Tag: Google

By Jillian D’Onfro for CNBC

In response to the European Union’s $5 billion antitrust ruling in July, Google will change how it bundles its apps on Android phones and charge a licensing fee for phone makers that want to pre-install apps like Gmail, Maps and YouTube in the EU.

Google will also end restrictions on phone makers selling modified or “forked” versions of the mobile operating system.

Previously, Google tied together a suite of 11 different apps that phone makers would have to pre-install if they wanted to license its app store, Play. In July, the EU ruled that this bundling was anti-competitive — pushing consumers toward Google’s search engine and weakening rival app makers — though it only specifically called for Google to separate Chrome and Search from Play.

In response, Google said in a blog post on Tuesday that it will start offering separate licenses for Search and Chrome, as well as a license for its suite of apps like Maps, Gmail and Docs. That means that if phone makers want to pre-install those apps, they will have to pay a fee, though the amount was not specified. Google says the new licensing fee will offset revenue lost through compliance efforts that it uses to fund the development of Android, which it offers as a free, open source platform. The licenses for Search and Chrome will not have a fee.

Although Google doesn’t make money from Android directly, it generates advertising revenue through search as well as Chrome, Maps and Gmail, serving ads within those apps and using data it collects from users to better target ads across its platforms.

“Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA [European Economic Area],” wrote Hiroshi Lockheimer, Google’s vice president of platforms.

Google’s previous agreements with phone makers also prevented them from selling modified versions of Android if they wanted to use its suite of apps, but the company will now allow manufacturers to build forked smartphones and tablets for the EEA.

Overall, Google’s Android powers more than 80 percent of the world’s smartphones. These changes, which will come into effect on Oct. 29, will only affect phones for the EEA, a group consisting of 28 EU countries, plus Iceland, Liechtenstein and Norway.

Source: eMarketer

A recent survey conducted by eMarketer has illustrated how the average American Internet user feels about digital advertising.

The majority of respondents felt that advertisers were “too aggressive” in the way they were tracked online.

 

The data was collected from an October 2018 survey by Janrain.

1 079 US Internet users ages 18 and over were surveyed online during August 2018.
Respondents identified:

  • their gender as female (54.6%) or male (45.4%)
  • their ages as being 18-29 (26.9%), 30-44 (21.8%), 45-60 (24.5%) or 60+ (26.8%)
  • their household income as being $0-$9,999 (6.4%), $10,000-$24,999 (11.3%), $25,000-$49,999 (18.8%), $50,000-$74,999 (17.4%), $75,000-$99,999 (13.6%), $100,000-$124,999 (9.4%), $125,000-$149,999 (3.7%), $150,000-$174,999 (3.7%), $175,000-$199,999 (1.5%) or $200,000+ (2.8%).

Bug proves lethal to Google+

Source: Business Day

Google is shutting down the consumer version of its online social network after fixing a bug exposing private data in as many as 500 000 accounts.

The US internet giant said it will “sunset” the Google+ social network for consumers. It failed to gain meaningful traction after being launched in 2011 as a challenge to Facebook.

A Google spokesperson cited “significant challenges in creating and maintaining a successful Google+ that meets consumers’ expectations” along with “very low usage”.

In March, a security audit revealed a software bug that gave third-party apps access to Google+ private profile data that people meant to share only with friends. Google said it was unable to confirm which accounts were affected by the bug, but an analysis indicated it could have been as many as 500 000 Google+ accounts.

“We found no evidence that any developer was aware of this bug … and we found no evidence that any profile data was misused,” Google said in a blog post.

The data involved was limited to optional profile fields, including name, age, gender, occupation and e-mail address, Google said. Information that could be accessed did not include posts, messages or telephone numbers.

Google did not specify how long the software flaw existed, or why it waited to disclose it.

The Wall Street Journal reported that Google executives opted against notifying users earlier because of fears it would catch the attention of regulators.

Google will wind down Google+ during the coming 10 months to allow people time to download pictures, videos or other data they want from their accounts. It plans to add new workplace-orientated features to enhance the appeal of Google+ as a “secure corporate social network” to be used inside business operations.

“We have many enterprise customers who are finding great value in using Google+ within their companies,” the firm said.

