Thursday, June 27, 2013

Economics of Evil

Back in March Google announced that this weekend is the end of Google Reader, the service many bloggers and journalists used to use to read online content via RSS. This wasn't the first service Google killed, but because the people who used the service write for the Web, the announcement sparked a lively discussion. Because many people believe that commercial content platforms and storage services will preserve digital content for the long term, the discussion below the fold should be of interest here.

Paul Krugman commented:
Google’s decision to shut down Google Reader has ... provoked a lot of discussion about the future of web-based services. The most interesting discussion, I think, comes from Ryan Avent, who argues that Google has been providing crucial public infrastructure — but doesn’t seem to have an interest in maintaining that infrastructure.
The Ryan Avent post at The Economist's Free Exchange blog that Krugman linked to pointed out that dependence on Google's services has a big impact on the real world:
Once we all become comfortable with [Google's services] we quickly begin optimising the physical and digital resources around us. Encyclopaedias? Antiques. Book shelves and file cabinets? Who needs them? And once we all become comfortable with that, we begin rearranging our mental architecture. We stop memorising key data points and start learning how to ask the right questions. We begin to think differently. About lots of things. We stop keeping a mental model of the physical geography of the world around us, because why bother? We can call up an incredibly detailed and accurate map of the world, complete with satellite and street-level images, whenever we want. ... The bottom line is that the more we all participate in this world, the more we come to depend on it. The more it becomes the world.
Avent described Google's motivation for providing the infrastructure:
Google has asked us to build our lives around it: to use its e-mail system ..., its search engines, its maps, its calendars, its cloud-based apps and storage services, its video- and photo-hosting services, ... It hasn't done this because we're its customers, it's worth remembering. We aren't; we're the products Google sells to its customers, the advertisers. Google wants us to use its services in ways that provide it with interesting and valuable information, and eyeballs.
So, Google may have good reasons for killing some services:
It's a big company, but even big companies have finite resources, and devoting those precious resources to something that isn't making money and isn't judged to have much in the way of development potential is not an attractive option. ... Someone else will come along to provide the service and, if they give it their full attention, to improve it.
And indeed alternate services such as Feedly are taking over. The only push-back for Google is weak:
But that makes it increasingly difficult for Google to have success with new services. Why commit to using and coming to rely on something new if it might be yanked away at some future date?
Google only partially mitigates this through their Data Liberation Front, whose role is to ensure that users of their services can extract their data in a re-usable form. But there remains a problem for society:
That's a lot of power to put in the hands of a company that now seems interested, mostly, in identifying core mass-market services it can use to maximise its return on investment.
What this implies is that Google is becoming an essential utility:
the history of modern urbanisation is littered with examples of privately provided goods and services that became the domain of the government once everyone realised that this new life and new us couldn't work without them.
Paul Krugman described the economics underlying this:
even in a plain-vanilla market, a monopolist with high fixed costs and limited ability to price-discriminate may not be able to make a profit supplying a good even when the potential consumer gains from that good exceed the costs of production. Basically, if the monopolist tries to charge a price corresponding to the value intense users place on the good, it won’t attract enough low-intensity users to cover its fixed costs; if it charges a low price to bring in the low-intensity user, it fails to capture enough of the surplus of high-intensity users, and again can’t cover its fixed costs.

What Avent adds is network externalities, in which the value of the good to each individual user depends on how many others are using it. ... they mean that if the monopolist still doesn’t find it worthwhile to provide the good, the consumer losses are substantially larger than in a conventional monopoly-pricing analysis.

So what’s the answer? As Avent says, historical examples with these characteristics — like urban transport networks — have been resolved through public provision. It seems hard at this point to envision search and related functions as public utilities, but that’s arguably where the logic will eventually lead us.
It is indeed hard to envision these services as public utilities; they are world-wide rather than national or local, and the communication infrastructure on which they rely, despite being utility-like, is provided by for-profit, lightly regulated companies.

