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Google weighs using data for profit
A car drives by a sign outside of the Google headquarters in Mountain View, Calif.
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TEXT OF INTERVIEW
Kai Ryssdal: Google's having kind of a tough week, PR-wise. Yesterday, the company that made the phrase "don't be evil" popular, said maybe it is OK after all to charge different prices for different kinds of content online. And then today, a story in the Wall Street Journal has some details about how Google is deciding to capitalize on the enormous pile of user data it has to turn a profit.
Jessica Vascellaro wrote the piece about Google's data vision statement in the Journal this morning. Jessica, good to have you with us.
Jessica Vascellaro: Thanks for having me.
Ryssdal: Obviously, there's a bunch of stuff in this Google Vision statement that they wrote without intending for anybody to see it. But what are they thinking about in terms of doing stuff with our data?
Vascellaro: Well, back in 2008 -- when a Google employee was working on this -- they were specifically thinking about ways to show people ads targeted to their interests. And obviously, the more relevant the ad, the more the advertiser will pay for it. So what Google's looking to do is, "We have a ton of data about users, what could we use to help deliver more relevant, and therefore, also more expensive, ads to consumers?"
Ryssdal: Give me an example, would you, of how they know what they know about us? How do they know what to set in my Gmail advertising space, for instance?
Vascellaro: The ads that you're seeing in your Gmails, they're related to what's written in your Gmails. So if you have e-mailed a friend about a vacation to Hawaii, you're most likely going to see a Hawaii text ad. Google employees do not sit there and read everyone's e-mail. They have computers that do the matching.
Ryssdal: It seems to me, and you point this out in your article, that the power structure on the web really has shifted from people who have the most eyeballs going to their sites, to people who have the most data about the users who go to their sites. And then they can trade on that data and make more money.
Vascellaro: All ad companies are looking for data, you know, they're looking for it to sell more advertising, but also just to make the actual Internet service more customized and personal. A good example is search. Google can tailor what search results you see based on data about what you've searched for in the past. So there's a big land grab out there to get the most on lots of different interactions people are having online, because there's a lot of money in it.
Ryssdal: Google is, obviously, far and away the biggest money maker from ad search out there, but as you point out in your piece, their revenue growth is slowing, they're under pressure to find new ways to make money. Is that sort of driving this move away from the whole "don't be evil" mind set to "how do we maximize our value?"
Vascellaro: Google's founders and team is saying that they're sticking to their goal of really putting the user before the advertiser, which is how I guess they would define "not being evil." But clearly, as you said, search advertising growth has really slowed, so Google has to look into new types of advertising. And the one that it's staking the most on right now are these display ads and the banner graphical ads you see on web pages as you browse around. And that industry is full of players that are very much into targeting big companies that are hoarding data, so that's really caused Google to say, "OK, how can we get into this area? While we're trying to, as closely as possible, stick to our principles of letting users how we're using the data."
Ryssdal: Google being the 800-pound gorilla that it is, though, if they make some seismic shift in how they use data, they have the ability to force almost everybody out there to do, in essence, the same thing, right?
Vascellaro: Google can influence market in a number of ways. I mean, one just is the sheer number of users and advertisers is has. If it makes a new sort of ad targeting available, more people are going to see those ads, more advertisers are going to buy them. So, where they draw the line and what they use and how they think about this will shape the industry.
Ryssdal: Jessica Vascellaro writes on the media for the Wall Street Journal. Her piece today on Google is part of the paper's "What they know" series on privacy and data and all that good stuff. Jessica, thanks a lot.
Vascellaro: Thanks for having me.
I used to always use Yahoo out of habit until Yahoo started putting pop-up adds on the computer and Google came along. Now I'm getting out of the Google habit because of their data collection practices. There are enough other search engines that I no longer need to use Google. We consumers vote with our feet, so to speak when we don't approve of a businesses practices and will be voting with our feet against Google.
I use my primary e-mail through an obscure little known ISP for a monthly fee. What they offer that I am willing to pay for is an absolute promise that they do not collect data on me, and will keep everything that I do private. I've had that e-dress for 15 years and judging by the absence of spam I get at that e-dress I am convinced they have kept their promise.
Speaking of Google, my employer switched over to Google for their corporate e-mail, and soon as they did, I get daily, multiple e-mails on my work e-dress offering for sale discount Viagra, male and female enhancement formulas, work at home, and Rolex watches.
Considering that Google provides free email, free search, free maps, etc., it is hard to argue that trying to make a profit on the data that they collect is evil. Before Google came along you had various companies trying to squeeze every last cent from folks for those types of services (Ex. Microsoft MapPoint for $300).
To Laura Burke,
Every ad supported email service on the web crawls the content of your email to serve relevant ads. These bots are just looking for keywords generally, like their example of the word "Hawaii". That's how most, if not all, advertising on the internet works. Identify the audience or subject, advertise accordingly.
Email is not a secure form of communication. Your company scans your email for viruses, universities scan students' email for phrases to protect against harassment, and the government scans emails for security threats like "bomb" and "kill president".
I am horrified that Google sifts through my e-mails, correspondence that is private, to tailor ads for me. I just opened a gmail account - easier to access on my smart phone. I'm ready to shut it down and change my go to search engine. Marketplace seemed to take this detail in stride - is this actually happening or is it something Google is only considering?
Jessica says that Google's profit growth has slowed, so they have to look at other ways to grow their business.
I find that one of the great evils of the way many companies think. No, companies, in my opinion do not have to endlessly more and more money. As long as they turn a profit, they can stay in business. That's it!
