Google: the Wal-Mart of businesses.

Earlier this week I wrote about the shifting economics of digital information. Then, yesterday I read a really interesting article on Gizmodo about a feature of Google's new Android operating system and how the feature (among others) is going to "destroy" companies. Here are some of the salient details you need to know:

• Just like your computer, your cell-phone has an operating system on it. It might be Windows Mobile, Symbian, iPhone OS, or one of several others. It's just the background "brain" that allows your phone to do whatever it does.


• Google has developed their own operating system called "Android." Sounds cool, huh?


• Like Apple, they've said to the world, "Here is the code for the system. Play around with it, and we'll sell the cool apps you make and give you most of the money from those sales."


• Since it's Google's operating system, it interfaces really smoothly with nearly everything else Google offers.

The issue Wilson Rothman, the author of the Gizmodo post, has is NOT with the operating system, or even Google, per se. Rather, he argues that Android's Googlemaps capabilities is an example of Google's ability to "destroy" companies "that [trade] in data or packages it for public consumption." He points to companies like TomTom and Garmin who charge a pile of money for users to get access to their maps. Rothman compares the potential loss of income here to "the devaluation of the office apps that make Microsoft rich." Google's free office suite now has lots of people asking, "Why would I pay Microsoft a bunch of money for software I could get legally for free?"

My issue with Rothman (not personally; I really like his articles) is his use of very loaded words like "destroy." Well, really it's with the notion that the demise of a company that sells communications data is a bad thing, if that demise is caused by a company who gives that same data away for free (or close to free).

An analogy: Wal-Mart destroys Ma & Pa businesses when the giant company moves in to a new market. It's an argument we've all heard before. Movies have been made about it. Now, I'm not a fan of Ma & Pa losing their business. I love Ma & Pa; I want them in my community. But I can't argue with the benefits Wal-Mart provides to that same community. Those benefits include LOTS of jobs (with decent insurance coverage) and products at lower prices. Ma & Pa have to close up shop because they have to charge too much for those same products; it sucks for them, but many more people benefit from Wal-Mart's presence.

Sidebar: I know that this Wal-Mart argument is not water-tight. I also know that arguing in favor of Wal-Mart in this way makes me sound like some fiscally-conservative prick, which I swear I am not.

My point is that companies who trade in data, ANY data, have the right to charge for it just like the grocery store has the right to charge me for bananas (or any other delicious edible). However, if I can legally obtain bananas (or data) more cheaply, I'm gonna spend less money. Every time. Wouldn't you do the same?

Companies like TomTom, Garmin, Microsoft et al have made lots of money selling products they spent lots of time/effort/capital to create. Google comes along and says, "Our revenue stream is kinda focused elsewhere, so we can just give some products away for free (or cheap), so that you - the user - will like us. It turns out the technology is already in place or can be developed by us on the cheap, so ZOOM away we go." Then, companies who previously sold those margin-rich products say, "Aw, dudeman. We were making money off that stuff. Now what're we gonna do?" Like Ma & Pa, it sucks for those companies, but how many more people are now saving money because Google stepped in? Lots.

Although, yeah, TomTom has to lay off folks, so now I feel bad about that. Hmm. I dunno, what do you think?

Pay vs. Free? How do you communicate?

I recently ran across a video by a group called building43, a budding online information community. In the video, blogosphere guru, venture capitalist, and snappy dresser Guy Kawasaki, asks an awesomely diverse panel, among other things, what they do/don't will/won't pay for in terms of technological communication. Their answers at times were equally diverse, but there was a common theme of not wanting to pay much for anything. I'm oversimplifying a bit, but you can watch the whole video here.

Now, Kawasaki has sort of made his mark as a venture capitalist, so he's interested - at least in part - in effective strategies for making money. Again, I'm oversimplifying because Kawasaki has done plenty of great and altruistic things for social media. That's relevant because he laughs (politely) quite a bit when most of his panel members say they wouldn't pay (or wouldn't pay much) for this online service or that online service. I think he laughs partially because their unwillingness to pay seems to contradict their dependencies on existing services, and I am very interested in the paradox that illustrates - more on that below.

I came across the video from an American Express (yeah, that one) blog, of sorts, called OpenForum. Kawasaki wrote a short post there (click here to read it), in which he paraphrases Wired Editor-in-Chief Chris Anderson made two points that interested me a lot:

• Digital economics has created a deflationary economy in which there is near zero marginal costs for distribution. Hence, content is getting cheaper and approaching free.
• Today’s generation expects things for free because people have internalized these digital economics. Adults, by contrast, grew up believing that “free” is a gimmick—i.e. “There’s no such thing as a free lunch.”

Put another way, tech-users of my generation (and older, if you can believe they exist) have been taught that free means "dangerous." However, younger users of communications technology have been raised to expect free (or really, really cheap) technology, so companies who offer those technologies have had to drop their prices again and again just to keep their products in use.