What does this mean for digital preservation?
  • "Free" services, such as Google Drive, in which the user is the product rather than the customer should never be depended upon. At any moment they may suffer the fate of Google Reader and many other Google services; because the user is not the customer there is essentially no recourse.
  • Over time any business model for extracting value from content will become less and less effective. There are several reasons. Competitors will arise and decrease the available margins. As content accumulates, the average age of an item will increase; it is easier to extract value from younger content. Thus the service is continually in a race between this decreasing effectiveness and the cost reduction from improving technology such as Kryder's Law for storage. Once the cost reduction fails to outpace the value reduction the service is probably doomed. So the slowing pace of storage cost reduction is likely to cause more casualties, especially among those services that accumulate content.
  • Because archived content is rarely accessed it generates little valuable information and lacks network effects, making it a poor business for the provider. This casts another shadow over the future of free or all-you-can-eat storage services.
  • Although the user of services such as Google Cloud Storage and S3 is a paying customer, digital preservation will be a very small part of the service's customer base. Thus the incentives for the service provider to continue or terminate those aspects of the service that make it suitable for digital preservation will not be greatly different from those of a free service.
  • Because digital preservation is a relatively small market, services tailored to its needs will lack the economies of scale of the kind of infrastructure services Avent and Krugman are discussing. Thus they will be more expensive. But the temptation will always be to implement them as a thin layer of customization over generic infrastructure services, as we see with Duracloud and Preservica, to capture as much of the economies of scale as possible. This leaves them vulnerable to the whims of the infrastructure provider. See also my comment on on-demand vs. base-load economics.


  1. Marco Arment convincingly tells the depressing story of why Google Reader had to die. It was distracting from the Google + vs. Facebook battle.

  2. Latitude is the latest casualty. again because it was not part of Google+.

  3. Scott Gilbertson at The Register writes about recovering from the death of Reader, riffing on the "If you're not paying for something, you're not the customer; you're the product being sold." quote. But he points out that "Just because you are paying companies like Google, Apple or Microsoft you might feel they are, some how, beholden to you." Dream on.

  4. Yet another Google service bites the dust, this time Helpout.

  5. Google Plus isn't quite dead, but it is on life support.

  6. "The link is very common on the web and was first launched by Google in 2009. However, the company announced today that it’s winding down the URL Shortener beginning next month, with a complete deprecation by next year." writes Abner Li at 9to5Google.

  7. The Allo messaging service is the next to enter the Google Memorial.

  8. G+ is on its way to the Google Memorial, and Lauren Weinstein is not happy with the reasons:

    "Google knows that as time goes on their traditional advertising revenue model will become decreasingly effective. This is obviously one reason why they’ve been pivoting toward paid service models aimed at businesses and other organizations. That doesn’t just include G Suite, but great products like their AI offerings, Google Cloud, and more.

    But no matter how technically advanced those products, there’s a fundamental question that any potential paying user of them must ask themselves. Can I depend on these services still being available a year from now? Or in five years? How do I know that Google won’t treat business users the same ways as they’ve treated their consumer users?"

    Nor is he happy with the process:

    "We already know about Google’s incredible user trust failure in announcing dates for this process. First it was August. Then suddenly it was April. The G+ APIs (which vast numbers of web sites — including mine — made the mistake of deeply embedding into their sites, we’re told will start “intermittently failing” (whatever that actually means) later this month.

    It gets much worse though. While Google has tools for users to download their own G+ postings for preservation, they have as far as I know provided nothing to help loyal G+ users maintain their social contacts — the array of other G+ followers and users with whom many of us have built up friendships on G+ over the years."

  9. Close behind G+ on the road to the Google Memorial is Hangouts and Ron Amadeo is skeptical:

    "Google previously announced that its most popular messaging app, Google Hangouts, would be shutting down. In a post today on the GSuite Updates blog, Google detailed what the Hangouts shutdown will look like, and the company shared some of its plan to transition Hangouts users to "Hangouts Chat," a separate enterprise Slack clone."