“Our review showed that Google+ is better suited as an enterprise product where co-workers can engage in internal discussions.”

By Jean le Roux for Fake News Exposed

Some of South Africa’s biggest banks, insurance companies and car manufacturers have been caught advertising on fake news websites.

A News24 investigation of three months has found that big brands like Absa, Coronation, Cell C, Capitec, Mercedes Benz, Takealot and OUTsurance, who spend millions of rands promoting and marketing the credibility and integrity of their brands, have indirectly contributed to the fake news industry by buying programmatic advertising that landed up on dodgy websites.

Some of these websites, like HINNews – a Nigeria-based site that publishes a mix of fabricated stories and real news – have run stories about EFF leader Julius Malema dying of listeriosis and a new kidnapping ring “ripping” unborn babies from their mothers.

As the world is grappling with the scourge of fake news in the wake of President Donald Trump’s election in the United States and the support he received from Russian-run fake news operations to target potential Republican voters, South Africa has not been spared from the phenomenon.

“At Africa Check, we’ve seen false news stories stoke retribution, cause panic and misinform people about their health, which can have deadly consequences. It’s a real shame that reputable news brands aid the existence of these outlets, even if inadvertently. The sooner this gap is plugged, the better for society,” says Anim van Wyk, chief editor at Africa Check.

Association by advertising

Ismail Jooma, Head of Strategy at VML South Africa told News24 the creators of disinformation and fake news use rhetoric as a tool to divide.

“‘Disinformation’ websites are the modern era’s galvaniser of marginalised rhetoric, more often than not these websites pursue an agenda of racism, sexism and intolerance. If we had to remove the lens of moral subjectivity, purveyors of fake news aim to disunite at the very least.

A number of fake news sites that specialise in publishing fabricated news about South Africa make money through selling programmatic advertising spots to Google and other service providers.

News24 is publishing the results of our investigation into this phenomenon, including a blacklist of fake news websites, on a dedicated website titled Fake News Exposed.

Websites like HINNews are among several similar sites known for their clickbait headlines and fabricated stories, which are either copied from other online news sources or made up from scratch. Their articles show a fondness for the macabre and racially charged stories and are often widely shared on social media.

Companies whose brands appeared on these websites say they were unaware that they were inadvertently funding fake news and have instead blamed Google for allowing these sites to operate.

Google enables programmatic advertising, which is based on users’ browsing patterns on the internet. Advertising agencies buy adverts on behalf of clients and Google allocates these ads through a platform called Google Adsense, that uses algorithms to place adverts on websites. Website owners are then paid by Google Adsense.

In countries like Macedonia, running fake news websites that publish fabricated stories have become a full-scale industry and source of revenue for unemployed youngsters.

Companies condemn disinformation

Capitec, one of the local brands who’s advertising was found on a fake news website, condemned the phenomenon through their spokesperson Charl Nel. This sentiment was echoed by representatives from OUTsurance and Coronation. The full responses of companies caught on fake news websites by News24 can be found here.

These companies say they were unaware that a part of their advertising spend was finding its way to the owners of fake news site, while Google removed HINNews from its advertising network on September 21 after receiving queries from News24.

Nel said it was difficult for the bank to ascertain which news sites are fake and that it targets a market based on its readership. “We utilise various software for delivery of programmatic ads which are globally recognised (and) which optimises and creates lists as a brand watch. Capitec and our advertising partners also review websites on a monthly basis, however, it is very hard to decipher which websites are not legitimate as we target based on users.”

Nel condemned the use of fake news but repeated that it is hard to determine which sites are real and which are fake. “We are working hard to ensure these sites are blacklisted.”

OUTsurance’s head of client relations, Natasha Kawulesar, also denied the insurer’s knowledge or support of adverts on fake news websites and said the fake news website where it advertised was part of the Google Display Network (GDN), Google’s network of Adsense-approved websites. Google bans pornography, illegal downloads and similar websites from the GDN.

“We do not have the knowledge or capability to handle this function [digital advertising] ourselves and currently rely on our media and technology partners to handle this on their side,” said Kawulesar. “We place our trust in the publishers and media partners we deal with. We also have service level agreements in place to protect our brand and reputation. We confirm once again that we do not condone fake news or misinformation in any way, form or scale.”

