This may not be what the corporate sponsor Google, which benefits from internet piracy and fights enforcement proposals, had in mind when it funded the research. Google is currently leading the opposition to the new SOPA legislation in the US, which obliges service providers to take greater responsibility.

Perhaps, as in Brecht’s poem, Google wishes “to dissolve the people and elect another”, until they get the answer they want.

Columbia University, who Google funded to conduct the survey, has a very hard time spinning it favourably for their corporate paymasters. They resort to the old trick of rephrasing the question until it got the desired answer. (Statisticians sometimes do something similar: it’s called “torturing the numbers until they confess.”)

Asked if websites should be “censored”, 46 per cent said yes, and 49 per cent said no. Fewer agreed if the question was posed in a way that implied legal content was being accidentally blocked. And asked if “the government” should “censor” websites, the number fell still further, with 36 per cent in favour and 64 per cent disagreeing.

The researchers stopped short of asking whether the public approved of the government unlawfully kidnapping their children while they censored websites and burned the Holy Bible just for fun, which is a pity. But you get the general idea. The answer depends on the question.

Two UK surveys have both shown strong public support for stronger law enforcement for online infringement. Even pirates agreed with the proposition that they were doing something a bit iffy, and would stop.

Which brings us to what wasn’t asked in the survey. There are some serious omissions.

In the UK, a mere 11 per cent disagreed with the statement that: “It is important to protect the creative industries from piracy.” But remember this new study is Google-funded research; they don’t want vital context like that spoiling the numbers. The same UK survey also showed that whacking free-riders is popular; 51 per cent polled in the UK thought serial copyright leechers should be punished more strongly, including many “pirates”. That question wasn’t asked by Columbia, either.

The survey instead asked if people had ever committed online copyright infringement, and the answer tells us something we already know: many people have, and the number rises among under-30s. It doesn’t ask if this is a regular occurrence, and how much is casual and how much is “hardcore”. The survey does ask how much of people’s personal collection is pirated, but what would be more useful is a “flow rate” (like the GDP measure), not the accretion, so we haven’t really learned anything about habits or behaviour.

The researchers instead ask whether the public like any of the punishments on offer, and guess, what? They don’t really like any of them very much.

Early data from France suggests most people stop pirating after just one letter, the number of people who have received two is tiny. Spending money on recorded music is now optional, and the copyright industries hope that people who love music go back to buying more, rather than spending the “saved” cash on beer and other entertainment, as they are free to do now. This is the justification for the legislation.

(Which is clumsy stuff, as your reporter never ceases to point out; there are other ways of discouraging anti-social behaviour than blocking sites).

No industry research into piracy is ever believed by opponents of digital copyright enforcement, the so-called “copyfighters”. This is for two reasons: studies have in the past have notoriously exaggerated the economic impacts of piracy for tactical reasons. Much like alarmist Greens, copyright groups want the threat to be seen as exceptional, requiring exceptional action. But secondly, pirates don’t want to acknowledge that piracy does anyone any harm – so they block their ears.

“What’s that you say? Never paying for anything hurts the creator? That can’t be true. And oh, I can’t hear yoooou!”

In fact, that seems to be exactly what happened here.

What happens when competition watchdogs lose their teeth – and roll over to have their tummies tickled? Via the influential chair of the Commons Culture Media and Sport Select Committee, John Whittingdale MP, comes a very interesting story today. Whittingdale relates a conversation with John Fingleton, the head of the Office of Fair Trading. The MP asked if the agency had looked at the question of Google’s power in the marketplace.

Google has a dominant market share of paid search advertising, effectively setting the price of doing business on the internet for small companies. The conversation took place at around the time it became known that the European Commission began to probe the company, and its customers, in response to a series of complaints. The FTC opened its own investigation this summer.

“The head of the OFT told me that Google was a fantastic organisation, a fast developing company, and should be applauded,” the MP said.

