t think google are in the ad creation business ?

      • You have never searched for anything at Google dot com?

        Of course Google plays a significant part in distributing and formatting millions do ads per day.

      • Tim F.

        Quality is not something you just focus on later and improve. If you spend a decade squeezing every penny to improve quantity, producing a highly efficient system of lowest cost, highest reach, no matter the quality, you don’t just turn the knob on quality later on. It doesn’t happen.

        What you say about Motorola is laughable.

      • charly

        Internal they focus on quality but external they focus on more room for ads as they can’t influence quality exterrnally

      • Walt French

        @obarthelemey wrote, “Motorola doesn’t have much to do with advertising.”

        Yup, you got that right. I would add that it doesn’t seem to have much to do with anything favorable to Google, such as profits, or a beachhead for a new line of phones that the partners in OHA wouldn’t have produced.

        It’s hard to see how Google has delivered one more ad, or collected any new profit, from having Motorola out competing in the phone space. (There may be some people who ranked a Moto phone ahead of an iPhone, which in turn was ahead of all other Androids, but you could probably count all those people on the thumbs of your left foot.)

        Google has indeed gotten some patent licensing revenues from Motorola, but the only rates I’ve seen so far are absolutely trivial — in the region of 10¢ per phone, IIRC. No court decision has yet been made in favor of Google’s non-FRAND patents, that would slow down Apple or Microsoft in a counter-offensive sense.

        Motorola was losing market share and money when Google was arm-twisted (Horace has said “extorted,” I believe, which stronger term it may have been), and then the division was downsized and shuffled to the point where the only non-generic feature they could produce was the newly-discounted customized cases. The brave talk about a new intimacy with your phone has taken the world by…a light, morning mist.

        So: no incremental ad sales; no incremental hardware profits or a team that knows anything about desirable wide-market or even niche features; no patent mojo. $9 billion of net cash expenditures for approximately no return: an epic disaster.

      • obarthelemy

        I mostly agree, especially on $9b being too much now that the IP seems mostly irrelevant. 2 things though
        1- it’s still early. The first line of Google-era phones came out this year. We should probably give it 1-2 extra iterations to see how it pans out sales-wise.
        2- both the Moto X and the Moto G are outstanding in some ways. Capabilites/Price for the G, Voice commands and situational awareness for the X, and price. Reviews have been mostly very positive:
        Review: Google’s $179 Moto G puts every single cheap Android phone to shame ( )
        Greater than the sum of its specs: Google’s Moto X reviewed ( )
        Google are playing a very long game.

      • I think it is pretty clear Larry and Brin are NOT in it for the money. People that successful in their endeavors seldom are. Those two are in it for the actual work and the money is a pure side effect of their actions.

      • Tim F.

        These two people are the first I think of when its anything extraordinarily expensive and exclusive. Yes, they don’t display the more classic excesses of a Larry Ellison. But they have a hangar full of airplanes that put Jay Leno’s garage to shame. They more or less have their own airfield on a FEDERAL AIRBASE! They fund pet projects to go to space and trace their own genes. And they enjoy the best of anything they want. (There’s nothing wrong with that.)

        The nonprofitable portions of Google (a very considerable portion) are essentially the toys in their play chest.

        Yes, highly successful people are motivated by more than personal wealth. But ultimately personal wealth can effect the individual personality. Individual personalities can be necessary AND highly fallible. It may be that Google is always perceived as “meh” whenever it’s not free-with-ads or absolutely the best.

        None of the Google founders impress me as particularly in tune with the average consumer. It may be their geekiness, but their personal wealth and massive control over Google certainly can’t help. Some of what Larry and Sergei want of the world the rest of the world wants… or doesn’t know it wants but will like it anyway. Some of what they personally want… the rest of the world doesn’t care for or see Google as doing particularly well at it.

      • None of that is any indication that Page and Brin are motivated first by money.

      • JohnDoey

        They’re not in it for the money because they became billionaires in the Google IPO. After that, their reputations are much more important than an additional billion dollars.

      • JohnDoey

        They didn’t buy Nest to get the thermostat and the smoke detector. They bought Nest to get the Nest team and the *next* 10 products they will make. Nest is now Google’s consumer products team. The Nest team might already be working on a phone or a tablet.

        Lenovo offered to buy the Motorola phone business from Google within hours of Google buying the entire of Motorola. Google didn’t sell the Motorola phone business until 18 months later, after they had already bought Nest to replace it.

        The thing is, if you asked me right now to choose between a phone made by Motorola or a phone made by Nest, I would choose the Nest. Motorola made old-style phones. Nest was founded by Tony Fadell, who was one of the top people on the iPod and iPhone development teams. The Nest devices are also essentially smartphones inside.

        > extremely unlikely to have much economic
        > benefit to almost anybody in the next ten years.

        The Nest thermostat pays for itself within months. And Google essentially paid nothing for the Nest team because they just swapped them for the failed Motorola team. They got a better team for nothing.

      • Walt French

        The Nest can’t have economic impact until somebody buys it, which was the probable reason why Nest decided to sell out to Google instead of seeking their next round. (They had MORE than enough buzz but the demo of homeowners tilts away from techies and VCs look at things like that.)

        I have no trouble with either home automation (which wasn’t hard to set up) or Internet-enabled devices such as thermostats (which was an expensive PITA). But the value proposition is based on features (pre-warm after an evening out; security/convenience of stairs & porch lights) and save NOTHING vs stingy manual control.

        CO detectors?

      • JeremyWM

        The Nest thermostat was designed by Bould Design, not by the internal team. It was outsourced to a very respected industrial design studio. I find it strange that Google spent 3B for a company that didn’t even design their flagship product. Lol.

