Episode 9: Don Marti on the politics of browsers

Summary

Episode 9: Don Marty on the Politics of Browsers Release Date: December 4, 2024

Podcast Information:

• Title: The Monopoly Report
• Host/Author: Ari Paparo
• Description: In-depth coverage of big tech's antitrust woes from Marketecture.tv.
• Focus of Episode: Discussions surrounding the Google search and ad tech trials, with a special focus on browser politics featuring guest Don Marty.

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1. Introduction and Guest Background

Alan Chappelle opens the episode by introducing Don Marty, the Vice President of Ecosystem Innovation at Raptive. Alan highlights Don's diverse background, including his tenure as Editor-in-Chief of a tech publication, his consultancy role with Consumer Reports, and his significant contributions at Mozilla.

Key Quote:

"[Don Marty] brings the publisher perspective and a strong technology background, making him a valuable voice in our discussion about browsers and their evolving roles." — Alan Chappelle [01:36]

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2. The Changing Landscape of Browser Revenue

Alan presents his premise: the ongoing Google antitrust cases are poised to diminish Google's search and ad revenues, compelling browsers to seek alternative advertising revenues. This shift, he posits, might create tensions as browsers traditionally prioritize user protection over aggressive monetization.

Key Quote:

"I think that some of the search and other payments coming from Google are going away. And as a result, browsers are going to have to increasingly chase advertising dollars." — Alan Chappelle [02:10]

Don Marty counters this by emphasizing the complexity of browsers as open-source software integral to the industry. He argues that the browser ecosystem is more resilient and adaptable than Alan suggests, drawing parallels with the Linux community's collaborative model.

Key Quote:

"When you look at browsers, you see a big complicated piece of open source software that an entire industry depends on." — Don Marty [02:46]

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3. Funding Open Source Browsers Without Traditional Ad Revenue

Alan probes into how browsers might adapt if Google's ad revenue diminishes. Don Marty compares browsers to open-source projects like LibreOffice, which thrive without massive advertising deals, suggesting that browsers could similarly diversify their funding sources.

Key Quote:

"If we see the one big search deal as browser revenue go away, then the browser open source model might be forced to grow up and get more contributions from more places." — Don Marty [04:40]

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4. Monetization Strategies: Privacy vs. Advertising

Ari Paparo introduces the idea of different monetization paths for browsers: prioritizing privacy possibly at a cost to consumers, or maximizing advertising revenues by catering to advertisers. Don Marty references Brave, a Chromium-based browser that integrates cryptocurrency features, as an example of a browser navigating these monetization choices.

Key Quote:

"That's sort of describing Brave because if you're really into cryptocurrency, then you can run Brave and turn all the cryptocurrency features on." — Don Marty [08:17]

Ari expands on this by suggesting alternative revenue models, such as browsers that offer discounts or enhanced shopping experiences, akin to the Honey plugin acquired by PayPal.

Key Quote:

"You could build a browser that's really good at getting you discounts when you shop. You can imagine Amazon offering a browser." — Ari Paparo [09:29]

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5. Privacy Competition Among Browsers

Alan raises the topic of whether browsers are genuinely competing on privacy or merely engaging in "privacy-adjacent" practices. Don Marty clarifies that while browsers like Safari promote privacy, their implementations often fall short of true user privacy norms, citing issues like IP address leaks and suboptimal ad attribution practices.

Key Quote:

"They're selling privacy, but they're not necessarily implementing privacy in terms of real user privacy norms because they leak IP." — Don Marty [11:15]

Ari references studies and real-world implications, questioning the effectiveness of current privacy measures and suggesting a disconnect between browser policies and actual user comfort.

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6. Global Privacy Control (GPC) and Data Sales

The conversation delves into the Global Privacy Control (GPC) initiative, a standardized method for users to signal their privacy preferences across websites. Alan elaborates on the legal implications of data transfers, suggesting that any such transfer might constitute a data sale under laws like the California Consumer Privacy Act (CCPA).

Key Quote:

"Anytime you transfer personal information outside of the business that is collected, it accounts as a sale." — Alan Chappelle [15:05]

Don Marty explains the technical aspects of GPC, comparing it to the earlier "Do Not Track" efforts but highlighting its legal grounding and standardized implementation.