    Note that this is another instance of Google moving up a previously announced shutdown date. And, like Weinstein, Amadeo sees impacts on the Google brand:

    "Google's argument seems to be that the transition plan makes everything OK. But clumsy shutdowns like this are damaging to the Google brand, and they undermine confidence in all of Google's other products and services."

  10. Ron Amadeo takes Google to the woodshed in Google’s constant product shutdowns are damaging its brand:

    "It's only April, and 2019 has already been an absolutely brutal year for Google's product portfolio. The Chromecast Audio was discontinued January 11. YouTube annotations were removed and deleted January 15. Google Fiber packed up and left a Fiber city on February 8. Android Things dropped IoT support on February 13. Google's laptop and tablet division was reportedly slashed on March 12. Google Allo shut down on March 13. The "Spotlight Stories" VR studio closed its doors on March 14. The URL shortener was cut off from new users on March 30. Gmail's IFTTT support stopped working March 31.

    And today, April 2, we're having a Google Funeral double-header: both Google+ (for consumers) and Google Inbox are being laid to rest. Later this year, Google Hangouts "Classic" will start to wind down, and somehow also scheduled for 2019 is Google Music's "migration" to YouTube Music, with the Google service being put on death row sometime afterward.

    We are 91 days into the year, and so far, Google is racking up an unprecedented body count. If we just take the official shutdown dates that have already occurred in 2019, a Google-branded product, feature, or service has died, on average, about every nine days."

  11. Of course, other companies shutter services too, just somewhat less irresponsibly. Cory Doctorow's Microsoft announces it will shut down ebook program and confiscate its customers' libraries reports:

    "Microsoft has a DRM-locked ebook store that isn't making enough money, so they're shutting it down and taking away every book that every one of its customers acquired effective July 1.

    Customers will receive refunds."

  12. And the next entrant for le petit musée des projets Google abandonnés is YouTube Gaming. Ron Amadeo reports:

    "YouTube Gaming is more or less shutting down this week. Google launched the standalone YouTube gaming vertical almost four years ago as a response to Amazon's purchase of Twitch, and on May 30, Google will shut down the standalone YouTube Gaming app and the standalone website."

  13. Take a number! Ron Amadeo reports that This week’s dead Google product is Google Trips, may it rest in peace:

    "Google's wild ride of service shutdowns never stops. Next up on the chopping block is Google Trips, a trip organization app that is popular with frequent travelers. Recently Google started notifying users of the pending shutdown directly in the Trips app; a splash screen now pops up before the app starts, saying "We're saying goodbye to Google Trips Aug 5," along with a link to a now all-to-familiar Google shutdown support document."

  14. Another product joins the queue of Google products waiting to get into le petit musée des projets Google abandonnés. Ron Amadeo reports:

    "Another day, another dead or dying Google product. This time, Google has decided to shut down "Hangouts on Air," a fairly popular service for broadcasting a group video call live over the Internet. Notices saying the service is "going away later this year" have started to pop up for users when they start a Hangout on Air. Hangouts on Air, by the way, is a totally different and unrelated service from "Google Hangouts," which is also shutting down sometime in the future."

  15. Lina M. Khan's The Separation of Platforms and Commerce discusses (Page 1071) one of last year's acquisitions by le petit musée:

    "The Justice Department’s remedies in the Google–ITA merger illustrate one instance of imposing an information firewall in a digital market. ITA developed and licensed a software product known as “QPX,” a “mini-search engine” that airlines and online travel agents used to provide users with customized flight search functionality. Because the merger would put Google in the position of supplying QPX to its rival travel-search websites, the Justice Department required as a condition of the merger that Google establish internal firewalls to avoid misappropriation of rivals’ information. Although one commentator highlighted the risks and inherent difficulties associated with designing a comprehensive behavioral remedy, the court approved the order.