Thato Mntambo, Manager: Corporate Communications at Mercedes-Benz South Africa also told News24 that the placement of their adverts was in the hands of Google.

“The unintended consequence of the pervasiveness of GDN [Google Display Network] is the difficulty to monitor the number of websites where our advertisements are displayed. We are conscious of the potential of incorrect placements and ameliorate the effects thereof through continuous monitoring of keywords and, in some cases, blacklisting keywords.”

Coronation Fund Managers, responding through their representative Tanya Schreuder of Dentsu Aegis Network, told News24 that the website on which their branding was found formed part of Google’s GDN list of websites.

“Under no circumstances would the Dentsu Aegis Network, as custodians of our clients’ brands, consciously support sites which are illegal, undesirable or dubious in any form. We take brand safety incredibly seriously and on behalf of all of our clients we undertake every effort to ensure that any online inventory we deploy is legitimate and of a quality that is contextually suitable.”

Google’s response

Google declined to comment on HINNews’s listing on the Google Display Network.

A spokesperson said: “Our publisher policies govern where Google ads may be placed. We don’t comment on individual sites but we enforce these policies vigorously and regularly review sites to ensure compliance. We also encourage people to let us know when they see sites that they have concerns about that may be in violation of our policies.”

Google turns 20

By Mikelle Leow for Design Taxi

On 27 September, Google turned 20 years old. It’s difficult to remember a world without the convenience of looking things up on the Internet; for many young adults, the scenario would seem impossible.

“When Google started 20 years ago, our mission was to organize the world’s information and make it universally accessible and useful,” the company wrote in a blog post.

“That seemed like an incredibly ambitious mission at the time—even considering that in 1998 the web consisted of just 25-million pages (roughly the equivalent of books in a small library).”

The tool hides an interesting Easter egg that takes you back to its early days. A simple search of, “Google in 1998,” brings up the company’s old logo and web designs that are telling of how much the internet has progressed since then.

Notably, Google’s brand name was stylized with an exclamation mark, which is not unlike the current Yahoo logo.

It also had a newsletter that would send you monthly updates of outstanding websites. Imagine if you received those emails today.

It’s good to know that, in spite of its considerable progress, the essence of the old Google still remains. For instance, the company has retained its color palette and its ‘I’m feeling lucky’ option.

What’s surprising is the site’s linkback to other search engines. Aside from Amazon and Yahoo, several of the other sites are no longer in existence.

 

By Mark Bergen and Jennifer Surane for Bloomberg / Fin24 

For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the US. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for.

But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. That’s because the companies never told the public about the arrangement.

Google and Mastercard brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly.

The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com and others.

But the deal, which has not been previously reported, could raise broader privacy concerns about how much consumer data technology companies like Google quietly absorb.

“People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center (EPIC).

“There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”

Google paid Mastercard millions of dollars for the data, according to two people who worked on the deal, and the companies discussed sharing a portion of the ad revenue, according to one of the people. The people asked not to be identified discussing private matters.

A spokesperson for Google said there was no revenue sharing agreement with its partners.

A Google spokesperson declined to comment on the partnership with Mastercard but addressed the ads tool. “Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement.

“We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.” The company said people can opt out of ad tracking using Google’s “Web and App Activity” online console.

Inside Google, multiple people raised objections that the service did not have a more obvious way for cardholders to opt out of the tracking, one of the people said.

Seth Eisen, a Mastercard spokesperson, also declined to comment specifically on Google. But he said Mastercard shares transaction trends with merchants and their service providers to help them measure “the effectiveness of their advertising campaigns.” The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants, Eisen added. “No individual transaction or personal data is provided,” he said in a statement.

“We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers.”

Last year, when Google announced the service, called “Store Sales Measurement,” the company just said it had access to “approximately 70%” of US credit and debit cards through partners, without naming them.

More possible deals

That 70% could mean that the company has deals with other credit card companies, totalling 70% of the people who use credit and debit cards. Or it could mean that the company has deals with companies that include all card users, and 70% of those are logged into Google accounts like Gmail when they click on a Google search ad.