Key Quote:

"Global Privacy Control was written into CCPA and became already legally a thing in 2020 and then was implemented technically." — Don Marty [17:07]

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7. Regulatory Challenges and the CMA's Role

The discussion shifts to the Competition and Markets Authority (CMA) in the UK and its potential influence on Google's browser practices. Don Marty expresses skepticism about the CMA's ability to enforce meaningful changes, particularly concerning Google's internal tracking mechanisms like "Biscotti," which may allow Google to bypass traditional third-party cookie restrictions.

Key Quote:

"If they implement that plan in an extremely literalist nerd kind of way, then they're going to say here's a control that turns off everybody else's cross context tracking, but it leaves Google's cross context tracking turned on." — Don Marty [21:36]

Alan underscores the limitations of current regulatory frameworks, noting that even with GPC, major tech companies might still maintain extensive tracking capabilities.

Key Quote:

"Most of the large tech giants will effectively be able to track in cross context even when third party cookies are turned off." — Alan Chappelle [22:32]

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8. The Potential Spinoff of Chrome and Its Implications

Alan introduces a speculative scenario where antitrust actions might force Google to spin off its Chrome browser. He seeks Don Marty's insights on how this could affect the browser landscape and broader web innovation.

Don Marty envisions a highly optimistic outcome, where an independent Chrome would ignite a surge of innovation, much like the early days of Netscape spurred new web functionalities. He believes that freeing Chrome from Google's overarching business interests would unleash its creative potential, benefiting the entire web ecosystem.

Key Quote:

"Spinning off Chrome would set off another wave of innovation and productivity like that. There's so many cool projects that are available to be done within the browser that would extend the capabilities of the web for users." — Don Marty [26:26]

Ari Paparo offers a counterpoint, questioning the economic viability of such a spinoff given Chrome's substantial maintenance costs and the potential disappearance of initiatives like the Privacy Sandbox.

Key Quote:

"I don't think Chrome is economically viable as a spin out because it has a large number of super expensive staff." — Ari Paparo [29:17]

Don Marty responds by emphasizing the need for a robust business model and sufficient financial backing to ensure a successful transition, drawing parallels with how various Linux distributions sustain themselves.

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9. Final Thoughts and Future Outlook

As the episode concludes, Alan and Ari reflect on the complexities of regulating browsers and the delicate balance between user privacy and monetization. They express concerns about the current trajectories of major browsers and the potential for regulatory bodies to either effectively curtail or inadvertently empower dominant players like Google.

Key Quote:

"There's a recognition that the signal cannot be used, or at least should not be used to preference one ad product over another." — Don Marty [20:17]

Alan remains cautiously optimistic, hoping for regulatory outcomes that genuinely protect user interests without enabling loopholes for entrenched tech giants.

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Conclusion

In this episode of The Monopoly Report, host Ari Paparo, Alan Chappelle, and guest Don Marty engage in a nuanced discussion about the future of browsers in the wake of antitrust pressures on Google. They explore the potential shifts in browser revenue models, the genuine versus perceived commitments to user privacy, and the broader implications of regulatory actions on web innovation and competition.

For those intrigued by the intersection of antitrust law, browser technology, and the advertising ecosystem, this episode offers a deep dive into the challenges and opportunities shaping the digital landscape.

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Subscribe to The Monopoly Report: Stay informed with weekly insights on big tech's antitrust challenges by subscribing to our newsletter at monopoly.marketecture.tv.

Transcript

[Ari Paparo]

This podcast is brought to you by Luma Partners. A couple months ago, Luma used AI to create a fake ad with my voice in it. So we're going to play that ad now to save a couple of bucks. Here we go.

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[Ari Paparo]

I'm the real Ari Paparo, and I approve that copy.

[Alan Chappelle]

Welcome to the Monopoly Report. The Monopoly Report is dedicated to chronicling and analyzing the impact of antitrust and other regulations on the global advertising economy. If you are new to the Monopoly Report, you can subscribe to our weekly newsletter. At Monopoly Market tv, I'm Alan Chappelle and I'm joined by ad tech influencer Eric Paparo, who is of course our esteemed leader here at Architecture. Hey, Eric, how are you doing?

[Ari Paparo]

I'm doing great. Thanks for taking the ship here. I'm having a little bit of a cold, so I don't want to talk too much. I'll just chime in where I have to today.