    Whether the information firewall was successful in preventing Google from accessing rivals’ business information is not publicly known. A year after the remedy expired, Google shut down its QPX API."

  16. Jason Perlow's Google is a bald-faced IoT liar and its Nest pants are on fire is all about the effects of Google's sunset of the "Works With Nest" program on anyone unlucky enough to have non-Google devices in their home IoT ecosystem.

  17. Le petit musée just gained another exhibit, the corpse of Google Daydream, according to Emil Protalinski's obituary in Google discontinues Daydream VR.

  18. Le petit musée's reputation is getting noticed. In Stadia launch dev: Game makers are worried “Google is just going to cancel it”, Kyle Orland reports that:

    "Google has a long and well-documented history of launching new services only to shut them down a few months or years later. And with the launch of Stadia imminent, one launch game developer has acknowledged the prevalence of concerns about that history among her fellow developers while also downplaying their seriousness in light of Stadia's potential."

  19. Next year Le petit musée will accession another major exhibit. According to Stephen Hall, Google Cloud Print is dead as of December 31, 2020.

  20. It only too three days for Le petit musée's first accession of the New Year.Shelby Brown's Google News reportedly ends digital magazines, refunds active subscriptions. It was doomed because Google couldn't decide what to call it:

    "Google launched Play Magazines in 2012, and later renamed it Play Newsstand to focus on newspapers. The services later merged to Google News."

  21. And the next exhibit in Le petit musée' is [drumroll, please] Google Chrome Apps!

  22. At this rate le petit musée's acquisition budget for the year will be exhausted long before December! Only 12 days after the last one, comes the acquisition of App Maker.

  23. Ron Amadeo reports on the latest acquisition by the Petit Musee in RIP Google Play Music, 2011 – 2020.

  24. And another one bites the dust. Matthew Hughes provides the details of the latest from the Petit Musee in Stony-faced Google drags Android Things behind the cowshed. Two shots ring out.

  25. The hits keep coming! Cohen Coberly's Google's 'Cloud Print' service is shutting down soon celebrates the Petit Musée's latest acquisition. 27 exhibits in 7 years.

  26. The Petit Musée is going to need more space. In Google’s dream of flying Internet balloons is dead—Loon is shutting down Ron Amadeo writes:

    "Google has decided that a network of flying Internet balloons is indeed not a feasible idea. Loon announced it is shutting down, citing the lack of a "long-term, sustainable business.""

  27. Another acquisition for the Petit Musée! Ron Amadeo reports that Google is killing the Google Shopping app:

    "The Google Shopping app launched only 19 months ago, when it took over for another Google shopping shutdown, Google Express. The Google Shopping service has been a rough proposition for users—starting in 2012, it has been nothing but an ad vector that exclusively showed "paid listings" and no organic results whatsoever. This made some sense as a service that showed advertisements in little embedded boxes in search results, but it was unclear why a user would download an app that exclusively shows ads."

  28. I missed Alastair Westgarth's Saying goodbye to Loon back in January:

    "While we’ve found a number of willing partners along the way, we haven’t found a way to get the costs low enough to build a long-term, sustainable business. Developing radical new technology is inherently risky, but that doesn’t make breaking this news any easier. Today, I’m sad to share that Loon will be winding down."

  29. Katie Baker's The Day the Good Internet Died makes some excellent points:

    "And when Google Reader disappeared in 2013, it wasn’t just a tale of dwindling user numbers or of what one engineer later described as a rotted codebase. It was a sign of the crumbling of the very foundation upon which it had been built: the era of the Good Internet.
    The offering certainly was, over the course of its 2005 to 2013 existence, an ideal showcase for some of the web’s prevailing strengths at the time—one of which was the emergence of the blogosphere, that backbone of what the Good Internet could be.
    Google had purchased Blogger back in 2003, and in an interview with Playboy in 2004, founder Sergey Brin outlined a vision for his company that felt extremely bloggy: “We want to get you out of Google and to the right place as fast as possible,” he said. But nothing gold can stay, and as smartphones and tablets and apps and social networks began to supplement and then supplant the simple-text-on-a-desktop experience near the start of the 2010s, Google’s corporate frame of mind shifted ever-inward."

