Sunday, May 25, 2014, 08:39 pm PT (11:39 pm ET)
Google's current stance on patents with Android would have prevented Google from ever having existedJust over 15 years ago, two Stanford University students set out to commercialize PageRank, a brilliant new search engine concept they'd developed to organize the Internet's vast array of information. However, the same intellectual property rights Google now opposes in regard to Android would have prevented Larry Page and Sergey Brin from ever having got their company off the ground back then.
Google was built on the type of patent that Google doesn't respect today
Looking backward, the patented concept of PageRank (like most any other patent ever filed) might be viewed as a trivial, obvious and inevitable discovery. It is the very kind of thing that Google and its most strident fans commonly insist shouldn't be patented at all: a software concept built upon a series of algorithms.
However, PageRank U.S. Patent 6285999 was actually the result of significant, innovative efforts to develop a mechanism for searching and presenting results in an entirely novel way. It subsequently proved to be tremendously valuable in practice, and incredibly disruptive to the status quo of Internet directories and search services.
PageRank's patented search method rendered existing web search services (such as AltaVista and Inktomi) virtually obsolete within just a few short years, the same way that Apple's various iPhone patents, including Data Detectors , advanced the state of the art in phones so rapidly that every smartphone platform existing at its unveiling (Symbian, Palm, Windows Mobile and BlackBerry) went bust in a similarly short span of a few years.
Today, Google maintains that it and its Android partners should be able to infringe upon any patents Apple has related to iOS. However, if the same sort of patent anarchy had been the norm in the late 1990s, Google would have been trampled by copycat search engine offerings from Yahoo, Microsoft and other big players who once dominated the market.
Google's core competency in search built upon prior art subsidized by the government
In simple terms, the PageRank concept created a data meritocracy by discovering and highlighting useful information on web pages through an automated examination of incoming web links. While novel, the PageRank work that Page and Brin began at Stanford University in the mid 1990s wasn't something that had never been conceptualized before.
Research on the idea of discovering and highlighting influential ideas in published documents such as scientific journals began at least twenty years earlier in 1976, in Information Processing work funded by the U.S. National Science Foundation.
Two decades later in January 1998, when the PageRank patent was filed, the NSF was credited as having supported the invention through grants significant enough to require the patent's prominent acknowledgment that "the Government has certain rights in the invention."
This might remind you of Apple's Siri, or the development of the NCSA web browser, both of which were projects originally funded by the government before being commercialized by private companies interested in investing (and risking) private capital into ideas that seemed promising but still remained untested in the market.
Today, Google is fostering an "open" ideology that maintains that anyone else's patents involving any sort of prior art or foundational independent research should be fair game to appropriate without any compensation. But again, were that the case in 1998, Google simply would never have had an opportunity to shake up the stagnant web search business.
Google's government-granted exclusive monopoly on PageRank's technology
The PageRank patent is assigned to Stanford, where it was filed in January 1998 (Page is listed as its inventor). Before the end of 1998, Page and Brin founded Google in an effort to commercialize the invention. Google licensed the patent from the University on an exclusive basis in exchange for stock in the new company, creating a strong parallel with the way Apple commercialized technology from Xerox PARC (also in exchange for stock) in order to deliver the Macintosh in 1984.
The genius of PageRank helped Google to gain traction as a new type of search engine that stood in stark contrast to the less effective results offered by companies like AltaVista and Inktomi, which both attempted to create a vast searchable directory of everything on the Internet, a task that by the end of the 1990s was quickly approaching an impossibly impractical absurdity.
If it weren't for the U.S. Patent Office's enforcement of Google's exclusive rights to practice the PageRank invention, the work that Page and Brin had orchestrated and found private investment for would have been appropriated and copied by larger, better-funded existing search firms and the other even larger companies (like Yahoo and Microsoft) that were licensing that existing search technology.
However, simply having better, patented technology for search didn't in itself make Google commercially viable, because Internet users were never really interested in paying for search results, not even Google's new results that were clearly better than AltaVista's or Inktomi's services like HotBot, which had just outpaced AltaVista through better scaling.
