Google News buries news of Google's FTC investigation under Daniel Lyons fluff [updated with response]

Update: Following the publication of this editorial, Lyons reached out to AppleInsider to categorically deny the allegations from this piece. Specifically, Lyons said that his article was written before the U.S. Federal Trade Commission findings were released. He also took extreme issue with the fact that the author did not reach out to him for comment before it was published.

The original editorial remains published below, and Lyons's full rebuttal, sent via email Monday morning, is also published in its entirety.

The exposé of Google's "strategy of demoting or refusing to display, links to certain vertical websites in highly commercial categories," as described in the FTC's 2012 investigation, which concluded that "Google's conduct has resulted - and will result - in real harm to consumers and to innovation," was essentially erased from existence in 2013 when Google agreed to make a few minor changes to avoid a federal antitrust lawsuit.

The Wall Street Journal noted that the FTC Commission watered down its public conclusions issued about Google before letting the company off the hook, leaving the findings of the staff investigation secret for two years.

However, after the FTC accidentally leaked the never-released details of its staff investigation to journalists as part of an unrelated freedom of information request, it has erupted into an embarrassing spectacle for Google.

The investigation leak (for which the FTC apologized for inadvertently releasing, rather than hiding from the U.S. citizens who paid for it) had particularly bad timing given that the European Union is now taking up the issue of Google's abuse of its market power to harm competition.

The report contains copious evidence that Google ripped off content from its competitors (such as user reviews from Yelp and Trip Advisor), then threatened to use its monopoly position to erase them from relevance on the web if they didn't just allow it to happen.

Dan Lyons provides cover for Google after FTC investigation leak

Google News earlier promoted blogger Mark Gurman's "exposé" into how Apple supposedly tells the media what to write. However, its news editors have now turned to a conveniently timed whitewash constructed by Lyons to push down the relevance rankings of headlines examining Google's actual business practices (including real coverage written by the New Yorker and Washington Post).

Google News is— as this goes to press— hiding all legitimate news of Google behind Lyons' paper thin, propaganda fluff piece. Lyons, most famous for mocking Steve Jobs in an anonymously written "Fake SJ" caricature blog, has written enthusiastically about Google before, including his participation in the circle of Google Glass Explorers tasked with writing accolades about that failed product in the perpetual "beta" it struggled through before being canceled.

"I'm an Android fan, and have used only Android phones for the past few years," Lyons writes in his personal blog. "I like Android. I prefer it."

What does Lyons have to say about the FTC's damning, covered up investigation into Google's business practices? Not one word.

Instead, Lyons' "Five Myths about Google" takes on such "myths" as "Google is a search company," arguing that, in reality, Google is actually an artificial intelligence company with aspirations in self driving cars and robotics, all percolating within the Google X think tank. You know, fun stuff everyone likes.

The reality is that Google is not a search company. It's an advertising company. Nobody pays for Google Search, not even advertisers. They only pay for Paid Search Placement, a patent-protected idea that has formed the foundation of the company's entire business plan from its founding.

Google itself reports that 89 percent of its revenues come from advertising, a much greater percentage that Apple's often recited "excessive reliance" upon iPhone sales (which have contributed closer to 60 percent of Apple's revenues).

Google's 10K also warns investors that its other businesses (like Google Play content sales) and its future plans (projects like robots and self driving cars) will not drive the same 60-70 percent gross margins that Internet advertising has.

Lyons doesn't concern his readers with any of those facts, delivering only a smokescreen that portrays the company as a cutting edge research group with big ideas. The problem is, Google hasn't been able to turn any of its big new ideas into products that can sustain themselves and compete in the market.

Google's copies of Twitter (Buzz), Facebook (G+), iOS (Android), Windows (Chrome OS), App Store (Google Play) and so on either failed miserably or are barely breaking even. Even innovative products like Google Maps and YouTube don't turn any significant profit, and there's no basis for thinking that they will in the future.

Google's ad click growth is slowing, and the price per click it can ask from advertisers is consistently shrinking, whether or not anyone reports it. If there's some great myth about the nature of Google's search business, Lyons doesn't dispel it— he entrenches it. Which seems to be the point of the entire article.

He keeps Lyons: Google Glass was a success!

In one of the most bizarre refutations of reality ever, Lyons next takes on "Google Glass was a failure," calling it, too, a myth.

Why Lyons is even mentioning Glass is odd (it's not even available anymore), but that's explained (along with the raison d'être for the rest of the article) in his own words: "In the summer of 2013, I was among a group of 'influencers' invited to the Google campus to see some future products."