    • From the Google prospectus: Google has “a dual class structure that is biased toward stability and independence and that requires investors to bet on the team, especially Sergey and me.”
      This arrangement gives Google’s trio 64% of the voting power over the company’s shares..
      “J. Edward Ketz, an accounting professor at Pennsylvania State University, criticized the “peculiar” move. “Benevolent dictators might lead to efficient government, but once they lose some of the benevolence, things can turn nasty,” he said.

      • Ian Ollmann

        In the past, you’ve expressed skepticism that corporate leaders are really as responsible for their company’s demise as the masses believe. For example, I recall many articles asking why would so many companies fail concurrently in the phone industry.

        It seems the argument is reversed now.

        Did that happen because you feel the situation is different, or were you just saying before that in the disruption case in particular, we should excuse the leaders of Nokia, RIM, etc.

      • I hope not to make a claim that Google is entirely driven by persons (and not by a mechanism). I only suggest that there is much more risk of that happening than might first appear. In real life the role and power of management varies. In complex systems and in industries being disrupted management’s impact is small, in simple systems (e.g. startups) and industries which are emergent (limited competition) their role is huge.
        What I want to draw attention to is the possibility of Google being perceived as being in a different spot on the spectrum than where it really is. Google management operates a far simpler “system” if they don’t have to worry about financial constraints. They also don’t have to worry about competition. So that makes the importance of who they are far greater. In contrast, Steve Jobs operated under a larger set of constraints than what is normally discussed. Having power over people is not necessarily liberating.


  • sjinsjca

    “I suspect the absence of scrutiny comes from Google being seen as an analogy of the Internet itself….”

    Horace is not incorrect, IMHO, but I think he misses something: Personally, I suspect the absence of scrutiny comes from society’s latter-day entitlement syndrome, its expectation-of and devotion-to to Free Stuff. For example, an elderly blogger friend who’s as right-wing as they come goes absolutely doe-eyed when it comes to all things Google, specifically because of all the free goodies. He just doesn’t see the irony in being a constant advocate of wrenching every social spigot shut and a ringing critic of the surveillance state while blogging constantly about the fixed-income-retiree’s boon of Free Google Goodies, Free Android, Free ChromeOS, etc.

    To my eye, Google somehow accrues to itself the misplaced goodwill that the soft-headed routinely grant to “nonprofit” organizations. All you have to do is say the word “nonprofit” and your enterprise–no matter how venal and greedy and wasteful and duplicitous–is granted saintly status. And Google, by giving away its stuff “for free,” wraps itself in the same cloak.

    • There ain’t no such thing as a free lunch.

      • “I suspect the absence of scrutiny comes from Google being seen as an analogy of the Internet itself.” – Definitely agree with that.

        Though the “free” perception has some merit too.

      • JohnDoey

        But there is such a thing as an ad-supported lunch.

        If I open a restaurant right next to yours, clone your menu, and replace the $ prices with “watch x minutes of ads while you eat,” many people will consider that a free lunch and I’ll get a lot of your customers.

        And if I am a giant advertising corporation, the capital involved in cloning your restaurant and putting you out of business is negligible.

    • JohnDoey

      I agree about the Free Stuff factor with Google. The way you can see this is the way that consumers like Google and producers and authors and publishers hate them. Consumers say, “Google gives me free email and apps, so I love them,” and publishers say, “Google published my entire book online and sold ads off it, so I hate them.”

  • spikesagal

    I like the phrase “be be seen”. I think it means “observed on or by BBC”.

  • Bob Warfield

    Apple’s not invulnerable. It’s almost an accidental empire. Here’s what really happened to put Apple where it is today:

    • JohnDoey

      > invulnerable

      He didn’t say that they were invulnerable.

      > accidental

      Everything looks accidental in retrospect. You could be married to your soulmate for 20 years now, but you met him or her only because you were both accidentally called for the same jury duty. What actually matters is that once you met you fell in love and developed a 20 years relationship. The accident that caused you to meet is just not that important.

      > How Moore’s Law Put Apple in the Driver’s Seat

      Moore’s Law applies to all technology companies equally. It is not a competitive factor at all. Apple did not have any advantage from it. Moore’s Law is also 50 years old and predates Apple’s founding by over 10 years.

      Saying that Apple is more successful than some other company right now

      because of Moore’s Law is like saying that Apple is more successful than some other company right now because of evolution. Evolution also applies equally to all companies. Apple did not have any advantage.

      What I think you are missing is this:

      * Microsoft *chose* to weld their operating system software and applications to the Intel CPU architecture from 1982 through today, and so Microsoft lives and dies on the fortunes of Intel CPU architecture — everybody always knew this was a very risky move by Microsoft, but they did it anyway because they looked at the world as a Wintel monopoly that can’t ever sink, just like Titanic

      * Intel *chose* to ignore performance-per-watt as a design metric in the 1990’s and early 2000’s, choosing to make bigger, hotter, more power-hungry chips even though ARM had a giant lead on them in performance-per-watt, even though computers had been running on batteries since the 1980’s, even though Newton and other PDA’s brought computing to ARM in 1992, because Intel knew that Microsoft’s MS-DOS and Windows were welded to Intel architecture and couldn’t adopt ARM — in other words, Intel looked at the world as a Wintel monopoly that can’t ever sink, just like the Titanic

      * Apple *chose* to make their operating system software and applications architecture-independent throughout their entire history so that they are not tied to the fortunes or misfortunes of one particular processor — the Mac/NeXT ran on 68k, then moved to PowerPC, then moved to Intel Core, and now is often rumored to be moving to ARM; Apple co-developed the mobile ARM architecture in the early 1990’s for the Newton, then used ARM again in iPod in 2001, and iPhone in 2007 and iPad in 2010

