Google Apple: These Folks Like Geniuses and Numbers in the 30s
November 13, 2023
This essay is the work of a dumb humanoid. No smart software required.
The New York Post published a story which may or may not be one the money. I would suggest that the odds of it being accurate are in the 30 percent range. In fact, 30 percent is emerging as a favorite number. Apple, for instance, imposes what some have called a 30 percent “Apple tax.” Don’t get me wrong. Apple is just trying to squeak by in a tough economy. I love the connector on the MacBook Air which is unlike any Apple connector in my collection. And the $130 USB cable? Brilliant.
The poor Widow Apple is pleading with the Bank of Googzilla for a more favorable commission. The friendly bean counter is not willing to pay more than one third of the cash take. “I want to pay you more, but hard times are upon us, Widow Apple. Might we agree on a slightly higher number?” The poor Widow Apple sniffs and nods her head in agreement as the frail child Mac Air the Third whimpers.
The write up which has me tangled in 30s is “Google Witness Accidentally Reveals Company Pays Apple 36% of Search Ad Revenue.” I was enthralled with the idea that a Google witness could do something by accident. I assumed Google witnesses were in sync with the giant, user centric online advertising outfit.
The write up states:
Google pays Apple a 36% share of search advertising revenue generated through its Safari browser, one of the tech giant’s witnesses accidentally revealed in a bombshell moment during the Justice Department’s landmark antitrust trial on Monday. The flub was made by Ken Murphy, a University of Chicago economist and the final witness expected to be called by Google’s defense team.
Okay, a 36 percent share: Sounds fair. True, it is a six percent premium on the so-called “Apple tax.” But Google has the incentive to pay more for traffic. That “pay to play” business model is indeed popular it seems.
The write up “Usury in Historical Perspective” includes an interesting passage; to wit:
Mews and Abraham write that 5,000 years ago Sumer (the earliest known human civilization) had its own issues with excessive interest. Evidence suggests that wealthy landowners loaned out silver and barley at rates of 20 percent or more, with non-payment resulting in bondage. In response, the Babylonian monarch occasionally stepped in to free the debtors.
A measly 20 percent? Flash forward to the present. At 36 percent inflation has not had much of an impact on the Apple Google deal.
Who is University of Chicago economist who allegedly revealed a super secret number? According to the always-begging Wikipedia, he is a person who has written more than 50 articles. He is a recipient of the MacArthur Fellowship sometimes known as a “genius grant.” Ergo a genius.
I noted this passage in the allegedly accurate write up:
Google had argued as recently as last week that the details of the agreement were sensitive company information – and that revealing the info “would unreasonably undermine Google’s competitive standing in relation to both competitors and other counterparties.” Schmidtlein [Google’s robust legal eagle] and other Google attorneys have pushed back on DOJ’s assertions regarding the default search engine deals. The company argues that its payments to Apple, AT&T and other firms are fair compensation.
I like the phrase “fair compensation.” It matches nicely with the 36 percent commission on top of the $25 billion Google paid Apple to make the wonderful Google search system the default in Apple’s Safari browser. The money, in my opinion, illustrates the depth of love users have for the Google search system. Presumably Google wants to spare the Safari user the hassle required to specify another Web search system like Bing.com or Yandex.com.
Goodness, Google cares about its users so darned much, I conclude.
Despite the heroic efforts of Big Tech on Trial, I find that getting information about a trial between the US and everyone’s favorite search system difficult. Why the secrecy? Why the redactions? Why the cringing when the genius revealed the 36 percent commission?
I think I know why. Here are three reasons for the cringe:
- Google is thin skinned. Criticism is not part of the game plan, particularly with high school reunions coming up.
- Google understands that those not smart enough (like the genius Ken Murphy) would not understand the logic of the number. Those who are not Googley won’t get it, so why bother to reveal the number?
- Google hires geniuses. Geniuses don’t make mistakes. Therefore, the 36 percent reveal is numeric proof of the sophistication of Google’s analytic expertise. Apple could have gotten more money; Google is the winner.
Net net: My hunch is that the cloud of unknowing wrapped around the evidence in this trial makes clear that the Google is just doing what anyone smart enough to work at Google would do. Cleverness is good. Being a genius is good. Appearing to be dumb is not Googley. Oh, oh. I am not smart enough to see the sheer brilliance of the number, its revelation, and how it makes Google even more adorable with its super special deals.
Stephen E Arnold, November 13, 2023
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