When Good Companies Go Public

    March 14, 2007
    WebProNews Staff

This is what happens when good companies go public: the principles that made them good, even necessary, to the point of inspiring a romantic loyalty among their customers, are whittled away at until only those principles which are profitable remain. If it’s true that Google is reconsidering its view of Network Neutrality, let it be said that this is the reason why.

Google says it’s not true, by the way, but we’ll get to that later. This is an exploration of what could happen, a seemingly very likely ethical pickle the search company could find itself in down the road.

Don’t be evil. That was Google’s guiding mantra from its inception. What that meant wasn’t exactly clear, but it tugged at the hearts of an Internet populace worn thin by advertiser invasiveness, and what you might call a corporate moral relativism. Google’s image was magical, utopian, an affront to the yahoos out there wringing coins from clicks without concern for how. And Googlemania ensued.

These were their causes: Freedom of information; environmental sensitivity; user-conscious development; speed and efficiency; academic, intellectual, philosophical excellence; and Network Neutrality for all.

That last cause was pressed especially by Vinton Cerf, Google vice president and Internet Evangelist, who swore litigious vengeance against AT&T and Verizon if they followed through on a two-tiered Internet system, and by Google co-founder and CEO Sergey Brin, whose Net Neutrality pleas fell on deaf ears amid a telco-controlled Congress.

But Brin, pauvre, pauvre Brin. It’s hard to call him a staunch corporate moralist. Reason must prevail when there is doubt, as Brin uncomfortably illustrated in 2004, a year before Google’s historic IPO, as Playboy magazine questioned him about China, Google’s need to be there, and how it related to Google’s standard Don’t Be Evil policy.

And there it was: evil is an evolving, fluid concept to be defined and redefined as necessary. The new Google motto is "be good," whatever that means. But the philosophy does seem to include a tolerance for a little evil, or at least enough evil to get by in this dog-eat-dog world, enough evil to censor search results in China to be sure.

So after a year of grandstanding on the cause of Net Neutrality, Giga Om’s Drew Clark brings the reader’s attention to Google Senior Policy Counsel Andrew McLaughlin, speaking at the Tech Policy Summit in San Jose, Calif., last month:

“The first view, the strong view of net neutrality, has some very powerful arguments, but the reason we wouldn’t go for it” is purely pragmatic, McLaughlin said. Bell companies are going down the road of paid QoS, so it would be better to find a non-discrimination rule that worked.

“The danger of paid QoS is that it becomes the normality default, and the best efforts Internet is left to atrophy,” he continued. That would be a disaster for all of us. Competition, through different network alternatives, is going to ameliorate that danger.”

We contacted Google to see what was up, to see if the search giant was changing its postition. Adam Kovacevich, Google’s Global Communications and Public Affairs Manager, said Google’s as pro-Net Neutrality as it ever was.

"Google’s position on net neutrality has not changed one bit," said Kovacevich.  "We strongly believe that Congress must take action to ensure a free and open Internet, in the face of a highly concentrated broadband market. Furthermore, Google’s position — which we testified to last year in Congress — is that broadband network operators should not be permitted to charge any content owner extra fees or extra tolls. We continue to support net neutrality legislation by Senators Dorgan and Snowe, and by Representative Markey, and we remain steadfast members of the coalition supporting net neutrality."

Clark clarifies with a Google spokesperson, who called McLaughlin’s comments "a personal view."

But the timing of Clark’s article is what is most interesting because it highlights an internal inconsistency occurring at a time when search engine companies are doing more business with phone companies and media companies than ever before.

Google is already headed down the path of becoming Media Company, Inc., and has the money, the power, the equipment (and some would argue the inclination) to become an Internet access provider. One might even say that, in the future, there will be no demarcation line between media companies and access providers; the eventuality of their merging seems especially inert.

And then you read that AT&T CEO Ed Whiteacre approached Yahoo last year during a stock plunge to inquire about purchasing the company. This is interesting, especially since at one time Big Internet vs. Big Telco were at the center of this debate. Just as efforts to persuade Congress, the FCC, and the FTC to stay out of this failed, and as AT&T superficially agreed to uphold Net Neutrality provisions for approval of their Bell South merger (similar to the present Congress’s nonbinding resolutions), Whiteacre has a change of heart? Or is it a change in strategy?

Acquiring Yahoo presents a large conflict to be resolved: Yahoo’s historical support of Net Neutrality and AT&T’s stance against it. Luckily, Yahoo turned Whiteacre’s proposal down.

And now, back to Google and the moral dilemma. Google has a responsibility to keep the cash coming in for its shareholders, its pensions, and to be able to continue to attract the best talent in the business – a responsibility to continually produce incentives to invest. The future isn’t just in search, Google’s core business, but in entangling alliances and strange bedfellows to take all of it to the next level.

You have to ask then, when push comes to shove later – and it will come to that – what will Google decide about Net Neutrality?

Well, instead of answering that impossible question, let’s revisit another moral dilemma faced by a publicly owned mega-corporation. In the throes of a national crisis related to gas prices, Exxon-Mobil CEO and Chairman Rex Tillerson appeared on Today for a no-holds-barred interview with Matt Lauer.

Lauer asked: Would Exxon-Mobil be willing to lower profits over the summer to help out in this time of need and crisis as it’s been described?

Tillerson: Well, we work for the shareholders. And the investors who own our stock are over two million Americans. A lot of pension plans, a lot of teacher retirement plans and our job is to go out and make the most money for those people so their pensions are secure so that they see the benefits of our work…we’re in the business to make money.

As Lauer pointed out, that was a ‘no.’
So what will Google choose when the time comes, money or its principles?