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It appears that Google’s YouTube subsidiary is caving to various government pressure concerning whatever videos the government doesn’t like. This started a while back when Google gave in to pressure from Thailand’s government to a href=”http://www.techdirt.com/articles/20070406/135305.shtml”ban/a videos critical of that made fun of the country’s king. But, now the pace is ramping up. Last week, Google gave in to Senator Lieberman, agreeing to a href=”http://www.techdirt.com/articles/20080912/1540472258.shtml”ban/a videos from terrorists, and the latest is giving in to pressure from the UK government to a href=”http://news.bbc.co.uk/2/hi/technology/7621013.stm” target=”_new”ban videos that show weapons used to intimidate people/a. Now, YouTube has always banned hate speech or threatening videos, so this new ban seems to go above and beyond that — including videos that show weapons being used to intimidate that iaren’t/i threatening videos themselves. That seems pretty pointless again. The same videos will quickly appear on other sites, and rather than using YouTube as a way to track down anyone who might be breaking the law, Google is helping the UK government put their head in the sand and pretend no one ever is filmed doing anything bad with weapons.
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We had just mentioned Scott Harrison a href=”http://www.techdirt.com/articles/20080910/0408132224.shtml”recently/a as an extreme example of patent attorneys getting their own patents and suing. In Harris’ case, the a href=”http://www.techdirt.com/articles/20071019/020936.shtml”trouble began/a when it was discovered that he (through a shell company) was even filing patent infringement lawsuits against some of the clients of his own law firm. He was fired and a lawsuit quickly followed. That lawsuit was a href=”http://thepriorart.typepad.com/the_prior_art/2008/08/scott-harris-v-fish-richardson-litigation-is-settled.html”settled/a just last month, and Harris wasted little time a href=”http://thepriorart.typepad.com/the_prior_art/2008/09/harris-mce-lawsuit.html” target=”_new”suing more companies over his patents/a. In this case, the patents in question involved a a href=”http://www.google.com/patents?id=x8QOAAAAEBAJ”system/a and a a href=”http://www.google.com/patents?id=w_gVAAAAEBAJ”method/a for making use of traffic data on a GPS system. He’s sued eight GPS makers, claiming there are “a lot of companies are infringing my patent.”
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Interestingly, he also notes: “When I thought of this and tried to put it into practice, it was pure science fiction.” That would seem to raise questions about the legitimacy of his patents. If it was pure science fiction, then it would suggest that he wasn’t able to put it into practice (and, certainly, he does not seem to be actively engaged in the market). If that’s the case, then he would have effectively just patented “science fiction” and is now suing the companies that actually figured out how to turn science fiction into reality. Since they’re the ones who made the leap (and took the risk in building the products and bringing them to market), why should Harris get to put a tax on them?
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We recently pointed out Nicholas Carr’s troubling suggestion that Google was somehow unique in being able to a href=”http://www.techdirt.com/articles/20080909/0334362212.shtml”leverage complementary markets/a to make its core market significantly more valuable. As we pointed out, this shouldn’t be unique to Google at all, but should be a key focus for ievery/i business out there. Umair Haque has now come along and written what should be seen as the flipside to Carr’s piece, looking at a href=”http://discussionleader.hbsp.com/haque/2008/09/where_is_the_chrome_in_your_st.html” target=”_new”how plenty of other businesses can and should leverage complementary markets/a — often in extreme ways. As a starting point, he notes how Google’s Chrome browser is doing exactly that.