      • during the first decade of the 21st century, performance-per-watt eclipsed raw computing power as the most important metric in CPU’s — mainly because of Wi-Fi, which enabled Apple to create the first truly wireless computer in 1999 (Apple iBook) and then add Wi-Fi across its entire computing line by 2001, and Intel manufacturers followed in 2003 or so — adding batteries to computers in the 1980’s only freed you from the AC power cord, but not the Ethernet cable — Wi-Fi is the other shoe dropping, freeing you from the Ethernet as well and making you truly wireless and truly battery-dependent

      * because of Intel’s own *choice* to ignore performance-per-watt for over 10 years, Intel was not ready for performance-per-watt when it came

      * Microsoft was also not ready for performance-per-watt when it came because of Microsoft’s own *choice* to remain welded to Intel

      * Apple was ready for performance-per-watt when it came because Apple had been working on that since 1992 or even earlier, and because of Apple’s own *choice* to remain processor independent, a choice that enabled them to jump OS X from PowerPC to Intel in 2006 when that was necessary to save Apple and the Mac, and to again jump OS X over to ARM in 2007 when that was necessary to grow Apple

      So it is not Moore’s Law or some accident that put Apple in the driver’s seat. Apple put themselves in the driver’s seat of computing by doing the work, by making the right choices again and again for decades. They chose to be nimble and adaptable to the state of computing, in the same way a ship has to be nimble and adaptable to the state of the ocean and weather and icebergs around it. Microsoft and Intel chose to be the Titanic: not nimble, not adaptable, sure of their own invulnerability, and at the mercy of a sudden iceberg.

      In short, Apple simply out-competed their competitors. Because Apple was nimble, Wintel did not have 20 years to gradually adapt to Wi-Fi and truly wireless, battery-powered computing.

  • For the 2013 annual meeting, the proxy states:

    “On the Record Date, we had 331,710,124 shares of common stock issued and outstanding, consisting of 270,987,899 shares of Class A common stock and 60,722,225 shares of Class B common stock.”
    “Each holder of shares of Class A common stock is entitled to one vote for each share of Class A common stock held as of the Record Date, and each holder of shares of Class B common stock is entitled to 10 votes for each share of Class B common stock held as of the Record Date.”

    (p. 3)

    That’s 270,987,899 and 607,222,250 votes totaling 878,210,149 votes. On p. 22 we find that, of these votes, Mr. Page controls 249,095,890 (28.4%), Mr. Brin controls 243,636,780 (27.7%), Mr. Schmidt controls 66,323,116 (7.6%), and the remaining directors and executive officers as a group control an additional 12,917,879 (1.5%) votes, for a total of 571,973,665 (65.1%) under all insiders as a group.

    Given this representation by them alone, it’s not a surprise that the voting results always show overwhelming support for the board-recommended opinion in all proxy items put forth. However when you exclude the insiders votes, you get a very different impression of general shareholder support for this board and management. After excluding the class A shares held by the 13 individual insiders you’re left with 270,146,144 non-insider class A shares (30.8% of the votes) in the hands of the great majority of the at-risk capital stockholders (as compared to a very select number of class B holders and 13 insiders) who can never, ever even dream of getting anything passed that might attempt to rebalance their… asymmetric (ha) voting power condition. Not that they won’t try, I suppose in order to make a symbolic statement and have it on the record.

    In particular, consider proposal 4 from the 2013 proxy which precisely asked, quite candidly, for class B share owners to simply give up their rights for 10 votes and make every share count equally regardless of class “for the common good of all shareholders,” and complaints that “our company takes our public shareholder money but does not let us have an equal voice in our company’s management. Without a voice, shareholders cannot hold management accountable” (see p. 53). The board recommendation of course was to vote against this proposal.

    Well, the results show that the total votes ‘against’ it were 551,282,594. That is nearly 57 million less votes than what the insiders and/or class B holders control! How is that possible? Perhaps some abstainers on moral principle, or apathy? Only about a million abstentions, and 26m broker non-votes, and it seems nearly 119m votes didn’t show up, so who knows. I’d say the majority of these non-present just don’t care because the whole proxy-participation-democracy thing in Google becomes a farce given the voting structure.

    The votes ‘for’ this proposition were 180,758,753, more than 89m less than all non-insider class A shares (even more apathy in this case). However, if we assume that all 551m ‘against’ are class B voting superpowers, and were to “equalize” them by dividing by 10 resulting in 55 million ‘against’ and nearly 181m ‘for’ the proposition, it would’ve passed with 76.6% of the hypothetically “fairly rebalanced” voting power of shares present in person or by proxy, or better than 3:1 easily exceeding what’s called supermajority requirement in some circles, enough support to make constitutional amendments (or adopt new ones), change the articles of incorporation, approve mergers, dissolution, and stuff like that (not saying this is Google’s case, as I don’t know what articles of incorporation might require a supermajority for, I’m just highlighting the exceptional nature of the powers of a supermajority in general). But no, all this supposed supermajority only gets counted as 24.7% of the present votes. Even a 90% super-duper majority would lose 47-53% against this special class with 10x superpowers.

    That proposition would have passed with flying colors in any normal “public company” but not here, not in Google. The two visionary genius-boys will always get their way, no matter what.

  • LarryCohen2014

    Google is not benevolent, they’re evil and getting more evil every day. They’re a monopolist who is accumulating data on all of us and is even more dangerous than the NЅА since Google is not constrained by Constitution.

