For search engines like Google, finding that one correct answer becomes particularly difficult when people have numerous parameters they want satisfied: Which vacuum cleaner is cheapest but also energy-efficient and good on thick carpets and won’t scare the dog? To balance those competing preferences, you need a great vertical-search engine, which was something Adam and Shivaun had thought a lot about.
Soon the Raffs began daydreaming about turning their idea into a moneymaker. They didn’t have the funds to compete with huge dating sites like Match.com, so they applied for a couple of patents and began brainstorming. They believed that their vertical-search technology was good — better, in fact, than almost anything they had seen online. Best of all, it was built to work well on almost any kind of data set. With just a bit of tinkering, it could search for cheap airline tickets, or great apartments, or high-paying jobs. It could handle questions with hard-to-compare variables, like what’s the cheapest flight between London and Las Vegas if I’m trying to choose between business class or leaving after 3 p.m.?
As far as they could tell, their search technology performed better on such problems than Google did, which Adam discovered when he tried to buy an iPod online. “I spent half an hour searching Google for the lowest price, and it drove me completely mad,” he told me. It was impossible for him to figure out which sites were selling iPods and which were selling accessories, like headphones or charging cords. Or Google would show Adam one price, but then the actual price was completely different. Or there was an extra charge for shipping. It seemed to Adam his technology would do a much better job.
Google executives, had they known of Adam’s frustrations, probably wouldn’t have been surprised. For years, Google had been trying to build a tool for comparing online prices. “The idea was you should be able to input any item, and we’d show you the best place to buy it,” says Brian Larson, a technical lead for what was then named Froogle and today is called Google Shopping. Larson’s team was small — just himself and one other programmer at first, and roughly a dozen people at its height — and Larson would regularly test how Froogle compared with other online price-comparison services. “Sometimes we were neck and neck; sometimes, not so much,” Larson said. “We had a hundred million product listings, which was better than competitors.” But they were often outperformed by sites like PriceGrabber.com, which had many more employees devoted to price comparisons.
Froogle’s limitations tended to pop up particularly when users included too many search parameters. For a while, Larson had a specific test search that Froogle kept failing, something like “white running shoes and cheap and free shipping.” Inevitably, the first result would be a Christmas elf wearing running shoes that some guy was selling online. No matter how Google’s engineers fiddled with their coding, they couldn’t stop the elf from appearing as the top link. Eventually, a manager bought the elf so it wouldn’t appear in the search results anymore. “We made elf T-shirts,” Larson told me. “It became our mascot.”
Adam and Shivaun’s technology was good enough to tell the difference between an elf wearing running shoes and an actual pair of running shoes. It was good enough, in fact, to figure out which websites charged hidden shipping fees and which offered truly good deals. So the Raffs quit their jobs, hired a few programmers, spent months perfecting their technology and, in early 2006, unveiled Foundem.com, a vertical-search engine for finding cheap online prices, to a small group of friends and associates. Each time someone used Foundem to buy something, the Raffs would receive a small payment from the website making the sale. Adam and Shivaun weren’t sure their company would succeed — there were already a couple of other big price-comparison search engines, like PriceGrabber, NexTag and, of course, Google itself — but they figured this was how the internet was supposed to work: Two people with a new idea can take on giants and, if their technology is good enough, grow into colossi themselves.
The Raffs knew they would have to rely on Google to find customers. For one thing, as evidenced by the name Foundem, they weren’t marketing geniuses. (“It’s like we found ’em for you, you know?” Shivaun explained.) But early tests indicated that Foundem usually came up high in Google’s search results whenever people submitted queries like “compare prices xr-1000 motorcycle helmets.” Six months later, they opened Foundem to the world, and initial traffic was encouraging. “Search engines liked the site,” Shivaun told me. “That’s supposed to be the recipe for success.” As long as their vertical-search technology was strong, the Raffs figured, Google would guide shoppers to their door.