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Basically, he starts from the same point as Carr: Google is doing things that don’t ilook/i to be related to their core business, but those actions significantly influence complementary markets which have the end result of igreatly/i enhancing the core business. Haque sees multiple steps out in terms of how these complementary markets can be applied in many industries, while Carr does not. If the two were playing chess against each other, I’d bet on Haque any day.
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For example, Haque throws out a few “radical” suggestions for certain industries:
blockquotei
Imagine what would happen if GM and Ford collaborated to invest in the components and architecture of a better public transport network — and then licensed it for free to cities, states, and countries.
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Imagine what would happen if pharma players directly invested in better hospitals and clinics — instead of in trying to own the relationship with doctors, and furiously outspending one another when marketing blockbusters.
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Imagine what would happen if Wal-Mart invested in town squares and parks — instead of just in featureless warehouses draining what little vitality remains in already bleak exurbs.
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Imagine what would happen if P#038;G and Unilever invested in people’s opportunities for education, global mobility, and meaningful, authentic relationships with others — instead of just trying to control distribution channels, and then push-market more stuff to you.
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Each one of those examples is about radically changing a complementary market, which might not seem to have a direct impact on the primary business, but which would all eventually create a much better primary business — just as Google is trying to do with Chrome. And, of course, it’s not hard to build a a href=”http://www.techdirt.com/articles/20070503/012939.shtml”framework/a for how you go about doing this in your own business. It simply requires companies to a href=”http://www.techdirt.com/articles/20070125/004949.shtml”really understand/a what business they’re in (focusing on the ibenefits/i, not the products) and to then a href=”http://www.techdirt.com/articles/20070315/013313.shtml”understand the complementary markets/a, recognize how changing those complementary markets shifts around the rest of the market, and then make sure you understand a href=”http://www.techdirt.com/articles/20080822/0336542063.shtml”where the money flows/a if those complementary markets are disrupted.
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Google has figured out how to do this quite well, and there are a few other companies who are doing it in less obvious ways — but there are many more on the way. And, of course, if you want some help in figuring out how to do this in your business, a href=”http://www.techdirt.com/contact.php”give us a call/a. We can help.
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With the government gearing up to potentially go after Google for antitrust violations, we’re seeing all sorts of press coverage of stories about how Google may be abusing its position, from supposedly hurting companies to potentially having too much insight into your web surfing activities. And, no one’s gloating over this turn of events more than some of the broadband providers, who often find themselves at odds with Google over issues such as net neutrality, patent reform and other issues. Yet, as some new research is suggesting, it’s odd that there’s so much of a spotlight focused on Google, when those same ISPs are a much bigger privacy threat. They have a lot more visibility into our online activities, a lot more control over what users do, and (unlike Google) it’s a lot more difficult to route around them. Plus, many have shown that they have no problems selling your private data — sometimes without letting you know. So, why is all the attention focused on Google? If it’s abusing our privacy, then it’s easy to switch to a competitor. Broadband ISPs, on the other hand, have a lot more control and visibility — and a much tighter grip on customers, usually with fewer competitive options. Yet, the government rolls over backwards to let these ISPs do what they want, while it prepares an antitrust lawsuit against Google?