[Alan Chappelle]

Well, I'll try not to get your germs through the screen, but glad to have you here. And we are joined by Don Marty, who is VP of Ecosystem Innovation at Raptive. Hey, Don, how you doing?

[Don Marty]

Hey, Alan.

[Alan Chappelle]

Hey, thanks for being on. I want to give a little bit on your background because I think it's really unique. I mean, you know, you were editor in chief of a tech pub, you worked as a consultant for Consumer Reports, working on some of their authorized agent businesses. And of course, you did work for a number of years, I think, with Mozilla. Do I have that correct?

[Don Marty]

That's right.

[Alan Chappelle]

And now you're with with Raptive. So I think you bring the publisher perspective. Certainly, as you've got a technology background, of course, maybe you can speak a little bit from the perspective of the browsers. Maybe you're not speaking for them, but at least you know enough to be dangerous. So thank you so much for being on.

[Don Marty]

Well, thanks for having me.

[Alan Chappelle]

So, in our weekly Monopoly Report newsletters, I've taken the position that the browser market is changing in part as a result of the Google antitrust cases. So my premise is that some of the search and other payments coming from Google are going away. And as a result, browsers are going to have to increasingly chase advertising dollars. In doing so, they're going to create some tension for the browsers who've historically at least been focused more on protecting their users. So first I'd like you to react to that premise, if you wouldn't mind. Does that make sense? Do you agree, disagree, anything to add?

[Don Marty]

Well, I don't buy that premise a hundred percent. When I look at browsers, I see a big complicated piece of open source software that an entire industry depends on. And in the case of browsers, for historical reasons, browsers have been maintained by one big company, possibly with extra forks, people building their own version of an open source browser to reflect their own opinions. But in general the browser's been built internal to one company or one organization. And as far as open source goes, that's pretty unusual. If you compare for example to Linux. Well, most of Linux is not written in house at the Linux foundation. Most of Linux is written by hardware vendors who want the kernel to support their hardware, or it's written by software vendors who want the kernel to support their workload. It's more of a coordinated but multi organization effort. And so yes, historically there have been these big browser search deals that drive a single large organization to run the browser internally. But really there's a lot of ways for successful open source that everybody depends on to work. And if we see the one big search deal as browser revenue go away, then the browser open source model might be forced to grow up and get more contributions from more places.

[Alan Chappelle]

Well, to me that sounds like a positive. No, I mean, well, let's bring that back to the ads business. I mean, how does that, how does that change the advertising business in terms of how these browsers are going to have to adapt?

[Don Marty]

Look at how Linux gets support for new hardware. Usually what happens is there's a kernel team at the hardware vendor who says our hardware designers built this new thing. It doesn't really work under any operating system right now. So we're going to write the open source code that is needed to make this new hardware product work on by now billions of Linux systems out there potentially. So from the browser side, if you're say a software as a service vendor, or a subscription based vendor, or anyone who's doing anything of value on the web, then it's in your interest to have the Browser support what you do and it would be really positive for the browser to work more like that and less like a single top down organization.

[Alan Chappelle]

Okay, that makes sense. I guess I was just more referring to Mark Sermon had a blog post where he sort of went through a lot of the hey, you know what, we're going to have a revenue shortfall. We think advertising is broken and we think that the only path to fixing it is a more privacy preserving type of approach. And so that's sort of what I was sort of drawing from. But you raised an interesting point that I mean isn't just about everything where a large swath of browsers are built on the Chromium engine at this point, Right?

[Don Marty]

That's right. The Chromium project has been very, very successful in making itself useful as a base for build your own browser.

[Alan Chappelle]

Does that. That doesn't really change the underlying thesis of there is going to be a revenue shortfall and that revenue shortfall needs to be made up somehow. And I'm just curious, what are your thoughts about how that gets made up from the browser community?

[Don Marty]

I think there are a lot of ways to fund open source software. So when people look at oh no, there's a browser revenue crisis, well, that crisis has been normality for other open source projects for 20, 30 years by now. So look at the Document foundation, that's a really interesting open source organization where if you can't open your old Microsoft Word document in Microsoft Word, there's actually an open source project, LibreOffice that maintains compatibility with all those documents out there and they do a remarkable job of maintaining a workable Office suite which is another huge multi platform end user facing open source project without some kind of big advertising deal or other massive monolithic revenue source.