    • JohnDoey

      The perception of benevolence comes from consumers who see Google as a friend who gives them free products. The perception of evilness comes from the producers who created the original versions of the products that Google simply cloned and put ads on.

  • Jose Ali Vivas

    Very interesting theoretical topic. I do not try to explain the “Fragility” in Taleb terms. In these case the must interesting thing is just the footnote. Apple’s key talent will be going away some day. We knew Apple without Jobs. In just wondering why Apple [ does not create a kind of Apple Ventures. Why? Just for the capture the best of their “departing talent” to integrate [again] the their own ecosystem, as Google Venture did. Now Google has the best of the Apple’s talent: Andy Rubin [Android] , Dr. Bertrand Serlet, OSX VP now with UpThere, Tony Fadell, Nest [iPod, iPhone] for name few huge talents. Google Ventures, Motorola [ thanks Dr. Regina Dugan, former DARPA’s Director] for sure is making a very big difference in the mid time.

    • berult

      Google is desperately chasing Apple, the ‘Steve Jobs’ Edition. They trip over Apple paraphernalia while passing by the very essence of disruptive success; having the free-wheeling, adventurous, non predatory trait of a space-time traveler.

      The people you list either collate with Planet Earth or revert to Planet Jobs. They chose to travel through a search-engine to the land of subliminal misdemeanor and declarative wealth-fare. Apple starship command, newly perfused with Prada blood type and daredevil moxie, is heading full art-engine ahead to know-where: Planet Focus…at the very core of the soul’ar system.

      As I scribbled once, I’m all so bullish on Angela Ahrendts’ character traits and peculiar areas of expertise. She’s keystone to the arctangent of Apple’s long-game. Its curved-in, introspective trajectory.

    • JohnDoey

      Retaining superstar talent is hard for everyone, including Google. Typically, the people who are really hard to retain are the people whose startups you bought, because they quit and go make another startup. Tony Fadell helped launch iPod and then helped launch iPhone and then he helped launch Nest and who knows what is next for him? So it’s not a great argument to say Apple has a talent retention problem because Steve Jobs passed away and Google does not have a talent retention problem because they bought some startups. You retain talent mainly by having projects and products that the talent wants to work on. Secondarily, it is who you’re working with, but I don’t see anybody on your list who trumps Jony Ive or Phil Schiller or Tim Cook.

      It’s also not an anti-Apple argument to say that so many successful startups are driven by people who did the best work of their lives at Apple. That is a pro-Apple argument. That makes young people want to go work at Apple for 10 years and then create a successful startup based on what they learned there.

      Apple does essentially have Apple Ventures — it’s the part of Apple that just bought $14 billion worth of Apple. Apple chose to invest in the people who are already at Apple rather than invest in people who are not already at Apple.

      • Jose Ali Vivas

        Retaining talent is an “infinite loop”: The brilliant people, go outside, to his [or her] new StartUp, then the company [Google,] bought it, then, he goes outside and go again to a new StartUp, the the Company bought this Startup again and so on. This model is reshaping the tech world, I guess. In my case, my motto at Terabrain was ” Emerging Smart Business” with this idea in mind as a business model few years ago. I am agree: Apple is now [to retain their talent] with these huge investment, but is not a secret, Apple behave as a StartUp [ Steve Jobs dixit ] and a very laser focus way. My concern is because they lost a huge key players [Andy, Tony,] and for that reason I mentioned it. For example in the case of Microsoft only Nathan Myrvold is the must notorius one.

  • thesafesurfer

    I appreciate the free chuckle this morning from Asymco. I don’t own anything Apple in my home or business and the premise of this article is “is Apple invulnerable?.” Now that is funny.

    • funny

      It’s funny that you didn’t read the article, but left a comment anyway, yes.

      • thesafesurfer

        It’s funny that you read the article and didn’t get the author’s basic premise.

      • funny

        It would seem that nobody else agrees with your reading of the piece. Perhaps you’re the only one who understood it, or perhaps you didn’t understand it at all.

      • thesafesurfer

        Do you realize how stupid you look claiming to speak for “everyone.” Of course not or you wouldn’t have made the claim.

      • funny

        Perhaps you could quote from the article the part you think says what you assert.

      • thesafesurfer

        Just read the part between “on” and “three).”

      • Walt French

        You should be aware that you just crossed a line that’ll trash your reputation. Try to find, analyze and cite facts, not empty assertions and attacks, as the site rules (no, not guidelines) say.

      • thesafesurfer

        Walt, if you can’t understand that this article is a direct attack on google and a thinly veiled praise of Apple then you have only yourself to blame.

      • Walt French

        I think I find your ad hom attacks less distracting than your red herrings. To be clear: you’re not proving anything except your inability to engage in constructive debate.

      • thesafesurfer

        Look in the mirror Walt.

      • JohnDoey

        That is not what you said. You said the author concluded that Apple was invulnerable. That is very different from the author contrasting Google’s perceived invulnerability in spite of operating in one market with Apple’s perceived vulnerability while operating in multiple markets and asking why that is.

      • thesafesurfer

        If you can’t figure out that the article shows how weak Google is and that this makes Apple invulnerable in the author’s mind then I guess I should use crayons to post so you could connect better.

      • Jacob Williams

        I don’t expect Horace to be critical of Apple. You just need to accept that we’re on the The Compliment Path and you’ll enjoy this experience a lot more.

  • Dusty Johnson

    Bill Gates has already proved that Apple can be beat. After Windows buys google he will do it again.

