How Google will push product prices up
I read an interesting article in the Belfast Telegraph today (“Get a life, or just Google it”) about Google’s plan to store all data it gains from users permanently to offer more relevant websites and product advertisments. Ignoring the obvious privacy concerns, there may be another issue with this- expanding Google’s price comparison services (eg Froogle) may be pushing the prices that consumers pay up, not down.
“For example if you want to buy a particular book from a certain site, Google could locate other sites selling the same book at a cheaper price or it could recommend other books by the same author.” The Telegraph
The reason is that competitors know exactly what price they have to beat, all it takes is a quick search. Without this, they only have a vague idea and will often offer very low prices in case a competitor can beat them. Paul Klemperer, the UK governments auction theorist, states this more formally:
Transparent internet prices are readily observable by a firm’s competitors so lead, in effect, to an “ascending” auction; a firm knows if and when its others are being beaten and can rapidly respond to its competitors’ others if it wishes. So, viewing each car sale as a separate auction, the price any consumer faces falls until all but one firm quits bidding to sell to him. …
On the other hand, shopping to buy a car from one of competing dealers is very like procuring in a (first-price) “sealed-bid” auction. It is typically impossible to credibly communicate one dealer’s other to another. (Car dealers often deliberately make this hard by refusing to put an other in writing.) So from the buyer’s perspective it is as if sellers were independently making sealed-bid others in ignorance of the competition. …
“Why Every Economist Should Learn Some Auction Theory”, Paul Klemperer
Other concerns are that the only companies that can offer very low prices across the board are large firms, as they buy in such bulk and have low cost per transaction due to their size. Again, Google’s price comparison service can be a disadvantage to small firms.
To end on a more positive note, I am just highlighting some issues I forsee that may come to be important in the future. At present it is clear that the Internet as a who has enabled small companies to reduce their selling costs, sell to a wider audience and also allow consumers to easily compare and, in general, buy products at prices far lower than the high street.
googleFun with Google code search
Google has just released their newest toy from the labs: Google Code Search. Along with being a useful tool for development, and perhaps finding security holes, you can also have alot of fun with it.
In case you were wondering, there are:
"One World, one Web, one Program." - Microsoft(R) promotional ad "Ein Volk, ein Reich, ein Fuhrer." - Adolf Hitler
" 14: my $storage = Springfield::connect_empty; my $homer = NaturalPerson->new( firstName => ‘Homer‘, name => ‘Simpson‘ ); Springfield::test( !defined $storage->id( $homer ) ) “
"addPlayChat("4 Oompa Loompa“,”Oompa Loompa Doopida Dee”, oompa);”
Hunting for interesting quotes is getting to be quite an addiction for me. I am currently investigating the number of pieces of code written by “Your Mum”.
Also of interest is the Linux Kernelswear count project.
On the fly translate with .htaccess
A neat trick I saw on corz.org is that you can do on the fly translation using .htacces and Google or Altavista translate.
By re-writing anything ending in -fr, for example, to the url of the french google translator. For example, the .htaccess will translate on the fly:
Options +FollowSymlinks RewriteEngine on RewriteRule ^(.*)-fr$ http://www.google.com/translate_c?hl=fr&sl=en&u=http://www.rustyspigot.com/$1 [r,nc] RewriteRule ^(.*)-de$ http://www.google.com/translate_c?hl=de&sl=en&u=http://www.rustyspigot.com/$1 [r,nc] RewriteRule ^(.*)-es$ http://www.google.com/translate_c?hl=es&sl=en&u=http://www.rustyspigot.com/$1 [r,nc] RewriteRule ^(.*)-it$ http://www.google.com/translate_c?hl=it&sl=en&u=http://www.rustyspigot.com/$1 [r,nc] RewriteRule ^(.*)-pt$ http://www.google.com/translate_c?hl=pt&sl=en&u=http://www.rustyspigot.com/$1 [r,nc]
Wikipedia make all external links no-follow
In a move that was a long time coming, Wikipedia has decided to attatch rel=nofollow to all outgoing links. This small change will mean that all links from Wikipedia will be ignored by Google (and Msn, Yahoo) when weighting how important sites are.
This will have too affects. The first is that spamming of Wikipedia will reduce dramatically, freeing up editors to spend their time increasing the quality of existing pages rather than removing spam.
The second is that some existing sites that rely heavily on honest Wikipedia articles for page rank will drop dramatically in the rankings.
Googles future?
Cringley has written an article on disecting the secretive future plans of Google.
Google now controls more network fiber than any other organization, and has been buying up real estate for local server farms. In Cringleys example, Google has bought out 520 acres of industrial real estate. Why would Google need such a large amount of server space for a relatively small population?
“Of course this doesn’t answer the question why Google needs so much capacity in the first place, but I have a theory on that. I think Google is building for a future they see but most of the rest of us don’t. I’ll go further and guess that Google is planning to build similar data centers in many states and that the two centers they are apparently preparing to build here in South Carolina are probably intended mainly to SERVE South Carolina. That’s perhaps 100,000 servers for four million potential users or 40 users per server. What computing service could possibly require such resources?
The answer is pretty simple. Google intends to take over most of the functions of existing fixed networks in our lives, notably telephone and cable television.”
It all makese interesting reading, and Cringley’s idea of Google intending on providing high bandwidth services en mass through many local datacenters does explain the unusual real estate buying that has been going.