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More than three years ago, when Chinese search engine Baidu first filed to go public, we noted that it’s huge advantage over Google in China appeared to stem from its very popular music download search engine — and we wondered if going public would force that to go away, potentially damaging the company’s bottom line significantly. In fact, we were surprised that it appeared that the investors in the site hadn’t done much due diligence to understand what was going on. The recording industry wasted little time in suing Baidu. While Baidu won the first case on a technicality and quickly sued again.

At first, this did seem like a typical situation seen with other online search engines, such as The Pirate Bay or even Google, where it’s not really clear how Baidu could stop the searches for unauthorized music. However, a new investigative report by The Register found evidence that suggests Baidu is actually a lot more involved in the music download business than it lets on. Specifically, the search results mostly link to a mysterious network of sites that are only reachable via Baidu searches. You can’t just go to the sites directly. The sites themselves have a long (and potentially growing) list of random domain names such that the songs constantly move around, and any time Baidu receives a “takedown” it can claim it complied, while the music almost immediately shows back up on the next domain in the list. Also, Baidu almost never links to other, legitimate, download sites — preferring to point people to these sites that are unreachable outside of Baidu instead.

All in all, it certainly sounds like Baidu is a lot more involved in providing the actual downloads than it would as just a search engine.

That said, The Register’s report includes a variety of unsupported statements about how this has “destroyed” economic activity in the music business. As we’ve seen, the music business has actually adapted to the expectation that the music itself is free in China. I recognize that it’s popular for the RIAA and IFPI to make claims about how downloading is destroying the music industry, but you would think that the Register would know better.

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Yet another day and yet another odd attempt by Apple to arbitrarily control what’s in the App Store for the iPhone. A bunch of folks have submitted the news of a podcasting app that’s been blocked because Apple claims it competes with iTunes. This should, of course, scare of iPhone developers even more than previous bans. After all, it means that should an app get particularly popular, Apple would most likely just create its own competing version and remove the popular app from the store.

While some are decrying this as being an abuse of power, Apple certainly has the right to do it. It’s just not a particularly good long term strategy — and likely to backfire badly. Pissing off your developers or making them worry isn’t going to get very many good apps written going forward. Also, limiting competition is actually going to hurt Apple, because it no longer has anyone driving them to be better. What if this podcasting app had certain features that were really cool and useful — and not available in iTunes? Right now, Apple has no incentive to include that functionality, thus making its own software worse.

In the meantime, you’ve got to imagine that a number of iPhone developers may be eagerly awaiting the launch of Google’s Android platform which won’t have such arbitrary restrictions.

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With the Justice Department getting closer and closer to going after Google for supposed antitrust violation, we’re going to see more and more articles like the one in the New York Times this weekend that tries to highlight the story of a company “harmed” by Google’s market power. In this case, it’s the story of a guy who runs a directory site that was based entirely on Google arbitrage. He bought ads on Google’s search engine to drive people to his directory page, and then littered the page with AdSense to collect revenue from people clicking through. The NY Times presents this as being somewhat harmful, but I have to side with Jeff Jarvis who doesn’t see what Google did wrong.

Google arbitrage sites are a problem for the end user. They’re based on the simple concept of forcing people to go an extra click to siphon some money away. If I’m looking for a particular site on Google I don’t first want to go to a directory — I want to go directly to the site. That’s true for many, many users — and Google’s efforts in punishing arbitrage sites isn’t anticompetitive, it’s about improving the user experience, which is something that should be praised, not sued. The only problem noticed in the scenario was that the guy chose a bad business model, where he was totally reliant on a single company for both all of his traffic and all of his revenue. He made the decision to base his entire business on a single supplier, and that supplier has every right to change the terms of its deals in an effort to make a better consumer experience. This isn’t Google being anticompetitive — it’s Google serving its customers.

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Back in May we wrote about Senator Joseph Lieberman demanding that YouTube remove a bunch of videos of terrorists. At the time, YouTube reviewed the videos in question, and took down the ones that violated the site’s terms of service, but left most of them up, noting that the ones they left up did not promote hate speech nor show violence. As we pointed out at the time, trying to ban terrorists from posting videos to YouTube seems incredibly short-sighted. First, it won’t work. Those videos will quickly pop back up on other sites that won’t take them down. Second, most of those videos are preaching to the choir. It’s unlikely that very many people are being recruited to the terrorists’ causes by a grainy video on YouTube. Third, letting terrorists post their videos to a mainstream site like YouTube should help authorities figure out who’s posting the videos and where they’re coming from. Fourth, and most important, one of the key founding principles of this country is the right to free speech, no matter how much one might disagree with that speech. But, part of that principle is that it allows people to respond. So, yes, the videos may be pure propaganda, but there’s no reason that people can’t respond to the videos and show why they’re propaganda and wrong. Confronting your critics is a reasonable stance. Demanding that they cannot speak is not.

Yet, a bunch of folks have been sending in links to a story claiming that Google has now caved to Sen. Lieberman, and will now band terrorist videos on YouTube. The article says that YouTube’s new terms of service will ban footage that “advertises” terrorism or “extremist causes,” which seems pretty broad, and certainly open to abuse. The article describes some videos that show how to commit violent acts — but those were already banned by YouTube, so that’s rather misleading. These new terms are more disturbing. It’s not going to stop the videos, it’s just going to make it harder to keep track of them, harder to counter them — all while making the terrorists feel more legitimate.