  30. Thomas Claiburn reports that Google Groups kills RSS support without notice:

    "Google has either turned off RSS support in Google Groups without telling anyone, or has failed to notice that RSS in Groups no longer functions."

  31. Ron Amadeo, a veteran of the Google abattoir, reports that Google is killing Android Auto for phones (if you even know what that is):

    "Google is shutting down "Android Auto for phone screens," which was an Android Auto offshoot for people who didn't have cars compatible with the service. 9to5Google confirmed the cancellation with Google, and XDA Developers spotted a shutdown message in the app pushing users to a newer Google car computing solution for phone screens: "Google Assistant driving mode." As usual, we have many similarly named Google projects to keep track of, so don't get confused!"

  32. Natasha Lomas reports on Le Petit Musée's latest acquisition in Google confirms it’s pulling the plug on Streams, its UK clinician support app:

    "Google is infamous for spinning up products and killing them off, often in very short order. It’s an annoying enough habit when it’s stuff like messaging apps and games. But the tech giant’s ambitions stretch into many domains that touch human lives these days. Including, most directly, healthcare. And — it turns out — so does Google’s tendency to kill off products that its PR has previously touted as “life saving”.

    To wit: Following a recent reconfiguration of Google’s health efforts — reported earlier by Business Insider — the tech giant confirmed to TechCrunch that it is decommissioning its clinician support app, Streams.

    The app, which Google Health PR bills as a “mobile medical device”, was developed back in 2015 by DeepMind, an AI division of Google — and has been used by the U.K.’s National Health Service in the years since, with a number of NHS Trusts inking deals with DeepMind Health to roll out Streams to their clinicians."

  33. It has been a while since the last acquisition at Le Petit Musée, but Ron Amadeo announces the next one in Google kills YouTube Originals, its original video content group:

    "Variety reports that Google's original video content group, YouTube Originals, is dead. The YouTube division was founded six years ago to make exclusive, original content for the pay-per-month YouTube Premium service. Now, the group is being shuttered, and YouTube's global head of original content, Susanne Daniels, is leaving the company in March."

  34. Ars Technica's correspondent from Le Petit Musée, Ron Amadeo, has an update in So nice they killed it twice: Google+’s business pivot is dead:

    "In the latest Google Workspace blog post, Google says that Currents is "winding down" starting in 2023. This is no surprise, since Google+ was a completely failed consumer product. Why Google thought pushing the dead service onto business would make Currents successful is unclear. (Hey, Google Stadia, does this sound familiar?) Google never really did anything with Currents after rebranding it as a business product. After rotting for years as a dead consumer product, Currents just rotted for a few more years with new business branding."

  35. Ron Amadeo comments:

    "By the way, the "Google Currents" mentioned here should not be confused with the earlier product called "Google Currents" which existed from 2011-2013 as a magazine app. Similarly, the "Spaces" product here should not be confused with the earlier "Google Spaces" messaging app, which existed for nine months in 2016."

  36. Simon Sharwood has the latest from Le Petit Musée in Google kills download-shrinking Lite Mode browser tech:

    "Google has announced that it's going to deprecate "Chrome Data Saver" – a feature added to the mobile version of its Chrome browser in 2014 to … wait for it … save data.

    When Google introduced Data Saver it revealed that it saved data by re-routing web requests through a SPDY proxy to optimize content, re-encoding images to shrink them, and even trimming the fat from carelessly-coded HTML, JavaScript and CSS. Enabling Data Saver – it was an opt-in feature – also saw traffic routed through Google's Safe Browsing filters that aimed to stop malicious webpages making their way into mobile devices."