The job of a business regulator, we hardly need point out, is not to swoon like a gushing schoolgirl delighted that a boy band star has swept into town. Fingleton had also offered his views – although a little more circumspectly – to The Guardian newspaper, in November 2009.

“We see a lot of customers benefit from what’s happening in this marketplace from very high innovation – it’s good for the British economy. We don’t want to send a negative signal about that,” said the watchdog boss.

The job of a regulator now includes “sending out signals”.

Google appears grateful for the support: Schmidt quoted Fingleton’s remarks in his MacTaggart lecture to TV executives recently.

The remarks will highlight Google’s close relationships with ministers and the permanent bureaucracy. A recent investigation into intellectual property was launched by Prime Minister David Cameron, citing concerns raised by Google executives, and soon became known as the “Google Review”. Its conclusions advanced copyright measures that could benefit large internet aggregators.

Last week, PR Week reported that a top Cameron strategist is joining Google. The Chocolate Factory lent the Conservatives’ chief strategist Steve Hilton a desk while he was working for the Conservatives, WiReD mag reported last year. Hilton’s wife Rachel Whetstone, formerly political secretary to Cameron’s predecessor as Conservative leader Michael Howard, is Google’s global head of communications and public policy.

Whittingdale was speaking at an iComp seminar; iComp is the group looking to clip Google’s wings. Whittingdate reiterated his personal view that government regulation is harmful. All the same, he said, he found the OFT’s insouciance quite remarkable.

We asked the OFT whether the conversation reflected its current view of Google, but it hadn’t got back to us as of publication.

Is Google’s acquisition of Motorola Mobility is good for Android, or an expensive mistake for Google, made in a moment of irrational panic. Columnist Matt Asay thinks it “spells iPhone doom“, and he’s not alone. John C Dvorak thinks it’s “pure genius“. This supposes that Google performed a cost-benefit analysis and calculated that the cost of not buying Motorola’s phone and set-top box division was greater than $12.5bn.

I beg to differ. Not all business decisions, made in the pressure cooker, are as rational as they should be.

On Monday, I explained that Google hadn’t bought what it thinks it has bought. Since then some very interesting new detail has come to light. This suggests that the Chocolate Factory really doesn’t understand the value of its proposed acquisition, and snapped up Motorola not merely in a hurry, but a blind panic. Pulling out of the deal may now be sensible – but also costly for Google. The deal carries a $2.5bn break-up penalty, which is smaller than AT&T’s penalty for failing to complete its acquisition of T-Mobile US, but is still a hefty sum of money. Should this happen, Google will have paid almost as much to buy nothing as it did to buy Doubleclick, its largest ever acquisition.

Let’s look at some evidence.

Bidding against The Beast

Two separate reports are suggesting that Google entered negotiations to buy Motorola Mobility only after it heard that Microsoft was talking to the company with view to an acquisition. This may give you deja vu. Remember that four years ago, Microsoft was about to acquire DoubleClick for about $2bn, which a lot of analysts thought was too much money.

Then, late in the day, Google joined the bidding war and sealed the deal for $3.2bn. (Google has only just updated the creaky Doubleclick infrastructure, much of which was a decade old.) So both rivals have form here. Microsoft knows how to raise the price of an acquisition target, and Google has form for paying over the odds for something it thinks it needs, but might actually be able to build better and more cheaply in-house.

Google spurned the chance to acquire up to 18,000 relevant mobile patents by acquiring InterDigital. Reports said the two were in talks last month after Google lost the Nortel auction.

Now these really are worth something: In 2005, InterDigital took Nokia to the cleaners for over $252m in a favourable patent settlement. To get one over on Nokia is quite an achievement – and not something Apple was able to do; Apple’s settlement of outstanding litigation saw it pay money to Nokia. InterDigital’s IP was apparently for sale for $2bn – $10bn less than Google wants to pay for one of America’s oldest manufacturing companies. And there’s a lot less baggage, of course. That would certainly have made sense.