Google was also funded by the type of patent that Google doesn't respect today
A year after PageRank was patented, startup GoTo.com filed an even more influential patent related to search: U.S. Patent US 6269361. Rather than pertaining to finding information on the web, GoTo's invention related to Paid Search Placement: a business model for funding search engines by presenting targeted ads related to what users were actually searching for.
Paid Search Placement was at least as novel and disruptive of an invention as PageRank, and it was even more important. Armed with an effective way to earn revenues while providing search services, search could finally become a real business, rather than an experiment funded by donations, speculative investment or relatively worthless banner ads that Internet users had already learned to ignore by the year 2000.
The unsustainable investment in Internet companies in the late 1990's — which were largely failing to actually make any significant profits — resulted the Dot Com Bubble bursting in 2000. The next year, GoTo changed its name to Overture and began partnering with Yahoo and Microsoft's MSN Search (powered by Inktomi and AltaVista) to begin monetizing their search engines via its Paid Search Placement invention.
Out of the ashes of the Dot Com Crash, Yahoo and Microsoft rapidly began earning search revenues via Paid Search Placement. Google, which was still privately owned, launched its own Paid Search Placement service in 2002, and a few weeks later Overture sued the company for patent infringement.
Google knew the value of patents, because it had paid Stanford University in exchange for exclusive access to the PageRank patent at the core of its initial search engine. It had also turned around and licensed its patented technologies to Yahoo. However, Google didn't want to pay Overture for its patents without a fight, which it waged over the next two years.
In 2003, Overture acquired AltaVista just two months after Yahoo bought Inktomi. Within six months, Yahoo then acquired Overture.
Yahoo now owned the Overture patents and inherited the smaller firm's legal fight with Google, a move that resulted in a settlement within the next month where Google finally agreed to license Paid Search Placement and other related patents in a deal involving 2.7 million Google shares, clearing the way for a Google IPO in August 2004, unobstructed by high profile patent litigation issues.
In Q4 2004, Google's first quarter as a publicly traded company, it reported revenues of $3.2 billion, nearly as great as Yahoo had reported for the full year: $3.6 billion. Google subsequently grew rapidly while Yahoo sputtered and plateaued, in part because Google had the exclusive rights to practice key search patents, including PageRank.
Google's outrageous patent hypocrisy
Armed with its own exclusive patents and having paid (relatively little) for the rights to practice its primary competitor's patents (which it had simply infringed for years while building its business, hoping that it could drive Overture out of business via Samsung-style infringement-litigation delay tactics), Google now had nothing holding it back from dominating PageRank web search monetized by Paid Search Placement.
Over the ten years since that Yahoo deal, Google has maintained an effective lock on Internet web search that has prevented any effective competition, much the same way that Microsoft's monopoly over PC operating systems had effectively prevented competition and experimentation with new alternative PC OS technologies (including NeXT, Solaris and OS/2) throughout most of the 1990s.
Contrast that with Apple's intellectual property related to iPhone, iPad and its other inventions: there has never been a time over the past seven years of iOS that other vendors have been constrained from introducing their own smartphones, tablets or other alternative mobile devices, ranging from netbooks to hybrid 2-in-1s, phablets or other experiments.
Virtually all of the companies Apple began competing with in smartphones in 2007 were larger and better positioned in the mobile industry. Even when Apple introduced the iPad in 2010, it was still a very risky experiment that was met by responses from Microsoft, its leading PC partners including HP and Dell, and a broad swath of other foreign hardware manufacturers.
Just like the fledgling Google around 2000, Apple's novel advancement of the state of the art in mobile devices intended to benefit from the same intellectual property rights designed to protect original inventions. However, Google rapidly shifted its stance on the value of patents as soon as it realized it might be able to again profit from a policy of willful infringement.
Don't Be Evil: 2004
Google's 2004 IPO prospectus famously included the phrase "Don't Be Evil," stating, "we believe strongly that in the long term, we will be better served—as shareholders and in all other ways—by a company that does good things for the world even if we forgo some short term gains."