    • Walt French

      Apple’s learned a thing or two about the sweet spot in between bleeding edge and dull in the last years, while Microsoft seems to have forgotten more about meeting users’ needs. Google is, to date, a one-trick pony insofar as an actual business goes, with recent announcements suggesting they want to be even MORE disconnected from products/services that might actually generate more than incremental revenues from the same sources.

      Not that Larry & Sergey, the controlling shareholders, would agree to be bought, nor try to buy Microsoft.

      • charly

        You don’t want Microsoft to have Monopolistic power over you but you can life with it. With Apple it is a no, you can’t life with it. That is why Apple will be a has-been in the smartphone business in a few years time

        Google is at least a six trick pony. Search, General Advertising, Youtube, Gmail, Chrome, Android. each of those is at least top 3 (in the Western World) and a billion dollar business

      • Walt French

        All the revenues that pay Google’s talented engineers come from a more-or-less single source, advertising.

        If Google decided to go into the bus stop ad market and got a bunch of revenue that way, I don’t think anybody would see it in the least transformative. But you & others think that ads for videos—which have been around for nearly a century—are somehow a Big Deal.

      • charly

        That is saying that all the revenue from Apple comes from a single source, sales. It is true but also besides the point as they do have some very distinct markets.

        Adds between videos is nothing new but youtube is a big operation and with the price of bandwidth at the moment likely profitable.

        Google could do the standard sf personalized busstop adds. The technology is ready (Listen to the wifi signal of smartphones as a way to identify what add needs to be shown on the relatively cheap 50″ lcd screen)

      • JohnDoey

        No, it is not beside the point at all that Apple makes their profits from the sales of products and services and Google makes their profits from the sales of advertising. That is the single-biggest difference between the 2 companies and defines the 2 companies and dictates how they treat their customers and their partners. Apple’s primary customer is the end user of the products and services that Apple creates, and Apple creates those products for that end user. Google’s primary customer is advertisers, and Google creates their products and services to serve the needs of those advertisers. That is why Apple tries to keep customer data private (to please the customer so that the customer continues to buy future products and services) and Google tries to collect and share customer data (to please the advertiser so that the advertiser continues to buy ads.)

        You are just playing semantic games with Google’s one trick. Is the Mac one trick, or is it 5 tricks (iMac, Mac Pro, Mac mini, MacBook Air, MacBook Pro,) or is it 10+ tricks (iMac 22, iMac 27, MacBook Air 11, MacBook Air 13, MacBook Pro 13, MacBook Pro 15, etc.?)

        In the context of tricks and one-trick ponies, the Mac platform is one trick and Google’s ad platform is one trick, because if the bottom falls out of the PC market, all Mac sales suffer and if the bottom falls out of the ad market, all Google advertising sales suffer. Companies look to have a second or third trick so that they can survive that kind of event. Google has no such second trick — if a new consumer micropayment system renders advertising obsolete (e.g. the consumer who is watching an online video simply pays 2 cents to the producer directly, rather than watching an ad and then the advertiser pays the producer the 2 cents) then Google is done. With Apple, the Intel PC market could totally crash and they could just port Xcode to an iPad Pro and keep on chugging.

      • JohnDoey

        > Google is at least a six trick pony.

        Google is a one trick pony. Eric Schmidt literally said so himself. The one trick is advertising.

        > Search

        Ads on a search engine.

        > General Advertising

        Ads on websites.

        > Youtube

        Ads on videos.

        > Gmail

        Ads on emails.

        > Chrome

        Ads in a Web browser and/or PC operating system.

        > Android.

        Ads in a mobile operating system.

        Google is a publicly-traded company. Every quarter they have to tell us where their profits come from. It is always 99.9% advertising. The other 0.1% is just accounting noise from sales of things like ChromeBook Pixel which are actually just a Trojan Horse for their ad platform.

    • praxis22

      I had to sit and stare at that for a while savouring the sheer absurdity of it, before I was fit to comment. It’s a clever pastiche of the trolls art, so I’m not going to bother feeding it.

      That said, as a replay of SCO vs IBM I would love to see that particular fight, as MSFT would have to be truly desperate to try.

      Thanks for the chuckle.

    • JohnDoey

      When and by what metric did Microsoft beat Apple?

      • Never mind the fact that the Microsoft “win” led to a miserable stagnation of products and GUI design. Everyone has seem to forgotten this but we were heading full steam into a world where only Internet Explorer on Windows was going to get you access to goods and services on the web. Thanks to Firefox and then Apple’s mobile browser we averted that disaster. But it did not stop the “Dark Ages” of computing, where absolutely nothing significantly changed because Microsoft had a complete stranglehold on customers and adopted technologies.

  • praxis22

    I read once that Google now had more PhD’s on staff than any company in the history of the world. Which is to say that I think they are “benevolent and hopeful” and unlike normal run of the mill capitalists they do seem to take the idea of “changing the world” seriously.

    You could argue as Jaron Lanier and Evgeny Morozov have done that the end-game of Google’s success is one which is undesirable, either because it decimates the jobs of “normals”, and gives us only “good” choices to pick from, (and arguably in removing the choice to be “bad” lessens human free will) or you could see it as I do as a clearing of the decks.

    It seems to me that the “Google” future is one in which free software eats everything, with hardware becoming a true commodity, of the “throw your old phone into the 3D printer and have it print you new one for the morning” variety, is a good enough starting point. At that point Capital is worthless, as ordinary people will need to be given basic income if the capitalist system of today is to remain intact. Because at that point there will be no artificial scarcity for the rentiers to exploit. The future outlook for the rest of the developing world is even better, as they will not need the legacy production machinery that the first world had. Or they can but it off the West at a discount, as China has done with old Steel Mills in the past.