Sidebar: In an article this summer, Anderson points out that "the Neiman Marcus catalog offered the first home PC, a stylish stand-up model called the Honeywell Kitchen Computer, priced at $10,600." Think about where those prices are
today.

Are Kawasaki and Anderson right? In terms of communications technologies (email? cell-phone? cable TV? GPS? etc.), what do you pay for? What don't you pay for? If one of your "free" service providers started charging, what - if anything - would you pay for? Most importantly, why/why not?

FTC now regulating blogs? Relax, civilization won't end.

The Federal Trade Commision announced yesterday that they are now regulating some specific types of speech in the blogging world. Specifically, they are going to try to force bloggers to divulge freebies and endorsements from products they promote on their blogs. The FTC says they're going to levy up to $11,000 per violation, and on a blog there could theoretically be several violations per post. So what's really at stake here?

I've referenced Jeff Jarvis on this blog before, and I still think he has some important ideas on language and business communication. However, he states in a recent post, that he's very, very opposed to the new FTC regs, and I'm not exactly sure why. Well, I mean understand his argument; I'm just not sure I agree. He points to horrendous semi-spam sites like Pay Per Post and says that they are one big target of the new regs.

Sidebar: Pay Per Post (PPP) connects advertisers and bloggers by subject matter. For instance, some company sells rhetoric textbooks, and they want to advertise those books. They find out through PPP that I've got a blog that talks about, among other things, rhetoric. They offer to give me copies of their books, and even to pay me through PPP, to blog about how great their books are. I've got an established blog, a built-in group of readers, and a history of being trustworthy.

I think Jarvis is right that one of PPP's real goals is to cheat Google's search process. Furthermore, I agree with him (and plenty of others), on the princpal of language policing, who are initially against FTC regulation in this way.

However, I think there's another reason, rooted in our assumptions of language, that the FTC should target not only PPP but also other blogs that endorse products without full disclosure. And really, the issue of disclosure seems to be the FTC's main focus: you want to endorse some product on your blog because the producer paid you? No problem; just be transparent. Admit that payola to your readers, thus implying the possibility of bias. However, there is an over-arching issue here, from a rhetoric standpoint, wrapped up in how/why readers trust blogs (and language in general), and it points to two terrible attitudes a reader can have: full-on trust or full-on relativism.

Full-on trust: You believe everything that you read, even the stuff that contradicts the other stuff. You take nothing with, as they say, a grain of salt. you never demand evidence in support of truth. You're slowly bled dry by people who realize that, if asked, you will give them money in exchange for a product or service.

Full-on relativism: You essentially trust nothing because you believe that everyone's opinion is right in their own special, little way, but nobody's opinion is as right as yours. You don't accept evidence, even when it's incontrovertible, in support of truth. Your favorite things to say include a dismissive "Whatever" and "Thas just, like, your opinion." You never really engage any academic or intellectual pursuit or seek any new knowledge, and your brain stays the same size it is now.

Or, we can realize a few things about humans and language use. First, it turns out that humans have opinions. Put another way, many philosophers argue that there is no such thing as objective information. Subjective information can still be useful, though, when it's supported by good evidence (logos). Secondly, Jarvis argues that the Internet is not a medium. He says that "it’s a place where people talk. Most people who blog, as Pew found in a survey a few years ago, don’t think they are doing anything remotely connected to journalism." I like Pew's claims about blogs and journalism, but I think that Jarvis is wrong. As I've argued before, blogs represent a special hybridized delivery system for meaning. By definition, that kind of delivery system is a medium. The material of that medium is language. The language of blogs comes from humans. Humans have opinions. The circle is complete.

Seriously though, the rhetoric skills we work on, especially our critical reading skills, create in our brains a better ability to search language for meaning. However, the percentage of readers who are overly trusting or overly relativistic seems to be huge and growing, from my perspective. If that's the case, what's the harm in FTC regulation of language? A compromise to our First Amendment right of free speech? News flash: those rights are already compromised. There are lots of things people aren't allowed to say (or show), and those limitations exist in part because of how readers/audiences interpret meaning (or fail to).

Readers tend to both trust and dismiss blogs by default (there's part of that hybridity in action). When we read something on a blog, I think we either assume that it comes from a trustworthy, unbiased source (often because it's in-line with our own opinions), or we dismiss it because, well, any crackpot can put anything on the web (or, more truthfully, because it is not in line with our opinions). Why do we trust or distrust these sources? Because blogs have some kind of punk-rock, DIY, outside-of-the-mainstream-media ethos?

No, no, no, I warn you. Our discerning eyes must depend not merely on ethos, but also on logos and the occasional smattering of pathos. If bloggers are paid to endorse a product, they should be compelled to admit that inforamtion. However, if we are going to read blogs, we should compel ourselves to use our critical reading skills to discern merit and truth. If we can't (or don't want to) compel ourselves in that way, maybe we shouldn't be reading.