[Ari Paparo]

So let me jump in here because if you put on your entrepreneurial hat and say how can I make money on a browser? Or how can I get loyalty from a browser? You could go in totally different directions. You could say I'm going to make the most privacy protecting browser ever and maybe even charge consumers for it. Or you could go the opposite direction and say I'm going to make the most monetizable browser ever and I'm going to charge the advertisers for it. Or maybe somewhere in between. Is that a reasonable way to think about this opportunity or problem?

[Don Marty]

That's sort of describing brave because if you're really into cryptocurrency, then you can run brave and turn all the cryptocurrency features on.

[Ari Paparo]

I was thinking about for Normal people.

[Don Marty]

Yeah, yeah, yeah, exactly. But Brave is basically a Google Chromium based browser and they've got a specific, very opinionated revenue model around cryptocurrency. And if you're into cryptocurrency, you can turn that on. If you're not into cryptocurrency, you can turn that off. I could see something similar for a browser built around personalized advertising, where you'd have some kind of an encrypted identifier built into the browser, where if you're the kind of person who wants personalized advertising, then you could turn on a feature that would send an encrypted identifier about yourself and say, personalize my ads. Do it, do it up. And then anybody who wanted to decrypt that identifier and put it into the bid stream could get an account with the browser vendor for, for an API in order to do that.

[Ari Paparo]

Yeah, I mean, that's one angle. There's a commerce angle. I mean, if you think about honey that got acquired by PayPal for some billions of dollars, it was just a browser plugin. You could build a browser that's really good at getting you discounts when you shop. You can imagine Amazon offering a browser. There's a lot of flavors of ways to make money on a browser since a browser is so important as the window to all the content in the world.

[Don Marty]

Yeah, and that kind of sounds like the Linux business. So some people are making money with a version of Linux that runs really well on phones like Android. Some people are making money with a version of Linux for supercomputers. And then there's all kinds of Internet connected devices and servers and data centers in between.

[Alan Chappelle]

So what's your take on the conceptually on browsers competing on privacy? So you hear a lot about that. And although you hear mostly, I think, from some of the larger companies who happen to own browsers, but you know, is there really competitive pressure for browsers to be competing on privacy, at least with consumers?

[Don Marty]

Yeah, but the browsers aren't really doing privacy now. They're doing math that is privacy adjacent, if you look at it right. But they're not really doing privacy privacy, actual privacy depends on looking at the hard stuff, like user research on how people are comfortable sharing information in a market. And that's a stage that we haven't really gotten to yet in either the ad business or the browser business, to be fair.

[Ari Paparo]

Wait, hold on, I need to unpack this. I'm not sure I understood this. So let's start with the first question, like, is the Safari browser not selling privacy?

[Don Marty]

Well, they're selling privacy, but they're not necessarily implementing privacy in terms of real user privacy norms because they leak IP.

[Ari Paparo]

Address and other fingerprinting signals. Or is there something else I'm missing?

[Don Marty]

Well, they've got ad attribution built into the browser. So there's a feature in there that when people find out about the browser based attribution tracking, then they're not necessarily comfortable with it. And the fact that a lot of people aren't comfortable with things that are being positioned as a privacy feature is kind of a red flag there.

[Ari Paparo]

Is there any evidence of that? I mean, have there been studies that people are not comfortable with, like the Apple level of privacy?

[Don Marty]

Yeah, there's a really interesting paper from FTC Privacy Con earlier this year and I don't have it in front of me, but I'll send you the link for the show notes.

[Ari Paparo]

Yeah, that'd be great.

[Alan Chappelle]

I mean, my view of Safari is it's almost less about privacy and it's more about setting up the features in such a way that fewer people, at least on iOS actually want to use Safari. And that funnels traffic and eyeballs to the place where Apple is in much better position to monetize. Of course, there's their app business.

[Don Marty]

I've got another link for the show notes which is about how that's kind of out of date. Now it's true that in the early days of iOS native apps, the browser was substantially lagging on functionality, so that people who were kind of on the fence between making a full featured website and a basic app were kind of. All right, fine, I'm going to do the app. But the Safari browser team since like late 2022, early 2023 has really been staffing up and implementing a lot of features in order to get back up to feature parity with the other browsers.

