Hi, everyone. One of the consolations of December’s daylight deprivation is the ability to play “Christmas (Baby Please Come Home)” over and over again. And Darlene Love is still at it!
The Plain View
Is there an Amazon user on planet Earth who welcomes the rise of advertising on this platform? Somehow the company known for its relentless focus on the customer has decided that the best product choices should not be limited to criteria like cost, quality, or, in the case of masks, NIOSH approval. After all, sponsorship is what consumers crave, right? If we were supplied with a drop-down menu of which items to see, undoubtedly we would hover over the option that says, “Products that have paid Amazon for preferential placement.”
That’s what Amazon at least professes to think. Its representative, Tina Pelkey, recently explained to The Washington Post (owned by Amazon founder Jeff Bezos, by the way), “We design our store to help customers discover products we think may best meet their needs—sponsored ads is one of the ways to help them find products they may be interested in.”
If that’s the case, I wonder why Amazon isn’t bolder in making it clear to customers which product choices are paid for and which are earned, beyond the clear labeling that the FTC requires. A recent complaint to the FTC charges that Amazon isn’t even adhering to those rules. Amazon disagrees. In any case, according to eMarketer, Amazon will rake in almost $25 billion in ad revenues this year.
It’s hard to see how customers benefit when a good chunk of the prices for the products they buy must include those marketing fees. That’s money that might otherwise be directed to lower costs or higher quality or simply staying in business. And any Amazon user can tell you that many product pages these days are kind of a stress test, with a baffling mix of sponsored products, “Amazon choices,” and Amazon-branded products alongside the organic results meant to surface what you really want. This from a company with a core value of reducing friction.
In short, the customer experience on Amazon isn’t what it used to be. But I don’t want to single out the ecommerce giant for this regression of its core product. The phenomenon is now endemic among the giants of Big Tech. Google, Facebook, Apple, and Microsoft rose to prominence with fantastic products that were laser-focused on delivering something unique and magical to users. But as the companies got bigger and more powerful, they began to point their lasers somewhere else, while shining a dimmer light on the products they are known for. On the one hand, you can’t blame them—it’s hard for trillion-dollar companies to maintain growth that drives their stock price without creating new businesses. But antitrust crusaders say that these firms are compromising their flagship models, because they can get away with it. Their users aren’t going anywhere; the competition has been vanquished.
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Case in point is the company that recently changed its name to Meta. I wonder how that sits with the people who work on the product still called Facebook—the one that brings in the bulk of the company’s profits. It’s not like the News Feed is a finished product: After 15 years, it’s still a black box that keeps delivering unwelcome stuff while failing to surface all we want to see from our actual friends. At one time, Zuckerberg actively engaged with that challenge. In 2013, for instance, he launched an innovative effort to build a social search feature to make the Feed more vital. But after a tepid response, Zuckerberg seemed to give up on it and turned his attention to buying other companies. Now, social media is no longer his main focus, and he’s hiring 10,000 people to build the metaverse.
Steve Jobs once understood that the path to greatness is a willingness to totally reinvent—to cannibalize, as he called it—one’s flagship creations. But Apple hasn’t been Sweeney Todd-ing many of its products of late. Instead, it’s built a huge services business. Not to mention … ads! It sells billions of dollars worth of advertising to developers who want better display in the app store. On top of all this, Apple’s white whale these days seems to be developing a car. At least iPhones haven’t gone backwards—but, really, how different is iPhone 13 from iPhone 10?
And have you tried Google Search recently? Those beloved 10 blue links have morphed into a Ginza-like display of ads, news stories, and a row of promoted items for sale. Good for the user? Not according to reviewers or regulators.
What’s the remedy for all of this? Antitrust action is a long process that may or may not garner results. But I do think it’s possible that sooner or later, customers might get sufficiently fed up and try products that dare to offer alternatives. Remember, at one time, it looked like the dominant companies on the internet would be AOL, Yahoo, and MySpace. Friends, they ruled! But they got greedy. AOL saw itself as less of a service based on person-to-person interaction than a marketing vehicle that packaged a giant audience. Yahoo didn’t want to be bothered with algorithmic search, and actually turned down the chance to buy Google. And when Facebook was on a meteoric rise, MySpace was excited about starting a record label.