By its IPO year, Google had already achieved a dominant share of the Internet's web search traffic, widely outpacing both Yahoo and Microsoft. It earned this status by developing a better product. Google's search results were not only more useful, but they were also presented within a clean, user-respectful interface rather than the annoying cesspool of flashing banner ads common among its competitors.
In stark contrast to the animated banners of Yahoo and Microsoft screaming for their users' attention, Google's ads were subtle text with simple links that users could click on if they found them useful. Google's combination of very useful search results and classy, more effective and certainly more tolerable text ads rapidly earned the company respect and a lofty reputation for being a "non-evil" company, along with quickly escalating revenues and profits.
Google launched a series of efforts to expand its offerings beyond basic web search, including acquisitions in 2003-2004 that resulted in Gmail, Picasa, Google Maps and Google Earth, all related to in some way to the company's patented search technologies and funded through wildly profitable Paid Search Placement advertising, which helped generate mountains of cash due to the extremely high profit margins (60 to 70 percent) inherent with selling, essentially, high volume software services.
For a company that defined itself with a "Don't Be Evil" credo, Google's competition-crushing domination of web search, its tying of related "free" services and its incredible profit margins protected by patents all appeared to be virtually identical to the company everyone equated with "evil" back in 2000: Microsoft, its competition-crushing domination of the PC OS, its tying of related "free" services (including its Internet Explorer browser) and its incredible profit margins (80 to 85 percent largely protected by patents.
For comparison, the "high margins" that Apple's critics like to complain about ranged from 30-45 percent over the same period of the last decade.
Google fights for PC survival: 2006
After Microsoft's interest in acquiring Google back in 2003 failed to materialize and its own search business began to fall far behind Google, the company began floating plans to more closely tie its own web search services into the upcoming release of Windows Vista, effectively leveraging its PC and browser monopoly power to kick Google to the curb, just as it had done to Netscape with Internet Explorer in the late 1990s.
Google responded to the increasing threat posed by Microsoft by financially supporting Firefox, Internet Explorer's primary alternative desktop browser, as well as partnering with Apple in its new Safari browser on the Mac in 2003. The company also helped to prop up support for Linux as a competitor to Windows.
Google couldn't have done any of those things if Microsoft had simply infringed Google's intellectual property to create a workalike knockoff service until the much smaller Google was forced out of business by an infringing copy of its own inventions wielded by a better-funded and more well-established, larger company.
In a world without patents, small inventors and startups like Google could be easily crushed by companies capable of using their own competitive ideas against them, the same way that Google today demands the right to use Apple's patented ideas to "compete" against Apple in the market.
In late 2005, Google quietly acquired a mobile startup founded by Andy Rubin, with the intention of developing a Java Mobile/Linux mobile platform to take on Microsoft's Windows Mobile, which at the time was viewed as a complementary threat — along with Vista — to Google's future ability to offer its ad supported web search services to Microsoft's Windows desktop PC and mobile users.
Vista flopped at launch in late 2006, sparing Google from having to worry about being pushed off the PC desktop. Just months later, Apple introduced iPhone, a tremendous advance in the smartphone state of the art.
Apple's iPhone not only obliterated the developing threat posed by Windows Mobile, but opened up an even closer partnership between Apple and Google by tightly integrating Google's web search and Google Maps service on the new device.
Apple implemented its Safari, YouTube and Maps apps in iOS to exclusively drive traffic to Google before the search giant was even aware that Apple intended to develop a sophisticated new phone platform. Google was as surprised to see Google Maps on the iPhone in its novel, touch-centric form as Apple's own customers were.
Google leverages its own monopoly: 2007-2010
Apple's new iPhone not only destroyed the prospects for Windows Mobile but also erased the potential relevance of Google's internal Android project, which was essentially an alternative to Windows Mobile and other "not-so-smartphones" of the day, including Symbian, Palm, BlackBerry and other Java Mobile implementations, including Rubin's prior art in contributing toward the development of Danger, the Java Mobile platform powering the T-Mobile SideKick.
After the iPhone was unveiled, Google immediately shifted its plans for Android to instead copy Apple's iOS model, basing its entire feature outline for Android upon the product Apple had demonstrated, right down to a new touch-centric version of Google Maps.