[Ari Paparo]

Well, famously Mark Zuckerberg said that building Facebook in the browser for mobile was the biggest mistake of his entire career. So do you think he would change his mind nowadays based on the advances you're talking about?

[Don Marty]

Well, Facebook is evil, so that's kind of not necessarily evil.

[Ari Paparo]

Evil and effective are two different axes. So whether it's good or not that they built a browser. But I'm saying, do you think his point was about functionality, speed, consumer engagement, stuff like that?

[Don Marty]

Yeah, yeah, definitely. Trying to do mobile web on early devices was really janky. So iPhone 4 generation mobile web was not as good of an experience as native and it was really Noticeable. A lot of the performance gap has closed to the point where an app like Facebook would not be noticeably janky on mobile web today. But at the time that was definitely a correct observation.

[Alan Chappelle]

That makes sense. So I want to jump in with, with a bit of a wonky legal question, but it kind of cuts at the monetization strategy question even on the E Comm side that Ari was pointing out. So if a browser sends search traffic or really anything to a third party search engine or to some other entity other than the browser, you know, does that count as a sale given that it's personal data? And I'm not asking for legal advice, but I'm just sort of want to, want to level set here. Is that a sale of data under the California privacy laws?

[Don Marty]

I don't know. I don't have the information or the context or the law license needed to answer that kind of a question.

[Alan Chappelle]

Okay, so the rule number one of being a lawyer and a deposition is never ask a question unless you know what the answer is. But I'm going to answer it, which is that anytime you transfer personal information outside of the business that is collected, it accounts as a sale. And one of the reasons I'm kind of doubling down on this particular point is that a lot of the browsers have embraced the global privacy control. Some are turning it on by default. And one of the roles of this global privacy control and area, this gets back to like the do not track discussion 10 years ago. One of the output comes of a global privacy control is when you turn it on, it's supposed to stop the sale. And one of the things that I'm trying to think through is how can one stop other third party tech from existing while continuing your existing business, which also meets the legal definition of sale. I don't know if you have a reaction to that. I'm not asking for your legal opinion, but you've been in the business world for long enough and this is the type of thing that's keeping me up at night.

[Don Marty]

Yeah, yeah. And I've actually been on the Global Privacy control team since 2020, before I even started at Raptive.

[Ari Paparo]

Can you guys let our audience know what the global Privacy control team is?

[Don Marty]

Sure. Global Privacy control is a universal opt out mechanism or opt out preference signal. And it's a very simple HTTP header or JavaScript property that just says GPC1 and that one bit of information is passed from the user to whatever sites they visit that happen to check it.

[Ari Paparo]

So do not track 2.0.

[Don Marty]

Basically, yes. Technically it's extremely similar to do not track. The only difference is that the development process went the other way around instead of the technical standard being written and then people trying to figure out what it means. Like for do not track. Global Privacy Control was written into CCPA and became already legally a thing in 2020 and then was implemented technically.

[Ari Paparo]

Yeah. So Alan made fun of me in the newsletter this week because he. Because I've suggested in the past that browsers should be regulated by the government. And I've talked to other people who believe that too, and Alan said that it would be convoluted and impossible. But I want to clarify. I'll give Alan a chance to rebut my rebuttal. But what I think is that there should be standards like Global Privacy Control and that there should be laws and enforcement that require any software that does certain things to adopt standards that are understood by the industry. That would include like my TV and my printer that is going off on the Internet. God knows what they're doing, and other things like that. So that's what I meant by government regulation. Alan, feel free to tell me I'm wrong.

[Alan Chappelle]

I don't know that you're wrong. I'm just going to say that for better or worse, there have been a whole bunch of features and functionality that have been subsidized indirectly by advertising dollars. And if you pull those subsidies away, you know, query. I think on the one hand you'd say, okay, well, there's less revenue. There's probably less overall innovation. On the positive side, though, is, I guess in theory, if you take away the. The large companies controlling the browser that you open up the possibility that they won't just do what these large companies want them to do.

[Ari Paparo]

I would pay $25 more for a printer that didn't spy on me. I want a brave printer. If the brave people are listening, it's time to create a printer that doesn't watch everything I print.

