Something for Nothing

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Paul Jacob stresses an amusing little point about one of the things that makes capitalism great, as applied to Google.

Here I am, using Google for free. I've contributed nothing to its effort . . . unless curious well- and ill-wishers looking my name up on the search engine counts.

I couldn't be happier. I get a great service. And Google makes money . . . off of other people.

So, when I hear someone complaining about big, greedy companies, I shake my head. There are a number of companies I get free goods off of all the time. And, unlike the government, they don't come knocking on my door demanding payment just because I get some benefit….If Google were a government service, I'd be called a "free rider." My very existence would be something of a scandal to political philosophers and economists.

Slackers and freeloaders and Subgenii everywhere can delight even more in great public benefits, such as YouTube or MySpace, that actually are so far merely losing big money for the big money boys while providing, at least for now, a delightful public good.

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  1. Here I am, using Google for free. I’ve contributed nothing to its effort…

    If google uses your searching habits as part of its algorithm to determine how to display its results, then you are not entirely a free loader. You habits have an economic value to google in helping it deliver it’s product.

  2. Of course, not all big, greedy companies are created equal. Ever get accused of stealing TV because you skip commercials with your Tivo?

  3. Using Google does not constitute getting free “goods.” It’s more like watching free TV, and also a bit like high-pressure time-share sales. You get free entertainment or a free vacation, but you agree to a sales pitch in some form. Plus, you might get services for free, but goods of any value are another thing.

  4. … and Google doesn’t have a pledge week!

  5. Google is not free. There is no such thing as a free lunch, or search.

  6. The e-mail address I recieved from hotmail.com for free is of great value to me.

  7. Paul Jacob stresses…

    …that he knows very little about Google’s business model.

    As others have said upthread — watching brodcst TV would make us all freeloaders by this line of thinking. (And broadcast TV doesn’t even really get to view our individual viewing habits — they have to pay Nielsen for that — whereas with Google it’s built right in)

  8. What about Google’s business model does he not understand? He explains that he is getting something that he is not paying for, and that other people (advertisers) are. Lamar’s vision of an economic good is strangely blinkered, and has nothing to do with what provides most of us with what we subjectively value in this life.

  9. Since I can blithely ignore the ads on Google (unlike with Tivoless TV), and the costs to me–to the extent that they even exist–are invisible, it is, for all intents and purposes, free to me.

    And if anyone wants to suggest that Google’s service doesn’t have a high, intrinsic value, well, let me suggest that you haven’t been paying attention the last ten years.

    This reminds me of newspapers, a bit. They come loaded with ads, but the ads don’t bother me. I just skip them altogether, unless I happen to want to look at them on rare occasion. The greatest cost to me is the effort in throwing out the inserts. Big deal. And, considering that I can read most papers on-line for free (saving me the $0.25-0.50 the print edition would cost me), it’s an even better deal.

    There are other areas in life where we benefit in some way by other people spending their money. For instance, banks can offer lower rates on loans because they have “free” or low-cost money to loan in the form of deposits. The depositors don’t keep their money in the bank for me or even for the bank, but I do benefit indirectly because the bank has a lower cost of funds and can, therefore, charge a lower rate.

  10. Brian,

    what gaijin said. It’s not a free service, because my data is being used — so I am contributing every time i run a search. It may a very minor contribution, but in the aggregate over the course of many users over time, the contribution becomes bigger. Furthermore, the more people use them, the more they can up their advertising fees. SO again — we are not free loaders in any sense of the word.

    we might not be paying for the service directly as it is being subsidized by revenue — but we are providing them data and marketability in exchange for the user of their service which gives them the ability to generate revenue.

    They get something from us and we get something from them. It may be a dirt cheap bargain basement priced lunch, but it isn’t technically free. (Just like network TV isn’t free if I have to watch the advertisements — time is money the saying goes correct?. Just because we aren’t paying with dollars doesn’t mean that the cost of our time and effort should be ignored)

  11. Just like with TV and radio, the audience IS the product Google sells to advertizers.

  12. what gaijin said. It’s not a free service, because my data is being used — so I am contributing every time i run a search. It may a very minor contribution, but in the aggregate over the course of many users over time, the contribution becomes bigger.

    While this is true, we’re getting into nitpicking and missing the larger point. Yes, there is no such thing as a free lunch. But the term ‘free’ in the ‘no free lunch’ is a broader term- really applying to ‘output’ and ‘effort’. The OP is referring to ‘free’ in a more literal sense: no money comes out of his pocket. When you compare the service that Google provides to the ordinary user, compared to the outlay of cash from that same ordinary user, the mind boggles at what modern Capitalism can bring into the home. The end result: More for less.

    What Google is doing is using my ‘effort’ and ‘output’ to help shape its search technology. But my ‘effort’ and’output’ is something that I want to do, regardless of Google’s benefit from said output. It would be like getting gas magically put in your car everytime you took a step. Yes, you must physically walk to get some gas put into your car, but you’re going to be walking anyway.

    Before operations like Google, many of us had the same desire to search out information before, but the ‘output’ we had to make, vs the ‘return’ from the systems we had in place “libraries/newspaper archives” was reversed. To research a subject took effort, money, time, access to quality archives, knowledge as to how to best search disparate systems, having to deal with surly record-keeping employees…. you get the idea.

  13. There’s another great free service people take advantage of on the web–it’s called Hit & Run.

    I used to buy Reason on my favorite newstand, but it seems to have disappeared lately. …maybe the stand’s sellin’ ’em all out before I get there. …either that or I may have to subscribe after all.

  14. ChicagoTom,

    The dollar value attached to any individual’s information is probably quite low. Not to mention that there would be a tremendous cost to Google–perhaps to its destruction–if it started selling individually identifiable searches and preferences to third parties. Aggregated data is another matter altogether, but, as I said above, the individual value to that aggregated data ain’t much.

    I do agree that it would be hard to characterize the users as freeloaders. Without us, Google has virtually nothing to sell. In fact, it wouldn’t exist.

  15. Paul and ProL,

    I agree with what you guys are saying. I am not attacking Google or what they do. In fact the model is one I fully support. My problem is that in the post, Paul Jacob equates google users with “free riders”. We are not free riders any more than broadcast TV viewers. We ARE their value.

    If everyone who used Google suddenly switched to Yahoo — would Google continue to get paid by advertisers and continue offer the same suite of free services? That to me would be the test of who is a free rider. A free rider is someone who, if they stopped riding, would not harm the company or its revenue stream / bottom line. Google users who don’t pay for the search service are hardly in this category.

  16. For Paul Jacob’s next trick, he’ll show that all women are Heidi Klum.

  17. My problem is that in the post, Paul Jacob equates google users with “free riders”.

    RTA. “If Google were a government service, I’d be called a “free rider.” My very existence would be something of a scandal to political philosophers and economists.”

    I usually use Alta Vista for free. Economic nit-picking aside, the searches are free because I don’t have to give AV anything I value enough to consider it “payment.”

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