Should Google Be Regulated? An Interview with Rand Fishkin

When writing my series evaluating the major tech companies, I asked Rand Fishkin a few questions about Google. That sparked a longer conversation that I thought would be worth publishing as a separate interview.

Rand’s one of the foremost experts on Google, and one of the people I trust most on the subject. As the founder of SparkToro and Moz, he’s had a front row seat to watch Google grow from a popular search engine to the digital behemoth it is today. I hope you’ll find this conversation as insightful as I did.

What does Google owe to publishers?

If you ask “to whom does Google owe its business”, it’s maybe 5% the incredibly smart engineers who helped build the company and 95% the rest of the internet. But those creators weren’t savvy enough to realize they were being Trojan horsed the whole time.

In this harsh capitalist world, we don’t have the mechanisms to create that fair distribution of wealth and labor, or to or recognize those contributions. In the early years of the internet, I don’t think anyone really understood how exploitative Google’s model was: it put everyone who created for the web into a prisoner’s dilemma, in which they received diminishing returns for their labor while creating increasing returns that the search engines and social networks extracted.

How directly can you tie Google to the demise of publishers, such as local newspapers, or to other businesses, such as Yelp?

I think you can very directly attribute the loss in revenue that went to publishing content to the free, but advertisement-heavy portal that Google created.

If you compare the advertising revenue of newspapers against Google’s advertising revenue, you’ll find that newspaper advertising fell off a cliff from 2006 to 2010 – while at the same time, Google’s ad revenue skyrocketed.

Newspapers made money from classified ads, brand advertising, direct response advertising. You had the sale of customer data – a business could go to the Seattle Times, for instance, and purchase the rights to use a subscriber list to send flyers in the mail.

All of those revenue streams essentially accumulated to Google. And there’s nothing inherently wrong with one company displacing another company because they have a better product. What feels unfair and unethical is that in Google’s case, they did not create better content. Instead, they convinced everyone to fight against each other to create free content. Google crawled that content, displayed it on search, and sent traffic to those publishers.

That free traffic is Google’s Trojan horse. Once they’re in, they begin extracting instant answers and building competing businesses. And then you realize you’ve been hacked.

Do you think we’ve reached a high water mark in terms of Google taking over search results, or is that tide continuing to rise?

That’s a tough question. Eight weeks ago, I would have told you it just keeps rising. It’s been rising for over two decades.

But then we saw this weird thing in February: featured snippets and instant answers dropped significantly across the board. That might actually be a response to anti-trust pressure – usually, when Google makes changes to search, they test it against user behavior. But if that had been the case, they would have discovered it in the last ten years. Coming now, it looks like a response to potential government action.

Kind of like Microsoft changing their behavior in response to the anti-trust case in the 90s. Do you think that’s happening at Google?

Fingers crossed, right?

There’s a lot of people, including senior folks at Microsoft I’ve talked to, who’ve said that Bill Gates and Steve Ballmer were furious about the anti-trust case. They thought it was completely unfair, and that they were being targeted because they hadn’t bribed the right people in Congress. When I say bribed, I mean donated – we have legalized bribery, obviously.

But from what I’ve heard, the anti-trust pressure made Microsoft a better company and allowed for an open internet. Without the anti-trust case against Microsoft in the 90s, youd would have almost certainly seen an internet that ran exclusively through Internet Explorer. Microsoft would have almost certainly owned the mobile experience, and would have used their monopoly over operating systems to dominate all the new opportunities the internet created. We probably wouldn’t have seen the success of Google, Facebook, Twitter, LinkedIn, or other companies.

Do you think there are regulations the government could apply against Google that might help some of the anti-competitive issues we’re talking about?

Let’s see, if I could wave a magic wand, what would be the best course of action? I think the best possible outcome would be a breakup of Google into several different component parts.

I’d probably break up Facebook as well. I think that’s why Facebook has been trying to integrate WhatsApp and Instagram as rapidly as they can – because they realize that those are acquisitions that the FTC never should never have approved.

But for Google, I would make YouTube and Google Maps into separate companies alongside Google Search. I might consider the Google Display Network as a fourth, but I’m not 100% sure about that one.