Lyons, as a Google Influencer, was tasked with promoting Glass to his audience of readers. That shill campaign was not successful at all, in large part because Google Glass itself was a terrible product concept with sloppy implementation and no clear purpose other than to make its wearer look ridiculous.

That's not what Lyons wrote about Glass while he was bragging it up as offering "a glimpse into the future" to his readers in July 2013.

"Glass could radically change all kinds of transactions," he wrote, "and could also have a profound effect on the world of marketing. Instead of having to figure out how to rank high in search results, marketers might need to game Glass and become the coffee shop or sushi place that Google sends people to. Instead of SEO, maybe we'll talk about GEO - 'Glass Engine Optimization.'"

He mused, "For Google, the device could open up a huge new business where instead of selling ads, Google could facilitate transactions and take a slice of each one. [...] Those goofy glasses could be a pretty big deal."

Once it became obvious that Glass was a dead-end failure with zero prospects, Lyons changed his tune to the more familiar mocking. His "Google myth" fluff piece now says Glass "influencers" who wore the device ended up "looking like idiots," and claims, "not one of the Google executives wore Glass."

What a bizarre thing to write, given that at ReadWrite, Lyons wrote about Google's cofounder Sergey Brin (who currently heads the Google X group Lyons was just crowing about) wearing Google Glass in 2013 like "some kind of Tony Stark superhero."

Lyons now claims Glass was nothing more than a pioneering "experiment, a way to explore wearable computing and learn lessons it can apply to other, presumably less-hideous-looking products." What?

That doesn't make any sense given that Google Ventures; Andreessen Horowitz; and Kleiner Perkins Caufield & Byers announced plans for a Glass Collective in 2013 to, as Lyons just wrote for ValleyWag in January, "invest in companies to develop apps for Google Glass." That announcement not only portrayed executives wearing Glass, but also portrayed Glass as a "potentially transformative technology," not "an experiment."

If Glass were a mere "experiment," why did Google humiliate fashion legend Diane von Furstenberg last summer with a commission to redesign them? Was it just being mean?

Why did the Google Glass team develop its "Titanium Collection" and why did it partner with Luxottica (maker of premium eyewear brands including Ray-Ban and Oakley) last year to leverage its retail and wholesale distribution channels for a product that was only an experiment?

Why did Google embark upon the illegal construction of massive barges it hoped to use as floating retail stores as "an important opportunity for the launching" of Google Glass if it were only an experiment, and not a real product with the capacity for success or failure?

In that same article, Lyons predicted that Apple Watch will "suck" and will be something only "bozos" would stand in line to buy.

"Tim Cook will claim it's a huge victory. Apple will constrain supply to make it look like there is huge demand and they're selling them as fast as they can make them and they're way ahead of plan. But this is not iPhone Redux. The watch is a limited thing, and won't move the needle," he wrote.

Just a couple months later, Lyons is now saying that "wearable devices, all the rage at this year's South by Southwest tech conference, will eventually be a huge market, encompassing products from virtual-reality goggles to fitness bands to smartwatches such as the new Apple Watch," while crediting Google Glass for this success, in stating "though Glass didn't catch on, it created tremendous buzz and established Google as a pioneer in the market." What?

In other words, Apple Watch will either be a fake success deviously orchestrated by Apple— and owes any of its actual success to Google, the wearables market pioneer— or it will will suck and only bozos will buy it, and it will not have any of the "great potential" Glass did, which was definitely not a failure, did not suck and bozos did not wear it, particularly not any Google executives.

What a breathtaking series of contradictions and downright lies.

If Google's massive, global efforts to develop, propagate, design, show, sell and shill Google Glass did not end up in failure because Google successfully 'started a productive conversation about wearables,' then no product can ever possibly fail.

The Apple III, Lisa Computer and Newton Message Pad (below)— some of Apple's most famous "failures"— were all products that actually made it to market and sold, and greatly influenced the products that followed them. Glass was bigger failure than all of them put together.

Never mind the FTC: Google is not "a leading force for diversity in Silicon Valley"

After claiming that Google is actually a conceptual-tinkering company, and that its last major conceptual-tinker release was not actually a failure, Lyons pitches a softball dig at the company for not promoting women and minorities. It's a "myth" that Google is a leading force for diversity he states.

Google reported last year that 60 percent of its workforce (83 percent of its tech workers) were male, and that 60 percent where white, 30 percent Asian, and less than 5 percent were Hispanic or black. "Google statistics show Silicon Valley has a diversity problem," was the Washington Post headline last year.

Google is now making commendable efforts to address that, but it is not "leading" Silicon Valley by any metric. Apple already employs more women within its tech (20 percent versus Google's 17) and in leadership positions (28 percent versus Google's 21), and Apple reported more than 13 percent of its tech workers were Hispanic or black, more than twice the proportion of Google.