  37. Katyanna Quach reports on Le Petit Musée's latest acquisition in Google says there's no Waze forward, carpool app axed:

    "Google is shutting down its Waze carpooling service apparently due to poor demand from workers commuting into the office – although road traffic has bounced back to levels from the start of the COVID-19 pandemic."

  38. Another exhibit for Le Petit Musée. Sarah Perez reports that Google cancels half the projects at its internal R&D group Area 120. Most of the victims had yet to see the light of day but:

    "One of the projects now being cut with the changes is Qaya, a service offering web storefronts for digital creators, launched late last year. Similar to “link in bio” solutions available today like Linktree or Beacons, Qaya additionally integrated with Google Search and Google Shopping. It could also be linked with a YouTube Merch Shelf, to promote the creator’s products and services."

  39. @petergyang tweets:

    "Google insiders explain why Google launches many products and then abandons them.

    Hint: It has to do with chasing promotions."

  40. Ron Amadeo reports that, after a long slow death, RIP Google Hangouts, Google’s last, best chance to compete with iMessage:

    "Google Hangouts is scheduled for death today. The phone app has been individually booting people off the service since July, but the last vestiges of Hangouts, the web app, will be shut down today."

    The article is a great indictment of Google's inability to, in Scott McNealy's words, get "all the wood behind one arrow". See this tweet.

  41. Le Petit Musée gains another exhibit in Ron Amadeo's YouTube Stories, Google’s clone of Snapchat, is dying on June 26:

    "YouTube's "copy the hot new video site" strategy is ending the way it often does—with a shutdown. This time it's killing off "YouTube Stories," a Snapchat clone the company launched in 2017 under the name "Reels" and later renamed to YouTube Stories in 2018."

  42. Alphabet Selling Google Domains Assets to Squarespace by Katie Roof is technically not an acquisition for Le Petit Musée because:

    "Squarespace said it will honor Google Domains customers’ renewal prices for at least 12 months following the close of the deal. Squarespace will also become the exclusive domains provider for customers who purchase a domain from Google along with their Workspace subscription, according to the statement."

  43. The Squarespace transaction inspired David Heinemeier Hansson to write You Can't Trust Google:

    "Google will eventually kill every single service you care about, if they can't find a way to directly monetize it with ads at a scale of billions. They're institutionally incapable of being in the product or service business, because neither products nor services butter Google's bread. Advertisement does.

    You can see this emphasis in a myriad of ways, but my favorite lens is customer service. Google has always been uniquely awful when it comes to customer service, because helping someone with a problem on Workspaces or even the Google Cloud Platform was never going to be as profitable as helping an advertiser carpet bomb your attention span."

  44. Ron Amadeo reports on the wait for Le Petit Musée's latest acquisition in Google announces April 2024 shutdown date for Google Podcasts:

    "Google Podcasts has been sitting on Google's death row for a few months now since the September announcement. Now, a new support article details Google's plans to kill the product, with a shutdown coming in April 2024.

    Google Podcasts (2016–2024) is Google's third attempt at a podcasting app after the Google Reader-powered Google Listen (2009–2012) and Google Play Music Podcasts (2016–2020). The product is being shut down in favor of podcast app No. 4, YouTube Podcasts, which launched in 2022."

  45. Mariella Moon reports that Google One is shutting down its VPN feature later this year:

    "If you're — apparently, one of the few people — using the VPN service that comes with Google One, we've got bad news for you. In an email you're going to receive from Google if you haven't gotten it yet, it revealed that it's phasing out the perk sometime later this year. The company rolled out Google One's VPN feature back in 2020, but you could only access it then if you're paying for a plan with at least 2TB of storage, which costs at least $10 a month. Last year, the company expanded its availability across all One plans, including the basic $2-per-month option, making it more affordable than before."