BackTop Alphabet executive says Google Search akin to ‘cigarettes or drugs’: ‘Most profitable business ever’
A senior Google executive once likened the company’s search advertising business to selling drugs, calling it “one of the world’s greatest business models ever created” since the company can “ignore” users and focus on generating revenue from advertising.
PremiumA top Google executive had once called the company's search advertising business as ‘world’s greatest business model' rivalled by only illicit businesses like ‘cigarettes or drugs'.
Google Vice President for Finance Michael Roszak made the remarks during a training offered by the company on communications in July 2017.
In the document released online by the Justice Department, Roszak said, "Search advertising is one of the world’s greatest business models ever created… there are illicit businesses (cigarettes or drugs) that could rival these economics, but we are fortunate to have an amazing business"
“We've essentially been able to ignore one of the fundamental laws of economics - supply and demand. We could mostly ignore the demand side of the equation (users and queries) and only focus on supply side of advertisers, ad formats, and sales"
Roszak noted that Google made “smart marketing/distribution investments to get our product everywhere, but we could essentially tear the economics textbook in half"
Justice Department has used the document in the Google antitrust case against Google where the government is trying to prove that Google's anticompetitive tactics have helped it maintain a dominant position in the search business.
Google lawyers have objected to the document being used in the Antitrust case noting that it wasn't a business record and does not reflect the opinion of the company. A Google spokesperson told Bloomberg that the document was drafted for a public speaking class where the instructions were to say something hyperbolic and attention-grabbing.
What is Google Antitrust case?
Search giant Google is being sued by the US Justice Department over allegations that the tech giant smothered over the competition by paying companies like Apple, Verizon and others in order to make its search engine the first that users see when they open their devices, AP reported.
Google has argued that it dominates the search engine market because it is better than the competition while noting that users have the option of switching to other search engines with a couple of clicks.
The antitrust case is the biggest suit brought by the Justice Department since the body targeted Microsoft's dominance over the Windows operating system around 25 years back. The case was first filed during the Trump Administration in 2020 and the trial began on September 12 at the US District Court in Washington DC.
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