Apple doesn't brag that its numbers are higher than Google, despite its headquarters being largely based in the predominately white and Asian city of Cupertino (Google has 19 major offices around the U.S., in racially diverse cities including Atlanta, Detroit, New York, Washington, D.C.). Both companies are working to improve their workplace diversity.

There is no myth that Google is "leading diversity in Silicon Valley," and the issue is not new; the only possible reason to bring it up is to distract from the FTC's investigation into Google's overtly illegal behavior that harmed businesses and individuals in America equally, regardless of their gender or race.

Google doesn't even have a monopoly (well at least not an unassailable one)

The issue of Google using its market power to crush any potential for competition, as documented in secret by the FTC, is not even something to worry about, Lyons suggests, because Google faces potentially competitive threats from companies like Amazon and Facebook.

Lyons keeps talking about "search" too, as if Google sells search. "But the real threat to Google's search business doesn't come from Microsoft or Yahoo. It comes from Amazon and Facebook, and from the changing habits of online shoppers," he wrote.Google News is doing to journalism what Google is doing to everything else on the web: burying it under the content Google wants people to see.

Again, Google's real business is not "search" but rather advertising. Facebook leads its competitors in encroaching upon Google's ad business, and plenty of others, including Amazon, are trying. But Google still has unrivaled market power to erase any and all competitors from the web's search results (if not from the iOS App Store, which is supporting most of the open competition among emerging Internet properties, shielded from Google's interference).

That makes Google's anticompetitive behavior in stomping on— and stealing content from— smaller competitors including Yelp and TripAdvisor a bizarre thing to leave out of a long article examining "myths of Google." The only reason for writing tons of irrelevant fluff about Google would be to offer the ad giant a smoke screen to promote above the relevant, timely and important news that's currently being reported about Google by actual journalists.

By promoting this pointless, outdated (Glass?), contradictory fluff to the top of its technology news search results and subordinating all the real headlines about the FTC investigation of Google below it— in a way that users have to dig to find— Google News is doing to journalism what Google is doing to everything else on the web: burying it under the content Google wants people to see.

This is all about Apple, folks

But no propaganda from Lyons would be complete without lying about Apple. In his next section, where he says that "Google is Big Brother" is myth number 5, Lyons says "There is a Big Brother online, but it's not Google: It's the NSA."

As Google's chief executive Eric Schmidt told NBC, the company does retain information "for some time," and under the U.S. Patriot Act, "it is possible that that information could be made available to the authorities."

He advised, "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."

Lyons wrote, "Google does gather data about people who use its services, much like other online companies," and then highlights that Apple "has as many as 800 million credit card numbers on file." He then ads that Apple also has "perhaps billions of personal photos gathered from iPhones on its iCloud service, including numerous nude celebrity photos leaked by hackers." What?

There's a difference between people choosing to shop with iTunes (which has never released users credit card numbers in a security breech like Target and other retailers have) and Google surreptitiously tracking users across websites in ways that the typical web browser does not realize are being tied together for behavior surveillance purposes, and potentially reported to "the authorities."

In 2012, Google was forced to pay out the largest fine in FTC history for bypassing Safari privacy settings and then lying to users about it; telling them there was no need to opt out because they weren't being tracked, when Google was purposely subverting Apple's web browser to override its default blocking of user tracking by ad networks. That's a little more "NSA" than Apple having your credit card on file to buy apps.

Also, Apple doesn't have access to users' encrypted iCloud data and there's no commercial reason for why the company would "gather" users personal photos as Lyons falsely alleges. This is one of the most outrageous false accusations Lyons has made about Apple, and that's really saying something.

In 2010, Lyons claimed on CNN (ironically on a show named "Reliable Sources") that an Apple PR executive had leaned on writer Steven Levy to thwart his hiring at Newsweek.

"Their head of PR told my predecessor, Steven Levy, to pass word to the powers that be at 'Newsweek' that Apple wasn't happy with the idea that they were going to hire me. Yes, that happened. And Apple plays this game. I mean, notice who got iPads and who didn't get iPads. Notice who got access and who didn't," Lyons told CNN.

Apple didn't issue any official comment about the claim, but Levy himself noted that Lyons allegations were "just totally wrong," stating, "I didn't pass anything on in terms of a message from Apple. It just simply did not happen."

Lyons later apologized for describing a passionate "Mike Daisey" series of events that didn't actually happen, but has since continued writing false claims about Apple, which he even managed to weave into today's fluff piece of the "misunderstood" Google.