Where would you fit Android within that?

That’s a really tough one. Android is almost its own mini-Trojan horse to make sure Google gets all the data about everything that happens on mobile devices.

Chrome is much the same way across both, but it’s difficult to show how Google used their monopoly power in search to give Chrome an unfair competitive advantage. It’s easy to show how they did so with YouTube and Google Maps. Google essentially did what Standard Oil did in the 1890s: “If you want to use our rail lines, then you have to transport our oil.” It’s the textbook definition of unfair, competitive monopoly power abuse. So for those it’s easy.

Android is tougher because Google didn’t really use Search to make Android the default mobile provider. With Android, they created a good product, open source, a nice competitor to Apple, everybody can build on top of it.

It’s a bit more like Chrome in that sense. Google Search did put a message in front of Internet Explorer and Firefox users asking people to try Chrome. It’s a little nudge, but it’s not like Google prevented you from searching or put their browser on top of web results. So that one’s a tougher sell to me in terms of how Google’s monopoly on search unfairly biased people to Android.

Is there any risk that if you broke up Google, Android could lose enough market share that Apple could claim a monopoly over smartphones?

It’s possible. But I think that as long as Apple wants to keep their premium marketplace position, I think they’re always going to be happy to have a third or so of the market share and two thirds of the revenue. I don’t see Apple going down market or allowing every phone to build on iOS, but who knows?

What do you think is the most likely result of the ongoing anti-trust cases against Google?

It’s hard to say. I think the first case was rushed – the one filed right before Trump lost the election. I’m not sure that’ll have much, if any, result.

I have not yet seen what the Biden administration’s approach is going to be. So it’s hard to speculate until we get some concrete direction on what they’re going to do.

But they haven’t even been able to confirm the attorney general yet. When you have all 50 Republicans in the Senate voting against everything you try to do, it makes it much harder to get anything done. So I think we’re in for a relatively quiet period.

There’s also the other two cases, as well as the Congressional investigation led by David Cicilline. If I had to guess, I would say Google will be scared into making moves like the reduction in featured snippets.

But I don’t know, I’d say 50/50 odds that nothing significant happens until or unless the Biden administration or some future administration takes concrete, strong action to fight against it. And if my anti-trust history is accurate, it’ll have to be a much more severe crisis before the American government takes real steps.

When Google makes changes to Search that disadvantage smaller business, they typically justify it on the grounds that these changes help users. Is that a fig leaf, or is there any truth to that justification?

Although Google uses it as a defense, it is provably false in many cases. One of my favorites is Google Maps. If you go back to 2008, Yelp has one hundred times the number of reviews and quality of reviews that Google Maps does. And Google Maps starts putting their results on top of search, pushing Yelp down and then nudging every small business on Search to get more reviews and nudging consumers on Android and Chrome to leave reviews. So over the next ten years, Google does catch up to Yelp in review numbers and quality. They even surpass Yelp in a lot of countries where Yelp hadn’t penetrated the market yet.

And so now Google points to Maps and says “Look, we’re just as good or better. So what are you talking about? We’re not unfairly advantaging Google Maps.” And the only way that’s true is if you ignore history. Same is true for YouTube – in the early days, it barely stayed up. It was not the most popular video platform.

But then it has a few viral hits. Google buys it. They put their infrastructure behind it. They put YouTube results at the top of Google searches. They make the video tab almost exclusively YouTube. Then in 2014, they make it completely exclusive with YouTube. And today, YouTube is the default, dominant player in video. But how did that happen?

That’s a good-looking anti-trust claim today. “Hey, we just put the best thing first and that happens to be YouTube. That happens to be Google Maps. That happens to be Google Flights. That happens to be Google Hotels, Google Finance, Google Jobs.” But how did all of those products get to be the best?

So it’s a chicken-or-egg issue, where Google eventually does provide a better user experience – but first, they take it over via the muscle of Google Search.

There’s nothing so powerful as a machine learning algorithm with 10 million times as much data as the next largest player. And that is exactly how Google plays Search to win against any potential competitor.

This is my long-term fear: after Google has done this in sector after sector, how long can it really be before they come for your sector?