    As a maker of devices with a vertical value chain however, in this future, Apple, Samsung and Sony, GE, etc. Are all dead. If people, “won’t pay for software” MSFT don’t even have a business. Doing good productive knowledge work at that point will be a luxury that few are equipped for.

    That may sound bleak to some, but at that point Keynes will have had his day:

    “The economic problem is not, if we look into the future, the permanent problem of the human race”

    YMMV however.

    • berult

      PhD-centric Culture suffers the metaphysical equivalent of Carpal Tunnel Syndrome.

      Expertise swells from overuse, applying debilitating locus focus…nerdy pressure onto the hocus-pocus…nervy allure, causing the artistic metacarpals to loosen tenure of the intangible.

      Scientists do sow the conversations. Who then but the ill-literate can allegorize the plots, harvest with punctuated…brush-stroked…thespian concupiscence, bushels upon bushels of behavioral conversions!?

      • praxis22

        “brevity is the soul of wit”

        Nice try, but not nearly as funny as Dusty Johnson below 🙂

    • charly

      It would really surprise me if the British National Health Service has not more PHD on its staff. I’m not knowledgeable of the medical world but it wouldn’t surprise me if that was true of more healthcare providers.

      • JohnDoey

        Are all MD’s also PhD’s?

        Anyway, I’m pretty sure the talking point is that Google has more PhD’s than any private company. Governments exist at a different scale. There are Chinese government companies that are worth over a trillion dollars, but we don’t include them when talking about the biggest market cap in the stock market.

    • JohnDoey

      A bunch of PhD’s doesn’t mean you are a good citizen or do what is right for the community.

      Generally speaking, you are articulating the nihilist viewpoint that we’re all headed off whatever cliff unfettered capitalism wants to jump off. That instead of governing ourselves, we are governed by a tiny group of oligarchical trust fund babies who meet at the right country clubs and agree to invest in each other’s companies. You’re saying that a blue collar kid can no longer grow up to be Steve Jobs because whatever he creates that is even marginally successful will be stolen by giant corporations, and he’ll be put out of business. You’re saying that in your future, the government will pay a neo- Steve Jobs to sit at home and watch Google advertising. And you’re saying that’s a good thing?

      Google’s main concern is to increase their advertising revenue. Originally, they were going to make money in partnership with other Web publishers as website owners placed Google ads onto their own websites, but only 10% of Google’s revenue comes from that today. It turned out to be much more profitable for Google to just clone successful websites onto Google-owned websites and place ads there themselves, and that is responsible for 90% of Google’s advertising revenue.

      In other words, if you integrate Google ads into your product, Google makes $1, but if Google integrates your product into its ad platform, Google makes $9. Therefore, your product has to die so that Google can maximize their profitability.

      So the reason you are seeing a future where nobody but Google has any work is that Google is right now literally stealing everybody’s else’s work, piece by piece. But what happens when they run out of products to steal?

      The reason this is seen as benevolent by consumers is that it feels to them like Google is giving them all these products for free. But among the smaller number of people who make products (artists, designers, writers, etc.) Google is seen as very, very evil, because they are just the latest generation of big business stealing work from creative people and destroying creative careers and businesses. It’s the same as record companies making millions off an artist and yet somehow the artist is millions in debt.

      Also, Google has hardly any artists and hardly any designers. Google has a lot of data but only a very limited understanding of the world because the people who work at Google have the same very narrow world view.

      And Google pays almost no taxes, which is like eating out and not leaving a tip. In fact, Google would have to triple its tax rate to even make it into a 15% tip. Yet even so, when Google wanted to create their own fleet of buses just for Google employees, so they wouldn’t have to sit their precious asses on SFMTA buses, they just rolled their luxury buses up to taxpayer-funded SFMTA stops (even though that is illegal) and crowded out the non-Google riders who pay fares to SFMTA. Google didn’t have any problem breaking the law, they didn’t have any problem using taxpayer-funded stops even though they don’t pay their taxes, they didn’t have any problem crowding and blocking the SFMTA stops and making it harder for transit riders — especially disabled riders —and when confronted with it, instead of paying the appropriate fines, they bribed their way out of it for a about 0.2% of the cost.

      > 3D printer

      > At that point Capital is worthless

      No, because you still need something to print, and producing the files that cause a 3D printer to print something still takes capital. Producing those files still takes the work output of many, many people.

      > Because at that point there will be no artificial scarcity
      > for the rentiers to exploit.

      That is nonsense. A digital music file (for example) is not artificially scarce because the producer of that digital music file asks you to pay them for the money, time, and effort it took for them to make it. The digital music file may contain a new song, and new songs are *actually* scarce.

      Yes, it costs almost nothing to copy a digital music file, but it costs a ton of money to produce the original template for that digital music file. Yes, the cost of recording gear has gone down with digital technology, but the cost of studio space has gone up enough to make it a wash. Yes, the cost of distribution has gone down thanks to the Internet, but consumers expect and deserve to also benefit from that price reduction via lower music costs, and that makes that a wash. The cost of education has gone up dramatically. The cost of living for the many people who are typically involved in the creation of a digital music file has gone up dramatically. And I have not even touched on the quality of the song. New songs of any quality are scarce, but a high-quality new song is really, really, really scarce. An innovative new song is really, really, really scarce. Songwriters are a tiny, tiny percentage of the overall population. Great songwriters are a tiny, tiny percentage of all songwriters.