[Alan Chappelle]

Fair point. The challenge, I think, to your comment about, well, every browser should implement the global privacy control. I would agree with that. I would say that in my view, at least, it should be off by default, at least in most implementations. I think there's. I'm sure there's a browser out there that can make the case that they should be turning it on by default. However, there are implications to that. And one of the implications is that you can't then just jerry rig your own ad solution to say that somehow it's exempt from that rule. And in fact, I will point to Colorado and Connecticut who both have some broad anti preferencing rules around the implementation of the global privacy control. Maybe that's not enough. I mean really what you need is California to support that, but I don't see that as likely. But what you need is I think a recognition that the signal cannot be used, or at least should not be used to preference one ad product over another.

[Don Marty]

Yes, and that's one of the points that I think people have made in discussions with the competition and markets authority in the uk. And in that case, Google has stated that they're going to give users some kind of a preference to turn quote third party cookies on or off. And realistically Google itself does not need third party cookies for cross context web tracking. So if they implement that plan in an extremely literalist nerd kind of way, then they're going to say here's a control that turns off everybody else's cross context tracking, but it leaves Google's cross context tracking turned on. And in some of the courtroom documentation, some of the the documents that have come up on Pacer, there's been a mention of something called Biscotti, which from context it looks like it's like a third party cookie, but it's only Google to Google, so it's not going to count as a third party cookie.

[Ari Paparo]

Yeah, I think there also have been some non binding declarations by Google that they won't use the Google login for cross site targeting. That was part of the sandbox discussions. And of course there's this idea that there's some sort of super cookie at the Chrome level that there has been some evidence of in the past and it feels like none of that's really very binding. Like they could say, oh, we're going to be the good guys, we're not going to use all that stuff, we'll get rid of the cookies and then we'll find out five years later that there's this one team at Google who uses the data in some way that's hard to explain and blah blah, blah, blah. Right. Feels very loose.

[Alan Chappelle]

Yeah. Just to add one more piece of research for the show, notes, there was a study that was done maybe a year ago that actually concluded what Don was saying. It was some ridiculous number, like 98% of the footprint will remain once third party cookies are turned off. And by the way, that isn't unique to Google. I mean it's Meta and Amazon and most of the large tech giants will effectively be able to track in cross context even when third party cookies are turned off.

[Don Marty]

And so realistically What I'm hoping CMA is willing to do here is make that cookie preference in Google Chrome that they're, they've already said that they're going to do make that cookie preference a generic cross context tracking preference that if you click it it turns off third party cookies, turns on global privacy control and then Google could be party to a set of commitments where it says they'll treat global privacy control as an opt out of cross context tracking on.

[Alan Chappelle]

Their own properties, but they're going to do that pursuant to just a general agreement which I think to Aries point.

[Don Marty]

Right.

[Alan Chappelle]

I think probably has some expiration date.

[Don Marty]

Yeah. And there's, there's kind of a pessimistic expectation that the CMA is going to let Google get away with a preference that just Sundays turn off third party cookies. And that preference isn't going to have any impact on Google's own cross context tracking. So it turns into a massive loss for the CMA and for users and for anyone who has a site that's not, that's not Google.

[Ari Paparo]

What's the timing? When were you expecting to hear from the CMA?

[Don Marty]

I have no idea. I don't know what CMA's calendar is on. Getting started with the reports again, I.

[Alan Chappelle]

Thought they were thinking Q4, which I guess isn't super helpful given that we're, we're already a third of the way through Q4. But don we, we had provided pretty similar feedback around just the, the whole choice screen thing is, is really, really complicated and problematic for one thing, probably doesn't satisfy EU data protection law. And so it's not going to be the only choice that consumers are asked to make with respect to third party cookies. And so it, it's going to, it's rife with a whole bunch of problems. The challenge here is that I am fairly convinced that the CMA really wants to get this off of their docket. And my concern is that the, the desire to get this off the docket made Trump, forgive the pun, the desire to get this right and there's the.

[Don Marty]

Desire to get it right and the desire to not post a massive loss. And if the CMA ends up giving Google a button that turns off third party cookies but not Google to Google tracking, then wow, Google is now massively in trouble as a gatekeeper company in the EU and that becomes the whole next case. And the story is CMA lost their case. So realistically I don't think that the dismal cookie only preference is going to be something that, that CMA Lets them get away with.