While claiming that Apple manipulates the media, Lyons actually provides a detailed case study in how he does, for Google.

Response from Dan Lyons:

1. It's inaccurate to call my article "a puff piece glorifying Google." The article contains, for example, a sharp critique of Google's lack of diversity among its management team and board of directors.

2. It is inaccurate to call my piece a "conveniently timed whitewash constructed by Lyons to push down the relevance rankings of headlines examining Google's actual business practices." As I explained in my original email to you, I wrote the article BEFORE the FTC information was released. My piece was written for the weekend opinion section (called Outlook). It was an assignment from the Post. I didn't come up with the idea. An editor at the Post emailed me and asked me to write something. The weekend print edition needs to close early, so I delivered that story last Wednesday. My article was not conceived or written as a whitewash to cover up anything. In fact, when the FTC information leaked, I contacted the editor at the Post and told her about it, so we could at least add a reference to it in my piece. They had to go back in and add that sentence to the article. It's really unfair to say that I was writing this article as some kind of favor to Google.

If Daniel had simply contacted me before writing his piece, as is standard operating practice for journalists, I could have explained this to him then and spared him the trouble of concocting this elaborate conspiracy theory.

To accept his "whitewash" theory you have to believe that I saw the FTC news, and then rushed out to write a "Five Myths" piece, then called the Washington Post and got them to publish it in their print edition on Sunday — as if I could actually do that.

You also have to believe that I did this all so that maybe, just maybe, it would distract people from the damning FTC news.

And that maybe Google had a hand in this too, and encouraged me to write an article, so that they could place my story at the top of their Google News rankings after it was published.

I'm sorry but this theory is beyond crazy. The idea that you guys would even publish something so far-fetched is amazing to me.

3. It is inaccurate to say that I raised the issue of Google's lack of diversity for the reason DED states: "the only possible reason to bring it up is to distract from the FTC's investigation into Google's overtly illegal behavior that harmed businesses and individuals in America equally, regardless of their gender or race." That is not the only possible reason to raise the diversity issue, and it is not the reason I included that information in my article. I made that point because Google has tried to create a myth about itself as being a leader on issues of diversity. They were first to publish their diversity numbers and have made a big point about how much money they're investing in diversity issues. I wanted to hold their feet to the fire on their lack of diversity at the top ranks, and suggested that change should start at the top!

4. It's inaccurate to say that my myth about Google being Big Brother was really about Apple. My point was simply that the real Big Brother is the NSA, not Google or Facebook or any other tech company that gathers user data. I mentioned that Apple and Microsoft have tried to portray Google as "Big Brother" and said their claims are not true. Daniel seems to think the whole point of this part of my article was to criticize Apple. It wasn't. My point was that Google in fact has tried to thwart the NSA by employing stronger encryption.

5. The description of what happened with Steven Levy and CNN's show "Reliable Sources" is inaccurate. Levy did indeed pass word to the business editor of Newsweek that Katie Cotton, Apple's PR chief, was upset that Newsweek had hired me and wanted Newsweek to know that Apple would not talk to Newsweek if I was working there. I said this on air with Howard Kurtz on his show, "Reliable Sources." Soon after, Levy made a stink and claimed I was lying. I produced the email that Levy had sent to the business editor of Newsweek and gave it to Howard Kurtz at CNN.

6. Daniel's description of my Mike Daisey coverage is inaccurate. You may recall that Daisey did a one-man show in NY and claimed that Apple was exploiting workers in China. He claimed to have gone to China and seen these abuses. I interviewed Daisy when he was in NY and asked him directly if he had really seen everything he talked about in his one-man shows. I said that his stories seemed too convenient, too perfect. He insisted everything in his show was real, that it was pure journalism, he had actually done all that reporting. Later when Daisey was exposed as a fraud I wrote a scathing critique of him and called him out for lying to his audiences and also to me, directly, in an on-the-record interview. Daniel says I "apologized" for my fawning coverage of Mike Daisey. Not so. I wrote an angry piece about getting hoodwinked by a liar.

These last 2 are years old and ridiculous for Daniel to even bring up. I think he is just grabbing at parts of old stories, using them inaccurately in order to smear me as some kind of Apple hater, basically trying to just throw everything he can find at me.

I really think he believes that I am motivated in everything I do by some huge animus toward Apple. Nothing could be further from the truth.

I believe his story should be corrected or retracted. His claims about my motivation in writing the piece for the Post are totally false, and have led people to start smearing me on Twitter and via email.

I've shown you some of the ugly stuff that has come my way thanks to Dilger's inaccurate article. Homophobic, anti-Semitic stuff. Just awful.

If you want to print this email, feel free.

Dan Lyons