      What you are doing is sort of like when people say “cyberspace” and that causes them to forget that the Internet exists in the real world and is used by actual human beings. You’re thinking about the technology that makes it easy to copy a file over the network and you’re forgetting about how hard it is to create the contents of that file in the first place. The contents of that digital file may be a Tweet about somebody’s hemorrhoids acting up that took 5 seconds to create and has no lasting value, or the contents of that digital file may be a new song that was created by a team of 8 people over the course of a month, with expenses of thousands of dollars, and which moves most listeners to tears and becomes a part of their lives, becomes the wedding song for a million couples. If you say that both of those digital files are worth $0, then pretty quickly, all of your digital files will contain Tweets about hemorrhoids. Actual living humans with actual needs for food and shelter won’t be able to find the budget and time and creative energy to invest in making new songs for you because the ones who can create songs will be working as janitors at Google.

      I knew a guy who was struggling to work his cracked Adobe Creative Suite because he couldn’t use any support resources and because it was not really the right tool for the job, which was managing and enhancing the photos he created in his photography business. He asked me to help him get running more productively and I told him either buy Lightroom+Photoshop for about $800 or buy Aperture+Pixelmator for about $100 and stop screwing around and get some work done. He said he doesn’t pay for software and I told him: that is why you struggle all day to get an hour of work done — what is that costing you? So he bought Aperture and Pixelmator from Mac App Store and a few months later he thanked me like I was a doctor who had saved his life. He was getting many times the work done, with a tiny fraction of the effort and stress, he had access to all the support resources that went with his professional software, and he felt better that his software and business were legit, he was no longer shy about asking for help online or at the Genius Bar. So it turned out that just being able to copy the Adobe bits was not actually that valuable. By copying the Adobe bits, he thought he was getting $2500 for free, but he actually lost 10’s of thousands of dollars in time and productivity. It turned out that the value is in the community — instead of being a lone guy with a Mac and some stolen Adobe bits, trying to get work done, he is part of a Mac community that includes a team at Apple that will turn his Mac into a raw photo management platform for only $79, and a team at Pixelmator that will turn his Mac into a pixel editor for only $29, and then still be around to help him if he struggles at all to get work done.

      The same is true with 3D printers and CnC machines and so on. The technologies that make duplication easier or make communication easier don’t change the fact that it is *hard* to create the very first product which is used as a template for that duplication. It doesn’t change the fact that the value is in the community that is making the templates (which almost always requires capital and lots of very hard work) not in the printer itself or how easy it is to copy a digital file off a network.

      Your 3D printer user who is printing a new phone at home will still want the producer of the template file he is using to have added new and better features than the last phone he printed, same as today’s phone buyer, and he is willing to pay for that, because those new features will make/save him money/time in his own work. Your 3D printer user still wants to be assured by the producer of the template file for that phone that the resulting object won’t burn down his house while it is charging, same as today’s phone buyer, and he is willing to pay for that. Your 3D printer user still wants the phone to talk to networks he will pay for, to work with other 3D printed products in ways he is willing to pay for. Using a designed product is still a relationship between the buyer and the user, no matter how the product is duplicated for mass consumption.

      The Internet and computing technology has changed the world a lot, but the more things change, the more they stay the same. It still takes a ton of capital, a ton of time, and a ton of work to create *anything* new. And consumers are still willing to pay artists and designers who delight them with new products. The people that consumers don’t like to pay are middlemen and highway robbers. So after the novelty of advanced 3D printing (like the kind you describe) wears off, and as the 3D printers become smaller and more transparent in their use, the 3D printers become the commodities, and users will take them totally for granted and be quite happy to pay for new and interesting and productive product designs to print. We see this right now with music players, which have moved from being a $200 iPod to being a $0 commodity you get for free with your phone, your tablet, your computer. The iPod essentially disappeared into your phone. That is causing more and more people to have music players, and they are wearing out the music they already know and developing a larger appetite for new music, and seeking out services like Spotify where they kind find new music. Today’s music listener is becoming less and less technology-focused and more and more music-focused. Therefore they want to pay less for the music player (in 2006 they paid $250 for an iPod, but today, their music player was free with their iPhone) and more for their music (in 2006 they downloaded random bootleg music for free, but today they want more control over what they are listening to, and they want somebody else to manage it, and they want the artists who are delighting them to get paid, so they buy a subscription or buy from iTunes.) Once the novelty of iPod wore off, the cost of iPods went down and the cost of music is now going back up.

      And keep in mind, over 90% of humanity doesn’t understand what is going on with the bits. They don’t even think of a song as bits they can copy. They don’t want to do file sharing work to get free music that may or may not work correctly — they want to do no work at all and get cheap, paid music that just works.

      So no matter what the technology, there is no excuse for exploiting someone’s work without paying them. If somebody invents an invisibility cloak tomorrow, that will not magically make it ethical to steal your groceries from the store just because you can, or go into people’s homes and spy on them just because you can. You can’t get drunk on your own invisibility power. Right now there are people and companies who are misbehaving because they are drunk on Internet power and think they have a right to exploit other people’s work product or spy on them, just because they *can.* If I have the technical skills to work lock pick tools, that doesn’t mean I am some kind of royalty who has the right to enter any building I want. Human rights (property rights, privacy rights, the right not to be paid for your work product rather than enslaved or exploited) exist separately from technology and the state of technology.