[Alan Chappelle]

I hope you're right. Hey, I've just got one more thing that I'd love to riff on a little bit. I mean, it's been speculated that, you know, the DOJ or some antitrust entity is going to require a spin off of Chrome. And I'm just curious, like, how does that play out, particularly with your, your kind of Linux example of, you know, because that's a really big piece of software supporting millions and millions of users. I mean, what happens if that gets spun off? Do they just create, you know, do they just keep move forward with the privacy sandbox or is something else happen?

[Don Marty]

Oh, I remember how much fun the web was in the late 90s when the new version of Netscape would come out and there'd be something new you could do on the web and some other legacy software vendor had connected their thing to the web. And so now there's another thing you could do on the web. So realistically, like every week your weekend hacking project could be, hey, I'm going to write a Perl script and there's going to be some awesome new thing on my site, right? And spinning off Chrome from Google would set off another wave of innovation and productivity like that. There's so many cool projects that are available to be done within the browser that would extend the capabilities of the web for users. It would let people hook up new stuff to the web. It would, it would be a big creativity and productivity explosion. And the Chrome team, they have people who are really, really good at the web who are able to do this stuff, right? And so now Chrome innovation is being held back by the filter of it's tied to the same company that has to grow YouTube revenue at the expense of other publishers. It's tied to the same company that has to push their search experience, which is suboptimal for users, but it's better for revenue reasons, right? So you've got this incredibly creative team and fundamentally well designed product that's held back by its connections to all these legacy other businesses. So setting Chrome free would be another great blossoming of the web as a creative environment and an entrepreneurial environment.

[Alan Chappelle]

So you're taking the optimist view. And I actually, I don't disagree with any of that. The, the one thing I will note is that the minute you spin Chrome off, all of the restrictions around the deprecation of third party cookies probably get enacted very quickly and then that has the net effect of enabling the rest of Google. I don't know what's going to be left at the end of this. You know, assuming that if they spin off Chrome and they spin off the, the network business, boy, that relieves a lot of other stuff that. So Google may ultimately win in that environment, even if everything you said is true. But I'd love to hear what Ariel has to say.

[Ari Paparo]

Yeah, a couple of things. One is, I don't think Chrome is economically viable as a spin out because it has a large number of super expensive staff. So I agree an open source project can be sustainable, but Chrome in particular probably costs hundreds of millions of dollars to maintain. The second thing is I do agree that the whole sandbox conversation just becomes moot. It disappears. It's nonsense. They remove cookies and everyone moves on, which has a short term, very negative effect for publishers and media. Long term, I think it'll come back. There are alternatives, but there's always been this question of how aggressive the disruption is on the day cookies go away. And unless the courts or whomever dealt with the spinoff were very careful, it could be hazardous to everyone's health.

[Don Marty]

Yeah, when you spin off Chrome, you've got to spin off Chrome as a business with enough money in the bank to make that transition. Realistically. Right now, Chrome is a single organization with a single source of revenue. And yes, as a thriving commercial open source project, they would have some development teams that aren't on Chrome's payroll. That kind of transition would take quite a while to do. So spin off Chrome with the understanding that they're going to become a thriving business on their own, but give them enough, enough cash to realistically make the transition.

[Ari Paparo]

Yeah, I think also you have the opportunity in hardware. Chromebook could become a viable business. I mean, it's a pretty small percentage of the PC market, but when you don't have to pay for the operating system, you can make some margin on it.

[Don Marty]

And there's all kinds of services that could be tied to Chromebook hardware vendor partnerships where companies that, that might be cautious about partnering with Google because Google probably competes with them in their other businesses, would be more willing to partner with an independent Chrome.

[Alan Chappelle]

Okay, I think we're going to end it there. This has been a great conversation. We've got a bunch of other episodes coming up, including next week I'll be talking to Duncan McCall, who's formerly of PlaceIQ, and we're going to talk about the history and the evolution of the precise location, space. And please subscribe to the show on Spotify, Apple, YouTube or wherever you listen to your podcasts. And Don, thank you so much for being here.

[Don Marty]

Thanks for having me.

[Alan Chappelle]

And Ari, as always, thanks was great.

[Ari Paparo]

Don, thanks for being here.