Wednesday, October 9, 2019

Google CEO Sundar Pichai Claims to Love Small Business. Does He Really? - Inc.

Google CEO Sundar Pichai Claims to Love Small Business. Does He Really? - Inc.


Google CEO Sundar Pichai Claims to Love Small Business. Does He Really? - Inc.

Posted: 07 Oct 2019 11:37 PM PDT

Google CEO Sundar Pichai published an op-ed on the Fox News website last week titled "American Small Business and Big Business Must Grow Together." In it he earnestly argues that big and little businesses need each other, and how Google is here to help small businesses grow. But what he's actually saying is that small businesses should use as many Google products as possible. 

Even if those products and services cost nothing to the consumer, they're still lucrative for Google because they come with advertising. They also give the company a way to gather even more valuable data about those who use the products. So when Pichai writes, "For us, the last two decades have shown that big businesses and small businesses can grow together, especially in the digital economy," what he really means is "We'd like to grow our big company by selling more products to your small ones."

Don't get me wrong. I love Google products--as a one-person business, I use a lot of them myself. And I have great of respect for Pichai, who has mostly shown himself to be an able leader for Google. But he loses that respect when he thinly disguises a sales pitch with claptrap like this: "Every day millions of small businesses are creating and building amazing things--and experiencing the same growing pains as we did. I believe larger companies like Google should play a role in helping them. 

Caring deeply about selling stuff to small businesses is very different from caring deeply about small businesses. Pichai seems to think small business owners can't tell the difference, which is just insulting.

Small businesses consistently rank lower in Google searches.

To learn how Google really feels about small businesses, consider how that tech behemoth treats them when it's not trying to sell them something. For instance, when ranking small businesses in its market-dominating search engine. Try this simple experiment: Google any word or phrase you can come up with. Unless your search term is actually the name of a small company, or perhaps its CEO, chances are that the top result will be the website of a large organization, not a small one. The second and third top results probably will be as well.

Last year, Matt Bentley, founder of SEO consulting firm CanIRank conducted an analysis of search rankings for 30,000 websites to see how Google ranks small and large companies in search results. The results were disheartening for small businesses. Bentley found Google search rankings have a built-in bias toward large businesses over small ones. In fact he found that just four huge organizations--Amazon, Google, Wikipedia, and WebMD--were vastly overrepresented in top search results. He says this is because big names are more recognizable and that the human bias toward the recognizable has been programmed into Google's AI which ranks search results. Although Bentley doesn't mention this, big brand websites are likely to have more inbound links than small ones, and inbound links very much boost search rankings.

How bad is this built-in bias toward big companies? Bentley claims that just four websites--Wikipedia, Amazon, Google, and WebMD very frequently appear in the top three results of a Google search, while small businesses' websites don't come up until the second or third page of search results. And Bentley says, in his experience, this tendency to favor big business' websites over small business' ones is getting more pronounced over time.

Better content doesn't help.

One common piece of advice to small companies that want better ranking on Google is to add high-quality content to their websites, but Bentley's research shows this really doesn't help. In fact, he found one of his clients outranked by Amazon on the search term "massage table" even though, at the time, Amazon had only one model and 200 words of garbled content about it clearly written by a non-native English speaker. Meantime, his client, who had many models and a lot of useful content about massage tables did not appear until the second page of search results. "Put the same piece of content on a big brand site and a small business site and the big brand will outrank every time. Worse, put a much better piece of content on the small biz website, and in most cases the big brand will still win," he says.

Pichai touts local search results, the results that come up when someone searches Google for a restaurant or other business "near me" as a way Google is helping small businesses. If you've used this feature, you already know that a lot of small businesses don't appear in these results at all. Having gotten directions to a dry cleaner "near me," you'll often find yourself passing two other dry cleaners on your way there. Obviously, for most retailers and food service companies, ranking well in Google's "near me" results is highly valuable. To make sure to get the best listing, Google offers some useful advice, such as making sure your hours are accurate on Google and verifying your address with Google. But here, as with regular search, inbound links are a very powerful ranking booster, which means--as with regular search--large organizations will always have a built-in advantage.

When I reached out to Bentley to ask about his analysis, his response was enlightening: "Wow, I did not realize that Sundar Pichai claimed to be on the side of small businesses. From my perspective as a marketer who works with a lot of small businesses and startups, that feels more than a little hypocritical."

I don't know about you, but it feels that way to me too.

