The spin applied by tech companies

What are you willing to share to get something in return? The answer to this question may be very relevant to the future of several companies – Google, Apple, and Microsoft.

Are you willing to share data derived from your online behavior? This seems to be shaping up as a dividing line newly promoted by these companies to differentiate themselves and attract users and their money. (The New Yorker offers their analysis).

Here is how the companies spin their positions. Google wants you to believe that it collects information about you to provide you better online experiences. The more Google knows, the more helpful it can be. Do you want random ads or do you want ads that address personal interests? (No open consideration of whether you want ads at all). Apple and Microsoft, in contrast, vow to protect your privacy. The use of data derived from your online behavior is described as a privacy issue.

I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information.

Guess who – Tim Cook

When I attempt to understand the decisions of technology companies, I ask myself “What are the business model?” We know what these companies offer. Microsoft sells software and some might argue services. Apple sells you hardware, some software, and access to content and services developed by other companies. Google sells a few services and access to other companies content and software, but mostly it sells ad impressions.

These companies do offer users some “no cost” incentives. Microsoft gives away some cross-platform services (One Note, Bing search). Apple gives away some software to Apple users (the OS and productivity apps), but is very limited in cross-platform opportunities. Google gives away many cross-platform services.

You are a user? What do you want? Do remember the Stones’ song – You can’t always get what you want (but if you try some time, you can get what you need)? This actually good advice and should be heeded in this situation. An acceptable answer to the question of what do you want should not be – I want stuff for free. A better answer might be – I want reasonably priced goods and services and not to be taken advantage of in order to obtain what I need.

Apple’s present gamble is that it can do locally on a device what Google does with machine learning and the Google cloud. Apple understands the importance of personalization, but intends to develop a different approach. Rather than collect information based on your behavior, store these data in the cloud and then personalize services based on what appear to be your priorities, Apple intends to keep your data on your device to convince you that your data are not being shared or used for other evil purposes. If developed by Apple using this approach, a service comparable to Google Now could offer useful information related to personal needs without sharing the personal priorities the system determined with Apple. I suppose Apple assumes you view ads as a nuisance you could do without and can search when you want information about a product or service. Apple also assumes you can do without free Google services and will find other services as a substitute. I also suppose it is possible Apple may believe it can offer similar free services if providing such services further reduced interest in what Google offers. This last possibility has yet to materialize as Apple has not been able to develop credible cloud services to this point.

What about Microsoft? A similar logic might apply. Microsoft now promotes its combination of free and paid services (and software) by assuming you are willing to pay for some things in compensation for not having to share personal information.

If you are willing to give up your Google services what is it you assume? I suggest you assume Apple will be able to actually create the device based “personal priority and needs” approach it claims to be developing and that Apple will get far better at cloud services.

The “nuclear option” for anti-Google companies is to build in default mechanisms for blocking ads. At present, if Google can show no ads it would not have enough alternative revenue streams to stay afloat. Customers taking advantage of this “privacy” opportunity and not understanding what they get in the trade for their information could possibly ruin Google. Of course, it is more complicated than just Google vs. Apple and Microsoft. Removing ads, also removes an incentive for many who offer content for free. Those offering content would need other incentives for doing so and the consequences of these other incentives are unclear.

Why do I care? While I understand the general motive of companies to acquire as much of the pie as possible, I do not see a system with few players as great for consumers. I think greater awareness of how companies make money is important. How you or I interpret these finance models is important? It is possible to spin whichever approach you choose to attack? Apple’s model involves overpricing locking users into software and services that may not be the best available. Apple supports blocking ads that were intended to appear by the authors of content. Google uses data about user behavior.

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