The One Bit of Info Google Withholds: How It Works
Advertisers, competitors and Wall Street analysts are frustrated by the company's secrecy. — MOUNTAIN VIEW, Calif. — Google Inc. evolved from a tiny start-up to the shining star of American enterprise in less than a decade by bringing knowledge to billions of people.
Context & Ripple Effects
Google's rapid rise had already made its approach a subject of coverage, including an examination of Google's view of the world. The Los Angeles Times story identifies a sharper consequence of that scale: advertisers, rivals and Wall Street analysts lack visibility into the operating details they use to assess the company.
The issue is not merely public curiosity. Google controls information that each of those groups needs to compare its performance, plan against it or value it.
First-order effects
- Advertisers, competitors and Wall Street analysts must make spending, strategic and valuation judgments with less operational information from Google than they want.
- Google retains control over the metrics and methods by which outside parties evaluate its business.
Second-order effects
- Advertisers and analysts are pushed toward inferring Google's performance from observed outcomes rather than management disclosure, weakening their ability to isolate what drives results.
- Competitors cannot readily benchmark their own products or advertising operations against Google's internal practices, making Google's informational advantage part of the competitive contest.
Third-order effects
- If large internet platforms can withhold the workings that customers, rivals and investors seek, market power increasingly includes control over the evidence used to evaluate the platform.
- The resulting tension centers on whether platform disclosure is treated as a business choice or as a condition for informed advertising markets and investment analysis.
The trend: Google is an early example of platform competition in which proprietary operating information becomes a strategic asset alongside the service itself.