Google has not responded so far to a request for comment.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

Texas attorney general, Google’s new competition cop, says everything is ‘on the table’ - The Washington Post

Posted: 08 Oct 2019 06:55 AM PDT


Ken Paxton, Texas attorney general, announced the investigation of Google outside the U.S. Supreme Court on Sept. 9. (Andrew Harrer/Bloomberg)

AUSTIN, Tex. — Ken Paxton is no fan of Google. The Lone Star state's Republican attorney general says he rarely even uses the company's widely popular search engine, opting instead for rival services, because he has "always been concerned about tracking."

But Paxton these days is more than a mere sideline skeptic: As one of the country's most powerful law-enforcement officials, he's forging ahead with a landmark investigation into Google's decades-long dominance of the web, armed with the help of 50 other attorneys general, a stable of savvy experts that includes Google's past foes, and a feeling that Washington for too long has turned a blind eye to some of Silicon Valley's most troubling practices.

For now, the investigation, which Paxton and his peers announced in September, focuses on online advertising, responding to complaints that Google puts consumers and competitors at a disadvantage by controlling the exchanges where ads are bought and some of the most popular websites where they're sold. It could result in tough punishments, Paxton signaled, if investigators determine Google broke the law.

"We're prepared for whatever the right thing to do is for consumers," he said during an interview with The Washington Post in his office in the Texas capital. Whether it's standing down or forcing Google to sell off parts of itself, Paxton stressed: "All of that's on the table based on what we learn."

The probe marks the first major U.S. antitrust action against Google in roughly a decade, after Texas joined other states and the federal government in scrutinizing the company's search engine in a competition probe that ended without major punishment for the tech giant.

Since then, Paxton said, Washington has failed to pursue key signs that Google and Silicon Valley are in violation of federal law. "Antitrust seems like it hasn't been focused on for decades, through several administrations, not just Democrats but also Republicans," he said, later adding: "I think this should have been looked at sooner than it is."

The result is a significant legal and political challenge on the horizon for Google and its executives. Bipartisan in nature, and born out of a belief that the tech industry has escaped government accountability for too long, Paxton and his team said nothing is off limits — words that threaten a broad review of Google's business in a way that could reshape not only the company but the rest of Silicon Valley.

"If we end up learning things that lead us in other directions, we'll certainly bring those back to the states and talk about whether we expand into other areas," he said.

Google declined to comment.

Overseeing an office with nearly 800 lawyers, Paxton emerged this year as a convening force in the sort of antitrust probe that's long been sought by Democratic and Republican attorneys general alike. Eight states, including Arizona, Nebraska and North Carolina, are helping to steer the Google probe as part of an executive committee, but it's Texas that started the legal action by sending a legal demand with hundreds of questions to Google on behalf of the group.

It is not the only probe of the tech giant under way: Investigators at the Department of Justice in Washington also are homing in on Google and its lucrative ad empire, and they sent their own battery of questions to the company this summer. Members of Congress similarly have targeted Google and other tech giants as part of a sweeping review of federal antitrust laws. And European regulators continue to scrutinize Google and its search, ad and smartphone practices, having already slapped it with roughly $9 billion in antitrust fines over the past three years.

For state attorneys general in the U.S., the driving question comes down to dollars, Paxton said. Ads targeted to people's browsing behavior are Google's lifeblood, accounting for much of the company's roughly $117 billion in revenue last year, according to its financial statements. That puts Google in the pole position in the United States, where it takes in around 37 percent of all digital advertising revenue, according to eMarketer data from February. In search, Google captures even more -- 74 percent -- of the market, the firm computes.

Importantly, ads provide financial fuel for Google's popular, free services, such as search, email and mapping, as well as its more audacious gambits, including self-driving cars. Paxton acknowledged these products are widely liked around the world, even if he personally doesn't use all of them regularly. But the attorney general stressed Google's dominance of the ad industry still has stifled the Internet.

"Consumers may feel really good about having free searches but the reality is nothing's free. And if there's no competition on the Internet for advertising, then consumers, unbeknownst to them, are paying much higher costs for products than they otherwise should," he said.

Google has sought to tell a different story about its business. Appearing on Capitol Hill in July, Adam Cohen, Google's director of economic policy, said that Internet advertising is cheaper and more effective than ever before. "We have created new competition in many sectors, and new competitive pressures often lead to concerns from rivals," he said in testimony. "We have consistently shown how our business is designed and operated to benefit our customers."

But Paxton said state investigators have heard from a torrent of competitors, particularly in the publishing industry, who say they cannot compete with Google's scale, meaning they lose out on revenue that might fund their content or services.

