Larry and Sergei's Exit from Google: How did they get from 'Don't Be Evil' to 'Get Rich or Die Trying'?

Larry Page and Sergey Brin have left the building.

The two founders who built the information empire Alphabet Inc. have left Google. As they noted in their farewell post, Sundar Pichai will now become CEO of both Google and Alphabet Inc. They also pocketed a couple billion or so for their troubles.

I write this post with mixed feelings.

As someone who started at university the year the Internet became commercialized, I witnessed the rise of Google from a number of many search-engine to the only one that you use. And I've written previously about this experience.

But reality is reality: Google doesn't look like the company it used to be.

They began with their motto: "Don't be evil". As noted here the idea, per Paul Buchheit (Googler #23). was not to be evil like "those other companies":

"It just sort of occurred to me that “Don’t be evil” is kind of funny. It’s also a bit of a jab at a lot of the other companies, especially our competitors, who at the time, in our opinion, were kind of exploiting the users to some extent."

And now it's arguable that Google has become one of "those other companies".

In fact, they officially abandoned the "Don't be evil" motto to the less aspirational "do the right thing."

Sure, we could hypothesize that the legal, risk and other compliance experts advised Google to abandon this slogan due to risk aversion. But the problem with that theory is that Google has been raking up the fines, not in the millions but in the billions.  According to The Verge, "Google’s total EU antitrust bill now stands at €8.2 billion ($9.3 billion)". Not sure how that fits in with "doing the right thing". Perhaps it has more to do with "get rich or die trying".  It's no wonder politicians think they can get votes by promising to break up Google and the other tech giants. 

But the fines are just the tip of the iceberg. Google was one of Obama's top campaign contributors in the 2012 election. As noted in this article by the Intercept, the coziness between Google and the Whitehouse went beyond just the election. They visited the Whitehouse 128 times over Obama's tenure. More troubling:

"Most notably, Google has faced questions for years about exercising its market power to squash rivals, infringing on its users’ privacy rights, favoring its own business affiliates in search results, and using patent law to create barriers to competition. Even Republican senators like Orrin Hatch have called out Google for its practices.

In 2012, staff at the Federal Trade Commission recommended filing antitrust charges after determining that Google was engaging in anti-competitive tactics and abusing its monopoly. A staff report that was later leaked said Google’s conduct “has resulted — and will result — in real harm to consumers and to innovation in the online search and advertising markets.”

The Wall Street Journal noted that Google’s White House visits increased right around that time. And in 2013, the presidentially appointed commissioners of the FTC overrode their staff, voting unanimously not to file any charges.

Jeff Chester, executive director of the Center for Digital Democracy, said the administration “has been a huge help” to Google both by protecting it from attempts to limit its market power and by blocking privacy legislation. “Google has been able to thwart regulatory scrutiny in terms of anti-competitive practices, and has played a key role in ensuring that the United States doesn’t protect at all the privacy of its citizens and its consumers,” Chester said."

So now they are using their capital to subvert laws and investigations to maintain their dominance.

What happened? Why did Google take a taxi ride to the dark side? 

Tim Wu, a Columbia law professor, has a theory.

In The Master Switch, he calls this type of thing the Kronos Effect. The idea is that yesterday's scrappy start-up - who defeated the evil ogre's of their day - only to becomes today's evil ogre. For example, he explains how Adolph Zukor and the other avant-garde filmmakers of his day fought the tyrannical Motion Picture Patents Company, which required you to pay royalties for just using a camera. Who did they end up becoming? The major studios of today - who sue people for copyright infringement of their content. Similarly, we can see Google, who was able to defeat Yahoo, Microsoft and others, has become arguably the Microsoft of our times.

But I think Douglas Rushkoff, ironically in Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity, has a better theory. 

When start-ups that emerge from the "operating system of Capitalism" the end-up being defined by that system's code or DNA: growth, profits, market share and shareholder value - these are the only things matter. Capitalism doesn't pay attention to humanitarian values, moral values or spiritual values because, well, they don't add to the GDP. And at the end of the day, that's all that matters in a Capitalist society. 

I would never push anyone to adopt the motto "get rich or die trying". 

But as we can see, Google or otherwise, companies end up with this as their mantra when they want to get to the top. 

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else.

Cloud vs corporate IT: Insights into how the share-economy will play out?

When thinking about disruption we often attempt to look to the past for how it will affect our future. However, we can also explore how disruptive tech is impacting our world today.

Consider a recent WSJ article that gave us insights in to how cloud and mobile is disrupting "classic tech":

• EMC, Intel and IBM are being disrupted. The move to cloud and mobile is impacting the ability of these companies to meet earnings expectations. For example, EMC's sales of storage products declined by 10%, while Intel has seen an overall decline in PC Market sales.
• Companies are slashing their workforce in response to such trends. The shift to cloud & mobile is resulting has resulted in the hemorrhaging of 12,000 jobs, or 11% of the workforce, at Intel alone. 
• Overall decline in revenues/profits despite strategic shifts in product mix. IBM's cloud computing business grew 34%, while Intel's data centre business, serving cloud providers grew 9% (for more on this "corporatification trend" see here). However, IBM's total revenue fell almost 5%. Intel had a tough time keeping up with rivals like ARM who posted revenue gains of 22%. This compares to 7% of which the WSJ attributes a chunk of that rise to an acquisition Intel made. 

Reflecting on these trends, is it fair to think of cloud as the original use case for the share economy? 

When we think of Uber, Airbnb, etc., we see how users can use these platforms to monetize their excess or underutilized asset by renting it to others.

However, isn't that also the story of the cloud?

Amazon, Intuit, and other cloud computing companies decided to "share" their excess computing capacity to others. In a sense, we are talking about servers instead of houses, but the concept is really the same.

And this goes to my initial point. We are living through the disruptive impacts of cloud and mobile on legacy-tech and we can quantify, analyze and understand its impact.

Given this premise what does this above tell us about the share-economy?

Firstly, better utilization of assets leads to the sale of less assets.  This should be expected as there is a more efficient use of assets leads to  (servers, car, house, etc) less market size as demand remains constant. As I had noted in the post a few months ago, Uberization of the taxicab industry would ultimately lead to a fleet of cars that are owned by a company like Google - leading to a net reduction of cars used by society. GM probably understands this concept as they have invested $500 million into Lyft; a competitor to Uber.

Secondly, it illustrates how the share-economy is subject to concentration of wealth: the cloud computing landscape is dominated by large players, including Amazon, Google and Microsoft. As noted by Douglas Rushkoff in the following video, since these innovations emerge out of the "operating system of capitalism", they inevitably result in the formation of a handful of platforms dominate the industry and capture the lion's share of the profits.


(Also check out his book that discusses this in more depth)

Thirdly, its difficult for behemoths to adjust to these types of shifts. Despite Intel and IBM investing in the disruptive technologies, it's hard for them to adjust to the dynamics of the new economy. This illustrates how much more challenging it will be for those disrupted by such platforms to re-tool and compete in the landscape.

For accountants and auditors, one such platform to watch out for is Gigwalk. As per their website, their value proposition is that by leveraging the 350,000 “professional services” workers (see graphic below) the manufacturer or other upstream supplier can get visibility into the actual retail outlet. For example, Whirlpool wanted to “Audit the presence of its Swash product on showroom floors, communicating back to corporate compliance gaps in real-time”.

And the "starter Store Audit Package" begins at $10.

Creative destruction is not inevitable, but we should learn from the lessons of these tech giants and plan prudently to meet such challenges head on.