Google has approached other payment companies about the program, according to two people familiar with the conversations, but it is not clear if they finalised similar deals. The people asked to not be identified because they were not authorised to speak about the matter.

Google confirmed that the service only applies to people who are logged in to one of its accounts and have not opted out of ad tracking. Purchases made on Mastercard-branded cards accounted for around a quarter of US volumes last year, according to the Nilson Report, a financial research firm.

Through this test programme, Google can anonymously match these existing user profiles to purchases made in physical stores. The result is powerful: Google knows that people clicked on ads and can now tell advertisers that this activity led to actual store sales.

Google is testing the data service with a “small group” of advertisers in the US, according to a spokesperson. With it, marketers see aggregate sales figures and estimates of how many they can attribute to Google ads – but they don’t see a shoppers’ personal information, how much they spend or what exactly they buy.

The tests are only available for retailers, not the companies that make the items sold inside stores, the spokesperson said. The service only applies to its search and shopping ads, she said.

For Google, the Mastercard deal fits into a broad effort to net more retail spending. Advertisers spend lavishly on Google to glean valuable insight into the link between digital ads a website visit or an online purchase.

It’s harder to tell how ads influence offline behaviour. That’s a particular frustration for companies marketing items like apparel or home goods, which people will often research online but walk into actual stores to buy.

That gap created a demand for Google to find ways for its biggest customers to gauge offline sales, and then connect them to the promotions they run on Google.

“Google needs to tie that activity back to a click,” said Joseph McConellogue, head of online retail for the ad agency Reprise Digital. “Most advertisers are champing at the bit for this kind of integration.”

Initially, Google devised its own solution, a mobile payments service first called Google Wallet. Part of the original goal was to tie clicks on ads to purchases in physical stores, according to someone who worked on the product.

But adoption never took off, so Google began looking for allies. A spokesperson said its payments service was never used for ads measurement.

So Google added more …

Since 2014, Google has flagged for advertisers when someone who clicked an ad visits a physical store, using the Location History feature in Google Maps. Still, the advertiser didn’t know if the shopper made a purchase. So, Google added more. A tool, introduced the following year, let advertisers upload email addresses of customers they’ve collected into Google’s ad-buying system, which then encrypted them.

Additionally, Google layered on inputs from third-party data brokers, such as Experian and Acxiom, which draw in demographic and financial information for marketers.

But those tactics didn’t always translate to more ad spending. Retail outlets weren’t able to connect the emails easily to their ads. And the information they received from data brokers about sales was imprecise or too late.

Marketing executives didn’t adopt these location tools en masse, said Christina Malcolm, director at the digital ad agency iProspect. “It didn’t give them what they needed to go back to their bosses and tell them, ‘We’re hitting our numbers,’” she said.

Then Google brought in card data. In May 2017, the company introduced “Store Sales Measurement.” It had two components. The first lets companies with personal information on consumers, like encrypted email addresses, upload those into Google’s system and synchronise ad buys with offline sales. The second injects card data.

It works like this: a person searches for “red lipstick” on Google, clicks on an ad, surfs the web but doesn’t buy anything. Later, she walks into a store and buys red lipstick with her Mastercard.

The advertiser who ran the ad is fed a report from Google, listing the sale along with other transactions in a column that reads “Offline Revenue” – only if the web surfer is logged into a Google account online and made the purchase within 30 days of clicking the ad. The advertisers are given a bulk report with the percentage of shoppers who clicked or viewed an ad then made a relevant purchase.

Most powerful tool

It’s not an exact match, but it’s the most powerful tool Google, the world’s largest ad seller, has offered for shopping in the real world. Marketers once had a patchwork of consumer data in their hands to triangulate who saw their ads and who was prompted to spend. Now they had far more clarity.

Google’s ad chief, Sridhar Ramaswamy, introduced the product in a blog post, writing that advertisers using it would have “no time-consuming setup or costly integrations.” Missing from the blog post was the arrangement with Mastercard.

Early signs indicate that the deal has been a boon for Google. The new feature also plugs transaction data into advertiser systems as soon as they occur, fixing the lag that existed previously and letting Google slot in better-performing ads.