The vocal opponents include some of Google's long-time foes, such as News Corp., according to two Texas officials who requested anonymity to discuss private conversations in the probe. The Rupert Murdoch-backed empire previously has complained to antitrust regulators in Europe, Australia and elsewhere that Google's ad dominance results in fewer dollars for publishers, and News Corp. has gone as far as to call for the tech giant to be broken up at times.

A spokesman for News Corp., James Kennedy, declined to comment on the company's interactions with Texas. But, he added in a statement: "Our position regarding Google's damaging anti-competitive behavior and existential threat to journalism has been made clear over the years."

In probing those allegations, Paxton and his attorney general allies have turned to one of News Corp.'s past advisers. Among the experts the state has retained is Cristina Caffarra, who has assisted News Corp. and other Google foes on antitrust issues. A competition expert and economist at the consulting firm Charles River Associates, Caffarra boasts deep experience in Brussels, where Google has been repeatedly fined for competition violations. In those cases, including a recent decision finding Google's Android smartphone violated regional competition laws. Caffarra has supplied considerable economic evidence in opposition to Google's practices.

Caffarra also has worked on behalf of other Google foes, including the Russian search engine Yandex on its complaint in Moscow and the EU about Google's business practices, she's indicated in public reports. She declined to comment on her role in the states' probe, other than to say that she is not working for a corporate client that's opposing Google presently. But her participation in the states' effort took center stage in September, when she appeared alongside more than a dozen attorneys general when they announced their plans from the steps of the U.S. Supreme Court.

For Google, the states' probe could easily broaden beyond its ad business and its effects on publishers. Democratic and Republican attorneys general long have criticized the company for the way it collects users' data and displays its search results, for example, along with the means by which it has piloted Android to become the world's most widely used smartphone operating system. Some state officials raised these issues when they announced their ads probe in September.

Paxton's office has additional concerns of its own: Texas is in the early stages of a consumer-protection investigation focused on allegations that Google makes decisions about the content it displays and suppresses that are biased against conservatives. Jeff Mateer, Paxton's first assistant attorney general, confirmed the state's interest last week, four months after he aired his concerns at a conference in Omaha that big tech should be "held accountable" if the industry misrepresents its political neutrality. Google has denied charges that it is politically biased.

Texas long has long been troubled by Google's behavior. Roughly nine years ago, it became one of the first to embark on an antitrust investigation of Google when it opened a probe into the way the company presents search results. It was Paxton's predecessor, Greg Abbott, now the state's governor, who sought to determine if Google demoted competing services, such as shopping-comparison sites, that rivaled its own offerings, violating a principle that Texas called "search neutrality."

Texas issued some of the initial orders demanding key documents from Google, at one point going to court to battle the company over access to information. The answers the state obtained ultimately appeared to influence some of the thinking at the Federal Trade Commission, which assumed the role of Google's chief investigator in the United States. An inadvertently released staff report from that probe, which ended in 2013, cited emails, memos and other materials obtained by Texas in concluding Google had in fact put its rivals at a disadvantage.

In the end, though, the FTC opted against issuing steep penalties targeting the company's search practices, sparking widespread criticism that the federal government had failed to capitalize on the evidence trove that Texas helped amass.

Gary Reback, a lawyer at the firm Carr & Ferrell and a longtime Google foe, said the documents at the time showed that Google had "jimmied their normal algorithm to demote certain sites." It's hard to "generalize" from one investigation to another, he cautioned, "but what we do know is the Texas attorney general can be effective in getting the kind of information that might lead to government action."

But the timing of the states' latest investigation — and the optics of their announcement — still triggered criticism that the attorneys general hoped to leverage their work for political gain. The Competitive Enterprise Institute, a advocacy group that opposes antitrust law and has received contributions from Google, blasted the probe in September as an exercise that would "benefit state AGs' political ambitions, but impose harmful costs on consumers, businesses, and the economy."

Paxton, in particular, has issued at least two emails to supporters through his campaign, including an Oct. 2 note that said he needed $25 or more to "fight Google's dominance over so much of our lives," including the effects it has on publishers.

As such scrutiny intensifies, Paxton and his team cautioned they're at the beginning, not the end, of an investigation. With Google, in particular, "a lot of people just didn't understand the model" until recently, he said. "The way it's been done, it's been hard to get a grip on what's going on behind the scenes."

While he said that the broad, national participation reflects the seriousness of states' concerns, Paxton stressed they hadn't reached "any kind of conclusion, there's so much we don't know."

"Whatever that leads to," he added, "it leads to."

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