I do wish The Guardian could count

The logic being that, in using these services, you are giving away valuable personal information, which can be used to gain revenue from targetted advertising. It\’s a sort of digital prostitution ring that is making Google around $30bn a year, including an estimated $2bn in France. In light of these galling facts, the report concludes, France should introduce a tax on the collection of personal data.

It\’s not quite right to say that internet users are giving away their information. Access to \”free\” services like Google or Facebook relies on a value exchange and it is your data that is being exchanged. A general haziness around what value that data represents means most people accept this deal. After all, would you be prepared to pay \”real money\” to fund your Google Chat habit? Research shows you\’re paying Google around $5,000 in personal data in exchange for its services. Given the option to pay that $5,000 via cash, credit or cookies, I imagine most people would plump for the cookies.

What?

Let\’s run through this. Using Google\’s turnover, not profits, just because it\’s easier.

So, a Google customer is giving Google $5k a year in information. And Google has a $50 billion turnover. Thus Google has 10 million customers.

Does Google have 10 million customers? No, they don\’t: it\’s more like 1 billion. Thus each customer must be giving Google $50 worth of information then.

Which, if you actually click through that link marked \”research\” is what is said: customers are giving Google $50 to $5,000 a year\’s worth of information.

Why is it that these people cannot actually do simple numbers? They are the technocrats who insist that the world can and should be planned: but they can\’t even sodding add.

12 comments on “I do wish The Guardian could count

  1. It’s all nonsense anyway. Google is no more in the business of selling advertising space than London Transport – the space they sell is an incidental bonus to their core activities. What Google will eventually sell, once they have developed the concept much further, is conclusions drawn from aggregated data which allow ads to be targeted.

    Just for some perspective, a personal shopper – which is basically what Google wants to be for us – usually charges upwards of £500 per day. On top of that service, Google is providing free searches, free email, and so-on.

  2. Incidentally, if the Graun believes Google is significantly underpaying, why don’t they offer to pay people a higher sum and sell the results to google?

  3. Dave,

    Google is no more in the business of selling advertising space than London Transport – the space they sell is an incidental bonus to their core activities.

    Advertising is almost all of Google’s income. They make a little selling the search appliance boxes, but most of it comes from people clicking ads.

  4. “Does Google have 10 million customers? No, they don’t: it’s more like 1 billion.”

    By a rather loose definition of “customer”, perhaps. Google’s true customers are those who pay it money for something, not those who otherwise make use of its services (who are more like a resourse being mined). If Amazon pays Royal Mail to deliver packages to ten million addresses, Royal Mail has one customer in that arrangement.

    That may seem like pedantry, but in attempting to assess value in complex exchanges it’s useful to keep an eye on the actual money.

  5. Tim Almond>

    Google’s in the unusual position of making a profit from ancillaries whilst building their real product – but the ad space is still a sideline. They’re at least ten years away, at a guess, from gathering enough data to draw really solid conclusions, but when they do they’re going to render most advertising obsolete – probably including the space they currently sell.

  6. PJF>

    It’s a non-monetary transaction, so there’s no real customer. Normally the customer is the one paying money for some kind of utility supplied by the other party, but in this case no money changes hands – data is directly traded for services.

    From a purely linguistic point of view it seems odd to say that a billion people have Google as a customer – it makes more sense to say that Google has a billion customers.

  7. Dave, there are real customers paying real money to Google (where the $30bn comes from). The value of the trade of data for services between Google and its vast resourse base comes from those relatively few actual customers.

    Saying Google has a billion customers doesn’t make linguistic sense if it communicates something that isn’t true.

  8. That’s right @PJF, the customers are the companies who pay Google to advertise, ie on their search page etc. The 1 billion users help create this value but they are not for the most part customers.

  9. In fairness to the author of the article, I don’t think she’s advocating that the government should cash in, merely observing that France has floated the idea they might.

    It appears in the second half of the article, she has been replaced by a random prose generator as the article may well have been written in Korean for all the sense I can make of it.

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