Malcolm said her agency has tested the card measurement tool with a major advertiser, which she declined to name. Beforehand, the company received $5.70 in revenue for every dollar spent on marketing in the ad campaign with Google, according to an iProspect analysis. With the new transaction feature, the return nearly doubled to $10.60.

“That’s really powerful,” Malcolm said. “And it was a really good way to invest more in Google, frankly.”

But some privacy critics derided the tool as opaque. EPIC submitted a complaint about the sales measuring tack to the US Federal Trade Commission last year. A report in August that Facebook Inc. was talking with banks about accessing information for consumer service products sparked similar criticism. For years, Facebook and Google have worked to link their massive troves of user behaviour with consumer financial data.

And financial companies have plotted ways to tap into the bounty of digital advertising. The Google tie-up isn’t Mastercard’s only stab at minting the data it collects from customers. The company has built out its data and analytics capabilities in recent years through its consulting arm, Mastercard Advisors, and gives advertisers and merchants the ability to forecast consumer behaviour based on cardholder data.

Ad buyers that work with Google insist that the company is careful to maintain the walls between transaction information and web behaviour, keeping any info flowing to retailers and marketers anonymous. “Google is really strict about that,” said Malcolm.

Before launching the product, Google developed a novel encryption method, according to Jules Polonetsky, head of the Future Privacy Forum, who was briefed by Google on the product. He explained that the system ensures that neither Google nor its payments partners have access to the data that each collect.

“They’re sharing data that has been so transformed that, if put in the public, no party could do anything with it,” Polonetsky said. “It doesn’t create a privacy risk.”

Future Privacy Forum, a non-profit, receives funding from 160 companies including Google.

Google’s ad business, which hit $95.4bn in 2017 sales, has maintained an astounding growth rate of about 20% a year. But investors have worried how long that can last. Many major advertisers are starting to funnel more spending to rival Amazon, the company that hosts far more, and more granular, data on online shopping.

In response, Google has continued to push deeper into offline measurements. The company, like Facebook and Twitter, has explored the use of “beacons,” Bluetooth devices that track when shoppers enter stores.

Some ad agencies have actively talked to Google about even more ways to better size up offline behaviours. They have discussed adding features into the ads system such as what time of day people buy items and how much they spend, said John Malysiak, who runs search marketing for the Omnicom agency OMD USA.

“We’re trying to go deeper with Google,” he said. “We’d like to understand more.” Google declined to comment on the discussions.

Trump accuses Google of biased searches

By Darlene Superville and Barbara Ortutay for WWayTV3 

President Donald Trump on Tuesday accused Google and other U.S. tech companies of rigging search results about him “so that almost all stories & news is BAD.” He offered no evidence of bias, but a top adviser said the White House is “taking a look” at whether Google should face federal regulation.

Google pushed back sharply, saying Trump’s claim simply wasn’t so: “We never rank search results to manipulate political sentiment.”

The president’s tweets echoed his familiar attacks on the news media — and a conservative talking point that California-based tech companies run by CEOs with liberal leanings don’t give equal weight to opposing political viewpoints. They also revealed anew his deep-seated frustration he doesn’t get the credit he believes he deserves.

The president, who has said he runs on little sleep, jumped onto Twitter before dawn Tuesday to rehash his recent complaints about alleged suppression of conservative voices and positive news about him.

Related Article: Las Vegas shooting leaves GOP-backed gun bills in limbo
He followed that up with vague threats in Oval Office comments.

“I think Google has really taken advantage of a lot of people, and I think that’s a very serious thing. That’s a very serious charge,” Trump said, adding that Google, Twitter, Facebook and others “better be careful, because you can’t do that to people.”

Trump claimed that “we have literally thousands and thousands of complaints coming in. … So I think that Google and Twitter and Facebook, they’re really treading on very, very troubled territory and they have to be careful.”

Larry Kudlow, the president’s top economic adviser, told reporters later that the White House is “taking a look” at whether Google searches should be subject to some government regulation. That would be a noteworthy development since Trump often points proudly to his cutting of government regulations as a spur for economic gains.

In his tweets, Trump said — without offering evidence — that “Google search results for ‘Trump News’ shows only the viewing/reporting of Fake New Media. In other words, they have it RIGGED, for me & others, so that almost all stories & news is BAD. Fake CNN is prominent. Republican/Conservative & Fair Media is shut out. Illegal?” He added, again with no evidence, that “96% of results on “Trump News” are from National Left-Wing Media, very dangerous.”