The following year, Google dropped its classy approach to web advertising by acquiring DoubleClick, a banner ads company with a business model tied to spying on user behavior via web cookies. Without any major competitors left in the web ads market, Google shifted to the same sort of spyware ads that Yahoo and Microsoft had been pursing during the Dot Com Era.
By the end of 2008, almost two years after Apple debuted its iPhone, Google launched its first Android phone with Windows Mobile licensee HTC: the T-Mobile G1. Android essentially remained a hobby for another year, when Google partnered with Verizon Wireless and Motorola to launch Android 2.0's Droid campaign, which directly targeted iPhone in late 2009.
In parallel, Google also shifted Chrome, created in 2008 in cooperation with Apple's open source WebKit project powering the Safari browser, into "Chrome OS" in the the summer of 2009, which promised to compete directly against Windows and OS X as a new desktop PC platform based on the WebKit browser Apple had funded and developed over the past five years.
Android Credulity reaches nearly unanimous acceptance in the tech world: 2010
Throughout 2010, Google began promoting both Android and Chrome OS as essentially the new "Windows." That year it also launched Google TV, which promised to lock up the television ad market in an end-run around broadcasters and cable companies, while also competing against Apple's three year old "hobby" of Apple TV.
That same year, Google also began work on Android 3.0 Honeycomb, which took direct aim at the new iPad Apple had released at the beginning of 2010. The existing 2.x version of Android had focused on smartphones and an "Android@Home" initiative targeting home automation products.
Tech media pundits—who were familiar with how Microsoft had taken over the market for PCs by leveraging foreign hardware manufacturers and using its Windows patents and other IP to erect and protect its "evil" monopoly that thwarted competition via anticompetitive licensing contracts—declared virtually unanimously that Android would similarly dominate TV, mobile devices and perhaps even netbooks, which may or may not also run Chrome OS.
Apple's insolently daring to compete against "commodity hardware" vendors, they insisted, was foolish and would quickly come to an end as soon as the world's software developers began abandoning iOS to support Android, a step that was assumed to be right around the corner due to the Windows-like scale of hardware partners voicing support for Android.
This assumption persisted even though virtually all the smartphones that existed when the iPhone debuted were also capable of running commodity-empowering platforms, from Java Mobile to Flash Lite. And yet, due to its advanced superiority, iOS had already crushed the very same hardware makers and licensees of Java Mobile, Symbian, and Windows Mobile who were now lining up to make Android smartphones, including Samsung, Sony Ericsson, HTC and LG.
Google's glorious promise of a quasi-socialist surveillance utopia
The apparent magic bullet of Android was that because it was being offered for free, it could willfully infringe any and all existing intellectual property in the mobile industry. Google had liberally infringed upon patented user interface and operating system inventions by Apple and Microsoft, and had lifted the very foundations of Android from Sun's Java Mobile.
None of this was necessary to deliver a competing phone platform, and Google was certainly capitalized to license any technology it needed. It simply decided that it could make even more money by cheating the same patent system that had protected its own inventions and delivered virtually all of its wealth.
Pundits assumed Android would rapidly take over because Google was providing access to other people's OS work at no apparent cost, while injecting ads into the platform as a way to make money off the practice. This was the same business model Google had used to take over the web's advertising, to monetize video content in YouTube and to place ads next to other's peoples content in Google Books and Google News.
Just as Microsoft had set up a monopoly platform that effectively charged a Windows Tax on every PC sold, Google was broadly expected to establish itself a quasi-government, global authority that would allow it to tax nearly every bit of content on the Internet and nearly every unit of hardware manufactured with advertisements that would enrich Google.
The only cost to end users would be that there would no longer be any meritocracy of competition in OS platforms, and there would be constant surveillance monitoring all their behaviors in order to deliver ads that Google could charge its advertisers the greatest possible fees to deliver.
