Google Gamble, The

From Zanecorpwiki

The Google Gamble: Break the existing the intellectual property laws so completely that they must be remade in order to legitimize what Google's already doing. Google thereby owns the markets created by those changes.

Talking with a music lawyer today, I heard that Google had increased their "liability account" out of which they expect to settle lawsuits resulting (primarily) from YouTube to over $1 billion. Why acquire a company that hemorrhages money, has no clear path to profitability, and exposes you to (theoretically) billions, if not trillions in liability? The simple answer is that there is no good answer and that Google is simply the last expansion of the Silicon-Valley-"It's-a-new-economy"-Tech-Bubble bullshit.

Is it possible that the poster child for success in the Internet age is really just an over-valued liability buoyed by our collective unwillingness to admit how dumb we all our? Absolutely. In fact, Ockham would probably leave it at that.

Google is a mirage, but they're also brilliant... maybe. Is Google a mirage? A bubble? An overvalued liability? Really, we have to say it is. There's no way out of it. Yes, they have the online ad market, which they dominate to the point of being the only real game in town. Yes, that's an important market. Yes, it' may even be big enough to offset everything else that Google's doing, but even granting all that, we have to say that everything else that Google is doing adds up to a net negative by any established standard.

That's the mirage. Does Google believe in the mirage, or are they simply using our collective (suspension of) belief to their advantage? Either way, I think Google may stumble into tremendous success. Whether it's dumb luck or amazing insight is a harder question, and in all likelihood one we'll never have the answer to.

Either way, here's the genius (or luck) of Google's seemingly irrational business:

1. bet that existing IP law runs counter to our cultural interests
2. bet that existing IP law runs counter to our collective economic interests (is non-market driven)
3. harness mainstream discontent, largely stirred up by "Big Musics" absolutely ludicrous bungling of digital music^{[notes 1]}
4. harness technorati discontent, largely stirred up the DMCA
5. harness size and success

Break the law on a massive scale^{[notes 2]} so blatantly and prolifically that Congress is forced to rewrite the laws exactly how you want them or risk being unmasked as ineffectual and irrelevant.

Sound crazy? Google's already winning.

Google is the single biggest beneficiary of the safe harbor and "take down" provisions existing legislation which basically shift (at least the presumption) of blame from Google. These laws are written specifically to legitimize what is clearly--at least in terms of theoretical dollar amount^{[notes 3]}--a massive, flagrant, and ongoing violation of US IP laws.

Google is literally rewriting US IP laws. Content owners now allow their videos on YouTube because it's a way to get exposure and we all say, "new media", "guerrilla marketing," and applaud them for "getting it", but at the end of the day--whether or not it's good or bad, right or wrong--they make their content available because they have to. Because if they don't, they're are literally thousands of individuals who'll do it for them. They have no choice. Google (and uppers^{[notes 4]}) have token the choice away. They've made the new world by fiat.

Now that we all live in this new world, we rationalize how great it is and how improved things are. Personally, I believe that they great and this new world is better, and there's fuck all that entrenched minority interests can do about it. But that doesn't change the fact that we are here, where we are today, but for the grace of Google.

There's no question that Google relies on society to do much of the heavy lifting, but society provides the potential. Google (consciously or not) uses it's unique position in all this to direct that potential and in-so-doing is carving out a highly lucrative space for itself.^{[notes 5]}

Notes

1. ↑ Big Music isn't destroyed or made irrelevant or anything nearly so poetic as all that. The ludicrous part is that they could have very easily transitioned to something like iTunes 10+ years ago and remained in control, with a larger slice of the pie and it wouldn't have taken anything revolutionary or even mildly creative. All they had to do was go along with the market.
2. ↑ The most prolific file-sharer and music-down loader could not hope to break the law as many times in their life as YouTube does in a day, and yet Google goes largely untouched. There are cases in court, and most likely others pending, but the mainstream focus has always been on the individual down loaders sued by the brain dead RIAA.
3. ↑ Of course, copyright violation fines are clearly ludicrous. 5 years in jail for making a copy of a $5 DVD? Such a regime only serves to legitimize as a "just criminal" against an obviously insane and ultimately impotent entrenched aristocracy.
4. ↑ What do you call someone that just loves to upload shit for the hell of it?
5. ↑ There's no need or reason to ascribe any virtuous intent to Google's actions: profit motive explains everything.