A search query Tuesday morning, several hours after the president tweeted, showed stories from CNN, ABC News, Fox News and the MarketWatch business site, among others. A similar search later in the day for “Trump” had Fox News, the president’s favored cable network, among the top results.

Google, based in Mountain View, California, said its aim is to make sure its search engine users quickly get the most relevant answers.

“Search is not used to set a political agenda and we don’t bias our results toward any political ideology,” the company said in a statement. “Every year, we issue hundreds of improvements to our algorithms to ensure they surface high-quality content in response to users’ queries. We continually work to improve Google Search and we never rank search results to manipulate political sentiment.”

Experts suggested that Trump’s comments showed a misunderstanding of how search engines work.

Google searches aim to surface the most relevant pages in response to a user’s query, even before he or she finishes typing. The answers that appear first are the ones Google’s formulas, with some help from human content reviewers, deem to be the most authoritative, informative and relevant. Many factors help decide the initial results, including how much time people spend on a page, how many other pages link to it, how well it’s designed and more.

Trump and some supporters have long accused Silicon Valley companies of being biased against them. While some company executives may lean liberal, they have long asserted that their products are without political bias.

Media analyst Ken Doctor said it doesn’t make sense for mass-market businesses like Google to lean either way politically. He characterized the complaints as a “sign of our times,” adding that, years ago, if the head of General Electric was supporting a Republican candidate, people who disagreed wouldn’t then go out and boycott GE products.

“The temperature has risen on this,” Doctor said.

Steven Andres, who teaches about management information systems at San Diego State University, said people often assume that if you give a computer the same inputs no matter where you are that you “get the same outputs.”

But it doesn’t work that way, he said. “You’re seeing different things every moment of the day and the algorithms are always trying to change the results.”

Trump didn’t say what he based his tweets on. But conservative activist Paula Boylard had said in a weekend blog post that she found “blatant prioritization of left-leaning and anti-Trump media outlets” in search results.

Boylard based her judgments on the political leanings of media outlets on a list by Sharyl Attkisson, host of Sinclair Television’s “Full Measure” and author of “The Smear: How Shady Political Operatives and Fake News Control What You See, Think, and How You Vote.” Sinclair is a significant outlet for conservative views.

Trump began complaining about the issue earlier this month as social media companies moved to ban right-wing “Infowars” conspiracy theorist Alex Jonesfrom their platforms. The president also argues regularly — and falsely — that the news media avoid writing positive stories about him and his administration.

Jones is being sued for saying the 2012 shooting massacre at Sandy Hook Elementary School was staged. Jones has since said he believes the shooting did occur and has argued that the lawsuit should be dismissed because he was acting as a journalist.

Trump has praised Jones’ “amazing” reputation.

The issue is also of concern on Capitol Hill, where the House Energy and Commerce Committee, chaired by Rep. Greg Walden, R-Ore., recently announced that Twitter CEO Jack Dorsey is scheduled to testify before the panel on Sept. 5 about the platform’s algorithms and content monitoring.

By Mark Bergen and Christopher Palmeri for Business Day 

A backlash against Apple and Google app stores is gaining steam, with a growing number of companies saying the tech giants are collecting too high a tax for connecting consumers to developers’ wares.

Netflix and video game makers Epic Games and Valve are among companies that have recently tried to usurp the app stores or complained about the cost of the tolls Apple and Google charge.

Grumbling about app store economics isn’t new. But the number of complaints, combined with new ways of reaching users, regulatory scrutiny and competitive pressure are threatening to undermine what have become digital gold mines for Apple and Google.

“It feels like something bubbling up here,” said Ben Schachter, an analyst at Macquarie. “The dollars are just getting so big. They just don’t want to be paying Apple and Google billions.”

Apple and Google launched their app stores in 2008, and they soon grew into powerful marketplaces that matched the creations of millions of independent developers will billions of smartphone users. In exchange, the companies take up to 30% of the money consumers pay developers.

