Ten years later, Microsoft President Brad Smith said in an interview with Bloomberg Technology’s Emily Chang that the way Google does business “is a threat to democracy itself.”
“Google has sucked the oxygen out of the opportunities for people who create content,” Smith said. “When you see the impact on local news, what you’re seeing increasingly is a threat to democracy itself.”
At issue is a lack of competition in the search and ad tech markets that are controlled by Google, Smith said in March 2021 in written testimony to the House antitrust subcommittee. Microsoft was preparing to testify at a Congressional hearing focusing on Big Tech’s impact on local news.
Microsoft focused on Google’s dominance in advertising and said the tech industry has contributed to the erosion of local journalism.
“The problems that beset journalism today are caused in part by a fundamental lack of competition in the search and ad tech markets that are controlled by Google,” Smith wrote, according to CNN.
Google’s share of the U.S. digital ad market in 2020 was 28.9 percent — a 12.2-percent increase over 2020, despite the covid-19 pandemic, according to a PwC report commissioned by the Interactive Advertising Bureau. Facebook’s share was Facebook’s was 25.2 percent, according to eMarketer. Amazon’s share was more than 10 percent, CNBC reported.
In 2005, U.S. newspapers brought in a record $49.435 billion in combined total ad revenue. Newspaper revenue fell dramatically from 2008 to 2018. Ad revenue fell from $37.8 billion in 2008 to $14.3 billion in 2018, a 62-percent decline.
“It has created this huge hole in opportunity for people to earn a living by writing and creating news. It’s very clear where it has gone,” Smith said. He referred to Alphabet’s first-quarter earnings that showed almost $45 billion in digital advertising.
“What Google has fundamentally done is redesign and re-engineer the web so that if you want to make money from content based on advertising, you have to do it through their exchange by using their tools and paying money to and through Google.
“The open web is now open in theory only because if people can’t make a living by generated content, then they just are forced to go do something else,” Smith said. “When you see the impact of that on local news, what you’re seeing increasingly is a threat to democracy itself. I think what we’re focused on is seeing what we can do to sort of restore some of these opportunities for others across the web.”
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