The other area, explored in great depth by Florian Mueller at FOSSpatents, looks at the relevance and therefore competitive value of Motorola’s IP. Florian knows how many beans make five.
Feel the quality, not the weight

Patents are often compared to nuclear deterrents: something you need to have to avoid aggression, but don’t ever want to use, if at all possible. You build up your deterrent by building up IP. But as Florian (and others) point out, the volume of one’s patent arsenal becomes irrelevant once the shooting starts.

Patent litigation isn’t won by weight: the war is not one of endurance, with one side running out of bombs to throw. Patent disputes are fought over small numbers of infringing claims, rarely more than a few dozen patents. So the deterrent value is already gone once you’re in aggressive patent litigation. It is nice to have something to throw back, of course, but it merely has to be relevant. It matters far more how deep your pockets are. Google has deep pockets. So again, InterDigital would have done Google just nicely.

Mueller emphasises some of the issues I raised earlier this week – that Motorola’s IP doesn’t help Google with the current litigation it faces from Apple and Oracle. He adds that this litigation is already well advanced, and will commence in earnest this autumn, before the acquisition has been completed. For legal reasons Google had to agree this week, the IP doesn’t come into play just yet. Mueller has also looked at the relevance of Motorola’s IP, and here it gets really interesting. It is much less scary than the mobile industry thinks.

Motorola’s IP has not deterred Apple from striking.

“Apple truly wasn’t deterred by Motorola Mobility’s grossly overestimated portfolio,” writes Mueller. How does he know? Because Motorola said so, in a move to get a declaratory judgment (a patent-holder’s pre-emptive strike) made last October.

“Motorola Mobility’s portfolio has failed to deter, and it has so far failed to make any meaningful headway in litigation,” he wrote. “Motorola Mobility is on the losing track against the very two companies Google says those patents will provide protection from.”

Wrong patents?

Motorola itself says its patent strengths are in “video compression, decompression and security tech”, which again have little deterrence value, as GigaOM’s Darrell Etherington argues. When the shooting starts, and Google finds itself facing retaliatory patent lawsuits, “video compression, decompression and security” could cause real harm to significant parts of its business. And several analysts have pointed out that Motorola’s IP is already broadly licensed, thus reducing its deterrent value. Doubtless there are trivial-sounding patents from which a resourceful legal team could create a feast, but retaliation simply invites more retaliation.

“Now that I see the break-up fee and have thought some more about the overall situation, I’ve reached the point at which I simply don’t buy the ‘protection’ theory anymore,” writes Mueller.

No, I don’t either.

Buying IP without buying Motorola Mobility was the rational thing to do for Android. It would have made sense. The risk of duking it out in court was risky, but might also have been plausible: patent settlements rarely go into the billions. So losing to Oracle may prove costly, but still cheaper than the acquisition cost and hidden opportunity costs (eg, losing Android partners) of acquiring Motorola Mobility. Google’s risks in many areas have just increased. What it has really done in this ill-advised move is grab the shooting target from the corner of the field and hold it over its heart, saying: “I dare you to shoot now”.

If this strikes you as a rational business decision, then good luck. ®

What do you do when a global corporation pays out millions to the watchdogs that we expect to protect us against it? It’s a fair question to ask in light of the Chocolate Factory’s legal settlement this week, over Google Buzz. The privacy class action suit has landed a windfall of millions of dollars to “privacy” groups – but not a cent to ordinary citizens, users of Google Gmail’s service whose privacy was compromised.

The Washington Legal Foundation’s chairman Dan Popeo, a pro-business organisation, is one critic who has raised an eyebrow.

Google offered $8.5m to settle several class action suits last September. The Court made a preliminary settlement late last year and decided on the dispersal of money in February. The lawyers took a cut of just over $2m, leaving $6m to be spread around some 77 organisations. Only 12 made the cut.

Amongst the groups that failed to squeeze its snouts into the trough was EPIC, which complained that the selection process favored “organizations that are currently paid by [Defendant] to lobby for or to consult for the company”.

To say the least, that’s an interesting description of the ACLU and the Electronic Frontier Foundation, which both hit the jackpot, receiving $1m each.