For most of the decade, the companies won praise for helping build an app economy that’s projected to grow to $157bn in 2022, from $82bn last year. But more recently, smartphones and apps have become so important for reaching customers that these app stores have been criticised for taking too big a share of the spoils. Rather than supporting innovation, Apple and Google are being talked about as tax collectors inhibiting the flow of dollars between creators and consumers.

“They’re very aggressive about making sure companies aren’t trying to work around their billing,” said Alex Austin, co-founder of mobile company Branch. “They have whole teams reviewing these flows to ensure they get their tax.”

Last week, Schachter co-authored a report arguing that current app store fees were unsustainable. Apple and Google take 30% of subscription dollars and in-app purchases made on iPhones and Android phones using Google’s app store (effectively all those outside China). About two years ago, the companies lowered that cut to 15% in some cases.

If app store commissions fell to a blended rate of 5% to 15%, it would knock up to 21% off Apple’s earnings, before interest and tax, by fiscal 2020, Macquarie estimated. Google could lose up to 20% by the same measure, according to the brokerage firm. The technology giants are expected to earn more than $50bn each, before interest and tax, in 2020, according to analyst forecast data compiled by Bloomberg.

This is particularly worrying for Apple investors, who are expecting the App Store to support the growth of the company’s services business. Apple often highlights the financial success of its App Store on conference calls with analysts.

Alphabet’s Google is susceptible given its legal problems. A recent EU anti-trust ruling requires the company to stop automatically installing its app store on Android phones in Europe. (Google is fighting the charges.) This may compel more app makers to circumvent Google, luring in customers through the web or through partnerships with other companies. “Around the world, everyone is looking for ways to push back against American tech,” Schachter said. “This feels like a natural way to go about it.”

Complaints about app store taxes became louder in 2015 as Apple and Google waded deeper into the digital content business, making them rivals, not just digital distribution partners. In 2015, music streaming company Spotify began e-mailing customers saying that they should cancel subscriptions purchased through Apple’s app store.

On Tuesday, video streaming company Netflix said it’s testing a way to bypass Apple in-app subscriptions by sending users to its own website. Currently, Netflix users on iPads and iPhones can subscribe via the App Store’s in-app purchasing system. This makes subscribing simpler, but also gives Apple a 15% cut of those subscriptions. And as of May, Google Play billing for Netflix was unavailable to new or rejoining customers, according to Netflix’s website.

On iPhones in the US, Netflix was the number one entertainment app by consumer spend and the most downloaded entertainment app on the Google Play store over the last 90 days, according to App Annie, which tracks the industry.

The video game industry has also worked to avoid app store taxes this year. Valve’s Steam, the largest distributor of video games for PCs, planned to release a free iPhone app that let gamers keep playing while away from their computers. Apple blocked the app. Soon after, the tech giant updated its app review guidelines to ban anything that looks like an app store within an app or gives users the ability to “browse, select, or purchase software not already owned or licensed by the user”, according to Reuters.

More recently, Epic Games, the maker of hit video game Fortnite, opted to ditch Google’s app store. Epic executive Tim Sweeney said the 30% app store fee is a “high cost” in a world where publishers must bear the expense of developing, operating and supporting their games. “Middlemen distributors are no longer required.”

Fortnite has grossed $200m on the Apple App Store since its release there in March, according to Sensor Tower, which tracks app purchases. Apple could make as much as $135m in fees from the title, Sensor Tower estimates, while Google misses out on at least $50m.

By Denis Balibouse for Wired

In 2010, Google made a moral calculus. The company had been censoring search results in China at the behest of the Communist government since launching there in 2006. But after a sophisticated phishing attack to gain access to the Gmail accounts of Chinese human rights activists, Google decided to stop censoring results, even though it cost the company access to the lucrative Chinese market.

Across nearly a decade, Google’s decision to weigh social good over financial profit became part of Silicon Valley folklore, a handy anecdote that cast the tech industry as a democratizing force in the world. But to tech giants with an insatiable appetite for growth, China’s allure is just as legendary.

The country has more internet users—772 million—than any other country. Hundreds of millions more are not yet connected to the internet. The dizzying prospect of a billion new users reportedly prompted Facebook CEO Mark Zuckerberg to offer President Xi Jinping the chance to name his first daughter in 2015. (Xi declined.) A more typical arrangement is the one made by LinkedIn, which agreed to play by local censorship rules.