Terrorists should be tracked down and stopped — absolutely. But we should be dealing with the actual problem of terrorists, not some videos they made.

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We’ve been somewhat confused by the talk of an antitrust action against Google for its ad deal with Yahoo (which doesn’t seem likely to raise prices despite what critics say). However, it’s become increasingly clear that the gov’t is very likely going to move ahead with this. As we already noted, the Justice Dep’t has already hired a well-known outside attorney to lead the charge. It seems unlikely that they would do that if they weren’t planning to make a big splash. Plus, news is spreading that the Justice Department is already sharing info on its case with California’s Attorney General and potentially other state Attorneys General as well.

Now comes the news that the Justice Department isn’t just thinking about stopping the ad deal between Yahoo and Google, but in going after Google in general as a monopolist. This is positively ridiculous, and is clearly politically motivated and funded by companies who simply don’t like Google. Yet, nowhere has there been any evidence that Google’s size has been used to abuse pricing power or to make things more expensive for consumers. Rather, almost everything it’s done has been to make things easier or cheaper for consumers.

Unfortunately, it appears that in this politically motivated world, where Google didn’t “play the game,” a bunch of politicians and Justice Department officials want to charge Google with the crime of “being too successful.” Honestly, that’s about all they seem likely to have on the company, because it’s hard to see how it’s abused its monopoly power in a way that actually harms consumers or prevents competition from entering the market.

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When we talk about all the harm patents do, some people respond that even if the market can make up for cover the research costs for commercial products, without patents, basic research would never happen. Nothing can be further from the truth. In fact, there’s increasing evidence that patents are harming basic research as well. The main arena for basic research has long been universities. Yet, back in 1980, what was supposed to be a “minor tweak” to the patent system, the Bayh-Dole Act, allowed universities to start patenting their research. And, patent it they did. However, as the NY Times notes, rather than foster new research and innovation, this resulted in much less collaboration, much greater secrecy and much higher costs to innovation.

As the article notes, the problem was in making the same mistake that many patent system supporters make, assuming that the invention stage is the most important part of innovation — when it is not. Invention is just one part of the innovation process. Locking up the invention stage makes every other part of the process of innovation much more expensive, thereby limiting innovation — and in fact, that’s exactly what the Bayh-Dole Act has done:

Part of the problem has been a lingering misunderstanding about where the value lies in innovation. Patenting a new basic science technique, or platform technology, puts it out of the reach of graduate students who might have made tremendous progress using it.

Similarly, exclusive licensing of a discovery to a single company thwarts that innovation’s use in any number of other fields. R. Stanley Williams, a nanotechnologist from Hewlett-Packard, testified to Congress in 2002 that much of the academic research to which H.P. has had difficulty gaining access could be licensed to several companies without eroding its intellectual property value.

As for whether or not it’s actually increased the amount of basic research, a study we wrote about earlier this year found that it had actually decreased basic research at universities. And, the story gets even worse, because it’s not even as if this ability to patent university research has resulted in huge monetary windfalls for universities either. While some had hoped to hit the jackpot with patents, they failed to recognize just how costly it is to maintain patents and run a technology transfer office. A recent study found that the majority of tech transfer offices had lost money for their universities.

About the only good news in the article is the fact that the steady stream of studies and complaints from within academia about this impact is gradually waking up some to how big a problem the Bayh-Dole Act was in stifling research and innovation in the US. Unfortunately, just getting basic patent reform moving is difficult enough. And since the pharma industry likes Bayh-Dole (since it allows them to sweep in and get all the value from discoveries made at universities — see The $800 Million Pillion to learn about how pharma and biotech companies have abused the system for years), you can bet that they’ll put up a huge fight to repeal this incredibly harmful bit of legislation.

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