Rather than being exposed to various competitive options from companies like Apple, Android buyers could live under a collective umbrella where Samsung, Sony Ericsson, HTC, LG and others all offered nearly identical devices priced identically to Apple's products, but connected to the same hive-mind vending Google ads that benefitted the same "Do No Evil" advertising middleman.
What could possibly go wrong?
Google's platforms collapse: 2010-2014
Google TV immediately imploded at launch, nearly devastating the initiative's hardware partners Logitech and Sony. Honeycomb tablets over the next several months similarly flopped right out of the gate, leaving Motorola and Samsung as beleaguered in the tablet business as they'd been before Google entered it.
By early 2011, Verizon had given up on its plan to compete with AT&T and iPhone via Android because Android was failing to attract valuable subscribers. Verizon launched a CDMA version of iPhone 4 and immediately began selling more iPhones than all of its Android smartphones.
In 2010, Apple began launching a series of lawsuits targeting patent infringement by Android licensees, eventually including HTC, Motorola and Samsung. Microsoft also began suing Android licensees for patent infringement, and Oracle launched its own lawsuit over Android's unlicensed appropriation of code from Java Mobile.
Apple's lawsuits sought to prevent Android licensees from copying patented, differentiating features of the iPhone; those lawsuits have drawn attention to the copying, and pushed various licensees to change their products to avoid further legal action, including HTC, Motorola and Samsung.
Microsoft's lawsuits sought licensing royalties from hardware vendors who had shifted from Windows Mobile to Android, cutting it out of the mobile loop just as it had originally intended to do to Google on the PC desktop; they have had the effect of increasing the cost of developing Android phones.
Oracle's lawsuit seeks to stop Google from using Java Mobile without licensing it, and without remaining compatible with its specification; while the case was delayed for years, it has now reopened the question of whether Google can continue to distribute Android as a platform without a license from Oracle.
With Android facing patent infringement lawsuits from multiple parties, Google first attempted to acquire patent portfolios of its own to reciprocate legal action. That included the $12.5 billion acquisition of Motorola Mobility in 2011, which also promised to reinvigorate Google's plans for dominating phone, tablet, TV set tops and other devices sales.
Instead, Google only lost billions of dollars over the following two years as it scrambled to dump Motorola's various existing businesses and rebuild a new product portfolio. Google is now seeking to sell Motorola to Lenovo, a divestiture that may incur scrutiny by U.S. regulators concerned about the rampant spying and intellectual property theft common to China.
At the same time, Apple's success with iOS as a mobile platform for native apps has had a tremendous impact on the web. New services are targeting users with apps rather than the web-based platforms Google has long dominated, and mobile audiences are using apps rather than starting their searches in the browser via Google.
Mobile cross platform development via HTML5 webs apps has been recognized to be far inferior to native app development even by highly capitalized companies with a cross-platform strategy, prominently including Facebook.
Google just announced results for the March quarter that outlined that the profitability of its core ad business is collapsing, with 26 percent more clicks resulting in 9 percent less revenue.
There has also been little mainstream interest in Google's Chrome OS platform. Five years after launching it, Google can only claim that a few of its Android licensees are even shipping Chrome OS netbooks, but none of those, nor even Google's own high end Chromebook Pixel, have ever achieved significant sales volumes.
Google postponed its expected Android 5.0 release last fall to instead deliver a tepid enhancement named Android 4.4 KitKat, aimed directly at being better able to support older, lower end devices than previous new versions of Android. However, Google isn't even supporting KitKat on its own Galaxy Nexus "pure Android" phone from 2011, released alongside iPhone 4S.
The failure of Android to do virtually any of the things it once claimed it would do (render smartphones "open," or "out-innovate" Apple via a global cooperative effort among former Windows Mobile and Symbian licensees, or deliver superior security through the sheer quantity of "eyes" among open source volunteers, or birth novel product categories that disrupt the status quo as iPad did) is almost as shocking as the widespread denialism surrounding it.
The media's incessant propaganda continues to insist that Android's composite unit shipments of primarily low end, profitless devices are somehow more impressive and important than building a real, sustainable business capable of actually delivering a safe, secure, likable and functional mobile platform with rapidly advancing sophistication integrated with disrupting new hardware products.
