We have a special Halloween episode for you guys today, and it's about something that's been on people's minds over the past week. Leaving Pubcon, everyone was talking about the tension between the conference's speakers Matt Cutts and Jason Calacanis. Both addressed the thousands of attendees at the conference, but Calacanis' address surfaced some frustrations that Jason felt towards Google. The tension continued on Twitter, and people really seemed to respond to the criticism. It spawned the hashtag #GoogleWinsEverything, and it has been used to reference the sense of power Google has over internet businesses and the internet community. Watch today's special Halloween episode of the Daily Brown Bag to learn about the "showdown" between Matt Cutts and Jason Calacanis, the real power of Google, and the question everyone seems to be wondering lately, "Is Google too powerful?"


Hello, and welcome to the Daily Brown Bag. Today we’re going to be talking about how Google wins everything and whether that’s good business or something more sinister. I’m Chad Hill and I’m joined by Adam Stetzer.

Yeah, good afternoon, Chad. Really interesting stuff going down at Pubcon, and Happy Halloween, by the way, everybody. Jason Calacanis and Matt Cutts were really squaring off as the two keynote speakers in Las Vegas last week, and they really seemed to represent two different ends of the internet spectrum. Calacanis on the well-known entrepreneur and VC side and of course we all know where Matt Cutts is because he’s got the megaphone most days as the anti-spam engineer at Google. What was interesting was to listen to Calacanis throw dirt at Google and really try to get into this fight. Here are some stats that were brought out. One-third of all online advertising revenue go to Google. Gmail, as you know, is ubiquitous and is in 57 different languages, and Android, in the mobile space, is becoming the dominant mobile phone operating system with 80% market share, very surprising, worldwide, and over 50% of the smartphone market share in the U.S. There are over one million Android activations per day. Of course, even if we watch the share price of Google, it’s up to over $1000. So, I think the fight here is really around whether Google has too much control of the internet, and that’s certainly the position that was taken at Pubcon, saying this is bordering on monopolistic and being able to call the shots is too much power. Interesting debate, here, Chad.

Yeah, absolutely, and I think it is sort of interesting to note that when Calacanis started off his speech, he was on a much more positive note talking about the state of the media business and all about how creativity and the entrepreneurial nature of the internet will continue to evolve. Stats talk about how the internet will eventually take over television, that gaming is the number one activity where people are spending time on mobile, and he thinks that generally, people are starting to figure out how to create content that people want to share socially instead of being so dependent on Google. On one hand, he started out saying that the internet is evolving, and there’s this 800-lb gorilla in the search space, but he sees signs that things are evolving. He then, during the Q&A, came back and talked about how he really did question and thought that maybe Google was evil, especially as it relates to his previous start-up, Mahalo, and he basically said that he called Cutts out by name and said that Google had not been a good partner. So, Adam, it’s definitely interesting.

The whole Mahalo backstory I find fascinating, because it really asks the question of how credible this criticism is if you’ve personally been harmed by Panda or Penguin. I know in the internet marketing business, we’re ruled by these algorithm updates, so we’ve sort of gotten used to it. It’s interesting to have someone come on stage and really question this, and it’s sort of an emperor’s new clothes-type position, but even if there is a monopoly here, I think people often say that it will be broken up by the government. Historically, I think there are some interesting notes, here. The oil industry had monopolies for years-- Standard Oil was a monopoly for a very, very long time-- decades, even. The phone companies, with Bell, the old AT&T before divestiture in ‘84, was the monopoly for decades as well. It could be that there’s monopolistic pressures here, but the government won’t step in for a long, long time, I think particularly because of the excellent public relations that Google does, the “Do no evil” motto, and the way they try to present themselves. I also see some cracks forming, too, because you see this squaring off with Apple. You see these ads where they’re trying to make Android have the same brand loyalty and attraction to young users that the Apple brand has, and they just don’t measure up. One is much more about computers and the other is much more about an experience. But, at the end of the day, Google is still top dog in search and their product is still far superior. So, I don’t know that this changes much, but it certainly is a fun debate to watch.

Yeah, and it’s a good one for Halloween, for sure. I think one of the takeaways, like you said, Calacanis had some skin in this, His site was significantly impacted by Panda, and Matt Cutts actually came out and said that Mahalo was one of the most frequently blocked sites that they saw. So, when Mahalo was ultimately no longer showing in Google, Matt Cutts said this wasn’t something they picked out specifically, but rather it was done based on user preferences and other algorithmic updates.

Yeah, definitely. Well, we’d certainly be interested in your opinions. Does Google win too much? Is it an unfair playing field out there? Do they have too much of an advantage? Or, if you feel like it, just share a picture of your costume and your office party as we’re about to have at Semify. And, as always, we’re here every day doing the Brown Bag. If you like what you see, we hope you’ll subscribe to our YouTube channel and join us again tomorrow.