Now, according internal documents obtained by The Intercept, Google itself may soon rebalance its moral accounts, just as lawmakers and consumers around the globe begin to reckon with industry’s potential to spread disinformation, sow social discord, and prop up authoritarian regimes. The Intercept said Google is in advanced stages of plans to launch a custom Android search app in China that will comply with the Communist Party’s harsh censorship policies on human rights, democracy, free speech, and religion.

“This an extremely disappointing move,” says Eva Galperin, director of cybersecurity for the Electronic Frontier Foundation. Google’s willingness to censor its own results takes the onus away from the Chinese government. “They are essentially using Google as a propaganda tool and Google is letting themselves be used.”

A spokesperson for Google told WIRED, “We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.”

Google never fully exited China, even after its search service was blocked. The company has three offices and more than 700 employees in China. Last month, Google launched a so-called mini-game on China’s popular WeChat service.

The search project, code-named Dragonfly, began in spring 2017, but accelerated in December after a meeting between top Chinese officials and Google CEO Sundar Pichai, the Intercept says. Google has already demoed the app with Chinese government. If China approves the app, it could be launched within six to nine months.

In the documents, Google says it will automatically filter websites blocked by China’s so-called Great Firewall, The Intercept reports. Banned websites will be removed from the first page of search results, with a disclaimer saying “some results may have been removed due to statutory requirements.” Wikipedia and the BBC are cited as examples of sites that could be censored. The documents also say that Google’s search app will “blacklist sensitive queries,” by returning no results when people search for certain words or phrases. The restrictions would extend beyond text search. Features like image search, automatic spell check, and suggested search will also comply with the government’s blacklists.

Google is not the only company revving up its presence in China. Last August, Apple, which makes the vast majority of its products in China and reported sales of nearly $45 billion in Greater China in the year ended September 2017, removed virtual private network (VPN) apps from the App store. In 2016, the New York Times reported that Facebook was developing software for a censorship tool that would enable a third party to monitor popular stories and topics in China and then decide whether those posts should be visible to users.

“Facebook should also be ashamed of itself,” Galperin says. “It is one thing for the government to censor you, and another to say stand back and say, ‘Don’t trouble yourself with having to repress me, I’m just going to repress myself.’”

A 2008 Citizen Lab study said search engines from Google, Microsoft, and Yahoo all censored certain content in China, and “may be engaged in anticipatory blocking,” before the government even asked.

News about Google’s plans comes as tech workers have begun organizing against some of their employers’ business decisions. Meredith Whittaker, the founder of Google Open Research and co-director of AI Now, an institute focused on ethics and artificial intelligence at New York University, was involved in protests within Google to oppose a company contract with the Pentagon to apply artificial intelligence to drone footage in conflict zones. Wednesday, Whittaker tweeted that Google’s censorship could violate Article 19 of the Universal Declaration of Human Rights, as well as Pichai’s recent guidelines on AI ethics.

Google tops SA’s best places to work

Branding firm, Universum, has released its Most Attractive Employer rankings for 2018. In it, it lists the companies that South African professionals are most keen to work for, based on aspects such as salary expectations, concerns relating to employment, goals (both short and long term), expectations around training and development and the importance of corporate culture.

The survey for this ranking was carried out between September 2017 and April 2018, and involved 21 686 professionals in a range of environments covering 35 industries and 88 professions.

These included 9 031 professionals in business/commerce, 3 197 in engineering/technology, 4 2855 in humanities, 2 289 in natural sciences, 1 627 in health care/health sciences and 1 248 in law.

Of these categories, Google ranked top in the business/commerce and engineering sections.
The company ranked second in the humanities division, fourth in law and eighth in natural sciences.

Universum’s Winani Ndlovu was quoted in a Business Tech article as saying, “Despite the high unemployment levels talent is facing, they are reporting that being aware of an employer and their staffing needs is not enough to drive the desire to work for that employer.

“Employers need to clearly articulate their value proposition to assist them in making an informed decision before joining the organisation. Clearly having a strong employer brand is imperative for the attraction and retention of talent.”

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My Office News Ⓒ 2017 - Designed by A Collective


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