  • beautiful freak

    Google reminds me of children I knew when I was growing up, those who had more money than the rest of us, often from parents whose source of wealth was unmentionable (e.g. tobacco/cigarette production, an analog of Google’s dubious source of wealth). Those kids could always buy the coolest things. Toys, cameras, musical instruments, whatever. Their ownership of these things gave them social standing. Each new toy was soon replaced by another, then another, only to be enjoyed in a superficial way during its brief handling period. This is not to say that the special qualities of each toy were not fully understood, though. That Nikon camera was top of the line, and each specification was a matter of pride. (Never led to great photography, though.) That rack of Marshall amps had awesome specs that could be rattled off verbatim, same as the ESP guitar. (No great musicianship ensued.) With Google, I see the serial fascination for the new and intriguing, an appreciation for the inherent quality in those things, but only as curiosities or baubles. I would consider the employment of great engineers to be a toy-acquisition. Whatever those engineers do can be seen as a toy’s performance, even if it is inherently interesting and of merit. Self-driving cars? Neat trick! As with those children from my childhood, there is something missing, some quality of seriousness and personal depth. Keeping the other kids in the neighborhood entertained by acquiring new things to show off only works until everyone grows up.

    • marcoselmalo

      Still, I’m pretty sure buying the same Les. Paul that Jimmy Page uses will make me a better guitarist. 🙂

    • peter

      Viewing Google owners/management as the accidental heirs to a great advertising fortune may have some explanatory merit.

      While some heirs are groomed to run the family business, other heirs somewhat despise the lowly origin of their great fortune. While some heirs carefully and shrewdly expand the family business, other heirs prefer to throw their weight behind grandiose big bets on “new things/visions” to show the world what they can do.

      Google’s purchase of Nest and sale of Motorola seems to fit the “new toy / discard old toy” narrative (as do the driverless car, the glasses, the high altitude balloons, etc).

      If this narrative holds any predictive value then the true test for Google is what will happen when the handlers of the young heirs retire or are cast aside.

      In the meantime, you would not want to be one of the dim witted cousins owning any of the noncontrolling shares.

      • charly

        Selling the part of Motorola they weren’t interested in makes completely sense. They didn’t buy Motorola for their settop boxes or mobile phones but for their patents.

        Google makes so much profit that it is wise to have money wasters to lower the profit to keep the pirates at bay.

      • JohnDoey

        You’re right that Google bought Motorola for their patents (the CEO of Motorola announced he was going to sue all the Android device makers for patent infringement if Google didn’t buy Motorola) but you are wrong that they did not want the phone hardware business. The reason we know this is that Lenovo offered to buy the phone hardware business from Google within minutes of Google buying Motorola, and it took Google 18 months to say yes, and they only said yes after they got Nest to replace it. So what we just saw was Google admitting they had failed to turn the Motorola phone hardware business into the consumer hardware business that they had envisioned, so they fired Motorola and hired Nest.

        It is never, ever wise to waste money. Apple makes much more profit than Google (3x more,) and yet Apple has never bought a company for more than the $450 million they paid for NeXT, and that might be the most financially-successful business acquisition ever. If Google can’t find a legitimate investment for its profits, it can invest them in itself, like Apple just did.

        Apple profit vs Google profit

  • JohnDoey

    The fact that Apple has so many imaginary problems (and always has) has never concerned me, and I am a very long time user. But that doesn’t mean they don’t have any real problems.

    During late 2013, I went into an Apple Store to replace my iPhone and iPad with new models, but for the first time ever I left empty-handed, solely because of the lack of quality of iOS 7. For the first time ever, demo devices at the Apple Store crashed on me, and they crashed repeatedly. Even aside from that, for the first time ever, I did not enjoy using the new devices. For the first time ever, I couldn’t find a feature of the new devices that would benefit my work over my current devices. Then I read that Apple’s iOS sales growth has slowed dramatically, and I’m not surprised, because that matches my personal experience. None of the other Apple-is-doomed narratives ever matched my personal experience before. But to see the quality of Apple products fall off so dramatically and their sales growth fall off so dramatically at the same time is compelling.

    And I have many, many friends who at some point over the past 10 years decided to buy their first Apple products while looking over my shoulder at what I was doing with my Apple devices. Their complaining about Windows and/or computing in general all disappeared after they switched to Apple, but since iOS 7 installed itself onto their devices, the complaining is back, as though iOS 7 is a Microsoft operating system release. That has severely impacted their enthusiasm for new devices, also.

    iOS 7 also seems to me to have made it much easier for Microsoft to create an iPad clone that has a practical method for developers to port their iOS apps to it, which was the secret of Windows 3.1’s success. Can Microsoft execute on that? Probably not. But it disturbs me that Apple just made their job so much easier by basically meeting them in the middle with a much more Microsoft-like iOS. Microsoft doesn’t have to add delight or reduce crashes for the first time ever in their history, because Apple took those competitive points off the table by taking the delight and reliability out of iOS in version 7. Now, it’s not hard to imagine an iOS 7 developer shipping a new app and then turning the Xcode project over to a single Microsoft coder who can port the whole app to Windows in a fairly short time without even needing the assistance of an interface designer or visual artist. He already has the flat icon and text-based interface that he needs, as well as a bunch of C/C++ logic that he can simply Copy/Paste over. It’s not that much of a stretch to think that in the near future, Microsoft developer tools will simply import Xcode projects and do 99% of a port for you. If only the code needs to be different, you’ve really leveled the playing field, made it possible for automated processes to do much of the work.

    In short, I’m well aware that there has always been an Apple-is-doomed narrative, and I’ve laughed at it for many years. But I stopped laughing in 2013.

    • r00fus

      Your post is thoughtful and well-considered, but keep in mind that your impressions are anecdotal. As a counter-anecdote, my iPhone5 and older 4S ran fine on iOS7 and to me, it’s a hell of a lot more usable (the control center – borrowed from Android – is implemented almost perfectly). A stray UI crash here and there (1-2/mo, sometimes during calls, but strangely the call is unaffected) but the OS seems very stable and more accessible to me.