I’m sure Amazon CEO Andy Jassy isn’t asking for my advice. But here it is, anyway, all wrapped up for Christmas: Take it easy on those ads. Making Amazon more confusing and less useful might wind up to be a terrific present—for your commerce competitors.
Time Travel
In May 1998, I wrote what I hoped would be a Newsweek cover story about Yahoo and “portals” like America Online. (Frank Sinatra died and I lost the cover. Ah, newsweeklies.) Even then, companies were trading user experience for advertising lucre. Note, if you will, the meager number of AOL members cited as the “envy” of competitors.
Of course the most entrenched competitor of all is the ur-portal site: America Online. As a stand-alone service AOL had to painstakingly develop an arcade of features. Now it has its payoff: an audience of registered members that is the envy of the Web portals. Though the bulk of AOL’s revenues come from the monthly subscriber fees, the company’s goal is to steadily increase the percentage of money it gets from advertising and transaction fees—the same business model, essentially, as Yahoo’s.
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But do not suggest to an America Online executive that his company is in any way similar to a piddling Web site. “We look at Yahoo as a site on AOL,” says COO Bob Pittman. “Everybody is figuring out if they have a business without investing what AOL has.” Pittman believes that the Web-based portals are fine for technophiles, but not for mainstream Americans. “The secret of AOL is that Steve Case has the gumption to build a company for the mass market, the average Joe,” says Pittman. AOL has 12 million of those average Joes and Janes. Now it is discovering new ways to sell that audience.
The best of those deals to date is a sweet little arrangement between AOL and a formerly obscure long-distance service named Tele-Save, which seemingly had little ammunition to lure away customers from the likes of Sprint or MCI. That changed when Tele-Save president Dan Borislow made a cold call to Bob Pittman, with an irresistible icebreaker: “I’ve got a $50 million check,” he said. “I want to talk to you.” Eventually Tele-Save paid twice that amount to become AOL’s official long-distance provider. Tele-Save gathered 550,000 sign-ups in the first four months. And AOL gets rich, simply for milking the crowd it so doggedly gathered over the years.
Ask Me One Thing
Whitney asks, “What’s the best decision you made in your career? And what’s your biggest regret?”
Wow, that’s personal, Whitney. Clearly it was a great decision to follow up on the underlying subject of my 1982 Rolling Stone story about hackers: the coming transformation that computers would bring to our lives. It felt risky to go all-in on a field that seemed like a geeky backwater at the time. I even vacillated when choosing the topic for my first book. Was the offer to write about hackers as smart as the other one I had, to write a trade paperback about nightclub singers? I think I chose right.
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I really don’t have a bundle of regrets. For a while, I was sorry I didn’t jump on tech stories even sooner. I began working in the field of journalism literally the same month that the Homebrew Computer Club, the incubator for the PC industry, began meeting. What was I doing writing about sports, rock music, and the Educational Testing Service when I could have parachuted into late-1970s Apple or hung out with teenage Bill Gates? I missed the good stuff! But then one day in the 1980s, when I whined about this to Stewart Brand, he just laughed. “What are you talking about?” he said. “People are going to ask you what things were like now.” He was right.
And you know what? It’s still early.
You can submit questions to mail@wired.com. Write ASK LEVY in the subject line.
End Times Chronicle
Two massive black holes—the pair closest to Earth!—are about to collide and merge into a single mega black hole. Can’t be good. (OK, this will happen in 250 million years, but time just zips by these days.)
Last but Not Least
Wait, Facebook is now selling artfully folded ham on its Marketplace? I take it all back!
Some of the timeliest news about California wildfires comes from an amateur tracker in New Zealand.
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Another self-appointed sleuth suspected that the culprit behind four child deaths was not the convicted and imprisoned mother. Then things got complicated.
Hey, no worries about climate change, we’ll just do geoengineering, right? Not so fast.
This is my last newsletter of 2021. Next week my brilliant colleague Lauren Goode will take over Plaintext, and we’ll have a special New Year edition a couple weeks after that. I’ll be back on January 7, 2022. Here’s to the best possible holidays to all my Plaintext readers. May your Zooms not include mass layoffs.
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