The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google

by Scott Galloway

Google gets to have it both ways: organic search preserves neutrality, while paid content allows ad revenue.

And no one complains.

Consumers trust organic results. We love this impartiality and click on organic results more often than ads.

just as one or two seemingly minor product features separated the other Four from their packs and turned them into world conquerors—Jobs’s

at Google the defining factors were the elegantly simple homepage and the fact that advertisers weren’t allowed to influence search results (organic search).

Neither feature may seem important two decades later, but at the time, they were a revelation.

They’ve gone a long way to cre...

This trust didn’t just extend to Google’s users, but just as important, to its corporate clients.

With Google’s auction formula, if advertisers wanted traffic, customers set the prices for each click. If demand drops, so do prices, and you pay just above what someone else was willing to pay,

building trust that Google is benign. The result is that corporate customers believe Google’s business is...

Compare this trust to the rest of media.

Most media outlets, literally and intentionally, don’t tell you where the bullshit starts or stops and pretend to have a Chinese wall between editorial and advertising. Some are cleaner than others, but money talks.

No amount of advertiser money can buy space on the Google homepage.

Google anticipated the need for a trust economy in the internet age and helped create it.

Google was able to grow revenues 23 percent that year and—here’s the key part—lower cost to advertisers by 11 percent.

Whether you’re the New York Times or Clear Channel Outdoor, a competitor lowered its prices 11 percent.

What if BMW was able to improve their cars dramatically each year while lowering prices 11 percent annually? The rest of the auto in...

And, yes, the rest of the media industry, sans Facebook, is having trouble ...

Similar to other horsemen, Google tends to drive prices down, not up.

Most consumer firms push in the other direction. They spend a lot of time trying to calculate the maximum price they can charge and capture all excess consumer value.

The irony is that Google’s victims invited the company in, letting Google crawl their data.

Now Google’s extraordinary market cap is equal to the next eight biggest media companies combined.

There are 3.5 billion search queries a day,20 so in essence the search algorithm gets one three-billionth better every time you search.

We signal our secret intentions with our queries and provide the Google search engine supernatural power in advertising.

Traditional marketing sorted us into tribes: Latinos, hicks, retirees, sports fans, soccer moms, and so on. Within those tribes, we are thought to be the same.

But with Google, our queries—along with the photos, emails, and all the other data we provide—identify us as individuals with distinct problems, goals, and desires. This intelligence gives God a leg up in the advertising business.

It can serve up ads that are more relevant, more benevolent—tailored to our personal happiness.

Much of marketing is the art (disguised as science) of how to b...

Google leaves the hard, expensive stuff to others and just gives the people what they want after they’ve raised their digital hand an...

Even better, Google pairs people with companies, via AdWords, before they may even know what they want (fly Del...

Journalism is hard, sometimes dangerous, work that pursues truth vs. just the commercial. The New York Times does it better than any media firm in the world.

However, increasingly, the paper is not good at extracting value from the skills and risk taking demonstrated in the newsroom.

In fact, Google and Facebook do a better job extracting value from Times journalists than t...

New York Times articles give these platforms tremendous credibility, and the Times in return gets . . . very little.

Today, the search industry is worth half a trillion dollars.

Some would argue more, as Amazon is technically a search engine with a warehouse attached.

living on Google’s search algorithm is a tenuous existence.

Google not only was crawling our content for free, it also was slicing and dicing that content for its users. When people were looking for a hotel in Paris, for example, Google would link to a New York Times travel article on Paris.

But at the top of the page it would place Google’s own ad for the Four Seasons Hotel.

The argument was that this arrangement brought traffic to the Times. It could sell these eyeballs to adverti...

Here’s the rub: as it was handling those searches, Google also was learning—better than the Times itself—exactly what the paper’s readers wanted and were likely to want in the future. And that meant Google could target those Times readers with far greater precision and make more money from each ad. As much as ten times more.

We committed one of the great missteps in modern business history.

Overnight we took a luxury brand, spread it through sewer-like distribution, and let the sewer owner charge less for it than we were charging in our own store, through subscriptions.

This, in a nutshell, is the problem with conglomerates—and the Innovator’s Dilemma.

The whole is often less than the sum of its parts.

In a sense, we and Google were both using each other. Google used our content to attract billions of clicks for its ads, and we used their sea...

However, Google had far gre...

Our fate was determined from the start.

With just one tweak, Google pummeled the Times, diverting millions in online revenue to other sites and cutting About’s value dramatically.

If Apple has managed to achieve a degree of immortality by converting itself into a luxury goods company,