The absolute inability of Android's enthusiasts to recognize Apple as anything other than a evil amalgamation of fallacious badness has few parallels outside of North Korea's official stance on the United States. The difference is that Android users have the facts in front of them. They're not really operating within a insane fiction erected by a censoring dictatorship. They are voluntarily choosing to live inside an iron curtain of hypocrisy and doublespeak, and suffering for it with shoddy technology experience. How ruthlessly absurd!
Google's failure to innovate and compete parallels Microsoft
Even more ironic than the belief that Symbian/Java Mobile/Windows Mobile licenses would suddenly become competitive once outfitted with the "free" Android OS is the head-scratcher faith that Android could lock down the world in a monoculture just like Windows, given the recent history of Microsoft's own crumbling PC monopoly.
The actions Apple took to win back the lion's share of PC industry profits from Microsoft (and this most certainly happened, despite all the attempts by Microsoft's pet research firms to deny this reality with a snow job of market share "shipment" voodoo data) were not based upon some outrageous abuse of questionable patents.
Apple has won away the most valuable segments of PC market share by developing lust-worthy MacBook Airs and luxurious, highly differentiated MacBook Pros, earning an increasing share of PC units and revenue. This has occured despite a concerted effort by Intel and Microsoft to foster Ultrabooks, touch screen notebooks, netbooks, 2in1s and other hybrid devices over the last decade.
In smartphones, Apple similarly continues to increase its share of the most lucrative segments of the industry, despite the nearly singular industry focus on Android. Everyone else in the smartphone industry is losing money apart from Samsung, and that company continues to earn half as much as Apple despite shipping out twice as many phones.
In tablets, Apple has now entered its fourth year of increasing the relevance and value of its iOS platform. Tablets outside of the iPad are essentially sold as personal Smart TVs, with limited capabilities to do anything outside of watching videos and running basic smartphone-style applets.
In education, government and corporate enterprise markets, where custom native app development is far more important than among handheld TV-watching consumers, Apple has tremendous market share now approaching or exceeding 90 percent. An even greater 93 percent of corporate app development is now focused on Apple's iOS, a metric that is simply astonishing given the wide proliferation of extremely low cost devices running Android.
Those often much cheaper Android devices are being consciously avoided by enterprise users. Apple is not exerting monopoly control over the enterprise via anticompetitive contracts like Microsoft and Google have used, and Apple's patent litigation is also doing nothing to prevent any segment of customers from being free to pick alternatives available in the crowded market for tablets.
Apple is winning in a competitive market because its products are vastly superior. But you wouldn't know that from reading CNET reviews extolling meaningless specifications of third rate products like HP's new 7 Plus, an Android mini-tablet device powered by an extremely low end, Chinese made ARM Cortex-A7 chip that is slower than the A4 Apple used to power the original iPad back in 2010.
Never mind the shoddy performance, the third rate build quality or the irrelevance of the outdated build of Android it runs, because CNET wants you to only focus on the fact that the chip technically has "quad cores," even though its four cores work slower than a 2 core chip from four years ago.
If Apple were making such a piece of garbage, Greenpeace would be railing about ewaste. But HP lacks the market cache to attract fundraising opportunities, so firms like Greenpeace don't even mention the global issues of shipping vast quantities of such junk electronics that will commonly function for a few weeks as a business card, then a paper weight, then as landfill fodder.
Google's erection of a mass delusion of Android competence and even superiority is quite an exceptional feat, unmatched only by the wild hypocrisy of a company that owes its very existence and virtually all of its success to patents pivoting so dramatically to now take the position that patents are evil and that it should have an unfettered right to benefit from everyone else's inventions without any compensation.
It's almost as if a pair of Stanford college students who have lived the last 15 years coddled in a bubble of patent-protected profiteering off of spewing ads upon Internet users have lost all connection with reality, and see everything in the world as inherently belonging to them, from other company's intellectual property to the creative works of individuals.
Perhaps a reality-checking massive failure might wake them up, the same way it woke up Microsoft, Palm, BlackBerry and Nokia.
On Topic: patents
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