Google has succeeded where Genghis Khan, communism and Esperanto all failed: It dominates the globe. Though estimates vary by region, the company now accounts for an estimated 87 percent of online searches worldwide. It processes trillions of queries each year, which works out to at least 5.5 billion a day, 63,000 a second. So odds are good that sometime in the last week, or last hour, or last 10 minutes, you’ve used Google to answer a nagging question or to look up a minor fact, and barely paused to consider how near-magical it is that almost any bit of knowledge can be delivered to you faster than you can type the request. If you’re old enough to remember the internet before 1998, when Google was founded, you’ll recall what it was like when searching online involved AltaVista or Lycos and consistently delivered a healthy dose of spam or porn. (Pity the early web enthusiasts who innocently asked Jeeves about “amateurs” or “steel.”)
In other words, it’s very likely you love Google, or are at least fond of Google, or hardly think about Google, the same way you hardly think about water systems or traffic lights or any of the other things you rely on every day. Therefore you might have been surprised when headlines began appearing last year suggesting that Google and its fellow tech giants were threatening everything from our economy to democracy itself. Lawmakers have accused Google of creating an automated advertising system so vast and subtle that hardly anyone noticed when Russian saboteurs co-opted it in the last election. Critics say Facebook exploits our addictive impulses and silos us in ideological echo chambers. Amazon’s reach is blamed for spurring a retail meltdown; Apple’s economic impact is so profound it can cause market-wide gyrations. These controversies point to the growing anxiety that a small number of technology companies are now such powerful entities that they can destroy entire industries or social norms with just a few lines of computer code. Those four companies, plus Microsoft, make up America’s largest sources of aggregated news, advertising, online shopping, digital entertainment and the tools of business and communication. They’re also among the world’s most valuable firms, with combined annual revenues of more than half a trillion dollars.
In a rare display of bipartisanship, lawmakers from both political parties have started questioning how these tech giants grew so powerful so fast. Regulators in Missouri, Utah, Washington, D.C., and elsewhere have called for greater scrutiny of Google and others, citing antitrust concerns; some critics have suggested that our courts and legislatures need to go after tech firms in the same way the trustbusters broke up oil and railroad monopolies a century ago. But others say that Google and its cohort are guilty only of delighting customers. If these tech leviathans ever fail to satisfy us, their defenders argue, capitalism will punish them the same way it once brought down Yahoo, AOL and Myspace.
At the core of this debate is a question that is more than a century old: When does a megacompany’s behavior become so brazen that it violates the law? In the early 1900s, just after the Industrial Revolution, the federal government provided an answer by suing one of America’s largest companies, Standard Oil, on the novel theory that big becomes bad when a giant uses its dominance not only to defeat its competitors but also to extinguish the possibility that competition might occur.
In its technological innovation, Standard Oil was the Google of its day. The company’s founder, John D. Rockefeller, had become the richest man in America by spending millions of dollars hiring scientists to transform how oil was refined and transported. And those innovations earned the public’s admiration. In 1858, before Standard Oil was founded, lighting a home required whale oil, which cost up to $3 a gallon, putting illumination out of reach for all but the wealthiest of households. By 1885, after Standard Oil figured out how to refine kerosene, it cost just 8 cents a gallon to brighten the night. “Let the good work go on,” Rockefeller wrote to a partner. “We must ever remember we are refining oil for the poor man and he must have it cheap and good.”
Standard Oil’s technological discoveries gave the company huge advantages over its rivals, and Rockefeller exploited those advantages ruthlessly. He cut secret deals with railroads so that other firms had to pay more for transportation. He forced smaller refineries to choose between selling out to him or facing bankruptcy. “Rockefeller and his associates did not build the Standard Oil Co. in the boardrooms of Wall Street,” wrote Ida Tarbell, a muckraking journalist of the day. “They fought their way to control by rebate and drawback, bribe and blackmail, espionage and price cutting, and perhaps more important, by ruthless, never slothful efficiency of organization.”
In 1906, President Theodore Roosevelt ordered his Justice Department to sue Standard Oil for antitrust violations. But government lawyers faced a quandary: It wasn’t illegal for Standard Oil to be a monopoly. It wasn’t even illegal to compete mercilessly. So government prosecutors found a new argument: If a firm is more powerful than everyone else, they said, it can’t simply act like everyone else. Instead, it has to live by a special set of rules, so that other companies get a fair shot. “The theory was that competition is good, and if a monopoly extinguishes competition, that’s bad,” says Herbert Hovenkamp, co-author of a seminal treatise on antitrust law. “Once you become a monopoly, you have to start acting differently, and if you don’t, then what you’ve been doing all along starts breaking the law.”