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Pulling back the curtain on Google’s monopoly

Advertising is the lifeblood of modern media – oh wait, sorry, I thought it was 1985 for a second. By now the story of how the Internet destroyed the revenue model for newspapers might as well be carved in stone. But did you know that classified ads accounted for a large majority of newspaper revenue? Display ads had a share, but the number of classified ads a newspaper could print, among other things, made them the cash cow. Then Craigslist came around and knocked newspaper’s milkshake into the dirt, punched it in the balls and sped off in a Ferrari.

In today’s advertising game, Google has far surpassed Craigslist in reach and power;  as a small business owner I can tell you it has a stranglehold on a startup’s ability to reach a digital audience. When we started Decential Media in 2021 we thought the content of our stories, podcasts and films would gain a good following through organic search. That was one of the dumbest mistakes I’ve made, as I learned last year when we finally began paying Google to rank us as sponsored in crypto news search results. Prior to bowing to the Google god, and being an idiot, I couldn’t understand why we were getting on average about 200 visitors to the web site per day.

The moment the Google ad campaign began our site traffic went 10x. A few months later it was 100x. It was as though all the journalism and storytelling we’d done for more than a year was invisible until we started paying Google to spotlight it. No one tells you about this in journalism school, do they, University of California at Berkeley?

Ok, so we’ve established you have to pay to play with Google. Next is once your audience is built to a certain degree you start featuring ads on the site to bring in some cash. Once again, you will be knocking on Google’s door, specifically their AdSense unit. This is a mostly automated ad server that shows random ads on your site, or maybe it “learns” over time to cater to a specific demographic. Like crypto. And has anyone told you how much Google hates everything to do with crypto?

Holy crap, it’s bad. You can practically see the Google lawyers just on the other side of your laptop screen, bulging and writhing like something out of Poltergeist, getting a sniff of that crypto filth on you. They cannot – will not – facilitate anything to do with the scams and grift of those dirty digital assets. Even if you’re a media company simply writing about the people in the web3 industry. I’ve lost track of how many times Google has shut down our ad campaign for one nonsense reason or another. Many times, they’ve decided that Decential Media is offering complex financial products and needs to register as a cryptocurrency exchange.

Or Google says since we are a cryptocurrency exchange, you need to provide us copies of all the regional regulatory approvals you have – you know, from the EU, Singapore, the UK and U.S. Then they might shut you down because they say the code you added to the site to run the advertising to make the money is malware. I’m dealing with this currently. Do you remember when Google’s motto was “don’t be evil”? I do. I remember that.

This is a longish way of saying one of my greatest hopes for crypto and blockchain tech is to disintermediate the entrenched Googles of the world. This is a stated purpose of digital assets almost to the letter in the Bitcoin and Ethereum white papers. Peer to peer is a powerful tool. If done well there are so many rent-seeking industries that will be radically reshaped.

Hold on,  I’m sorry, I’m not done with Google yet. I’m still pissed. So I’m just going to give you a quote.

“Filed in the U.S. District Court for the Eastern District of Virginia, the complaint alleges that Google monopolizes key digital advertising technologies, collectively referred to as the ‘ad tech stack,’ that website publishers depend on to sell ads and that advertisers rely on to buy ads and reach potential customers.” That’s the Justice Department in its lawsuit against the monopoly in Jan. 2023. “Through this monopolization lawsuit, the Justice Department and state Attorneys General seek to restore competition in these important markets and obtain equitable and monetary relief on behalf of the American public.”

A-frickin-men to that.

Okay, back to the crypto stuff. A facet of decentralization that might have slipped your notice is this – it’s naturally anti-monopolist. The power in a decentralized network is horizontal, not vertical. It’s a collective effort to create a secure underlying layer that programmers can build on. There’s no single point of failure and if power begins to accrue in what looks like a monopolization it will be well-known and public. Another way of thinking of this is that the middleman in blockchain-based applications is code. Code doesn’t need to take a 30 percent cut of every transaction. It doesn’t need to increasingly gouge its users once they reach critical mass and monopoly forces begin to be exerted. Code just needs to be maintained so it can keep on telling the Googles of the world where they can go.

This is more important than this cheap schtick. I was speaking to Paul Brody about this (I keep quoting him because he’s one of the clearest thinkers on where web3, and Ethereum specifically, is headed. You should seek him out.) In a paraphrased nutshell, what he said to open my eyes to this decentralization scheme was that centralized powers that have a digital footprint – like Uber, and this is my example, Paul didn’t name names – will naturally tend to monopolize a market when they  have more demand than supply for their service. Uber had the big first-mover advantage in ride-sharing. So then more riders begin to use Uber and its market power grows. It grows until now it can extract more value from its users by ramping up the fees it takes from every ride.

As described above, decentralized networks work differently. So Paul Brody’s thesis is that, over time, Ethereum will disperse value across millions of companies, leading to lower costs for users and more money to service providers like Uber drivers or advertising-services buyers. If 30 percent is regained by Ethereum kicking out the middleman, that money has to go somewhere. It appears that as time goes on and the ecosystem matures that that value is going to go directly to people. Meaning Ethereum and its native token Ether might not benefit from the network’s paradigm shifting ability.

This kinda sucks. I want everyone who understood Ethereum early and took a risk on it to keep benefitting from a big gain in the price of Ether. (Not talking about ETH co-founders here, those folks are silly rich). But if this means that a Google competitor that’s decentralized and ruled by code can dish me some advertising service, I say bring it on. — Matthew Leising, editor in chief, Decential Media

Have you read the definitive history of Ethereum? No? Well then get your copy of Out of the Ether while you can.