Judge James Ware approved the payouts,and then he included EPIC and one other recipient too.

“Why were these lucky 14 settlement fund recipients chosen and not others?,” asks Popeo. “What criteria were used to choose them? How will the $6.1 million provide an ‘indirect benefit’ (as the judge put it) to the faceless, nameless plaintiffs in the suit?”

Popeo also notices another curiosity. In addition to EPIC’s ticket on the gravy train, Judge Ware managed to find $500,000 for the Markkula Center for Applied Ethics at Santa Clara University. Why that particular faculty? It’s anyone’s guess, but quite coincidentally, the Honorable Judge Ware is a lecturer at Santa Clara University.

It’s a strange arrangement that sees purportedly independent “citizens groups” come to become recipients of cash from the companies they claim to fight, on citizens’ behalf. A cynic would suggest that they might forget to bite the hand that feeds them.

And $1m is not a trivial amount to the EFF: in 2008/09 the organisation saw gross income of $3.42m, and was left with a shortfall of over $400,000. Google’s cash from this one settlement alone exceeds both individual membership fees, and individual contributions – both under $1m. You could almost describe relying on Google is a kind of business model.

(Former EFF board chairman Brad Templeton is an old pal of fellow Burner Larry Page, as he explained in an unusually generous critique of GMail.]

It’s all quite cosy. Perhaps the groups could nominate Google for one of their many awards: we suggest “Most Munificent Litigant”.

Bootnote

Europeans shouldn’t be so smug. The superstate hands out millions of Euros to environmental groups to lobby the EU. Greenpeace, to its credit, refuses to accept the cash.

“Nyah”

For years, Google has been the Stroppy Teenager Kevin when it comes to copyright – full of attitude, and refusing to tidy up the bedroom. But do yesterday’s concessions make any difference?

No.

The way Google has handled this won’t inspire confidence that it’s sincere in finding a long-term solution. The commitments are vague and the headline-grabber – the DMCA response – merely obliges Google to do what it’s obliged to do anyway.

Google has already tipped its freetard supporters overboard once this year by abandoning its Net Neutrality posturing and lobbying for something more practical – a rapprochement with Verizon it hopes will be a template agreement. As news of Google’s new copyright statement rippled round the web, people wondered if it had repeated the trick. But the substance doesn’t really match the billing.

It’s worth identifying the beef. Thanks to digital technology, informal copyright infringement is always going to take place. When it’s word of mouth, it’s almost impossible to monitor and police. The hardcore freetards will always be with us – just as people who never buy a round of drinks in a pub will always be with us.

It’s also a fair bet that more infringement will take place through such subterranean channels in the future than it does today. Possibly much more. Creative industries will just have to live with it, just as they learned to live with home taping.

But this really isn’t the issue here. The issue for creatives, many of whom are small independent operators, is when giant middlemen such as Google encourage piracy and profit from it, while using the law as a shield. Remember that by law, we’re all creators, and automatically protected by the umbrella of international frameworks that recognise and encourage creativity. (For some creative works you have to assert some of your rights, such as moral rights, explicitly – but most are covered automatically.)<

Creators' rights are human rights. But all this protection is useless if the giant scrapers, aggregators and middlemen of the Web play deaf.

The plight of filmmaker Ellen Seidler has gone a long way to highlight this, bringing the issue home in ways that professional lobbyists haven't managed. Nobody could mistake Seidler for a pigopolist. Yet her hit independent lesbian romantic comedy And Then Came Lola led to Seidler spending much of her free time manually filling out infringement notices, and it was almost certainly deprived of a DVD release by pirates.

The DMCA is supposed to redress the balance by helping the individual creator – who doesn’t need a lawyer. But Google hates it, and warns people off using it.

Here’s an example [1] of how Google scares an individual away from exercising their rights. If you dare fill out the DMCA, you get a super-scary warning that:

Your letter may be sent to a third party partner for publication and annotation … your letter may be forwarded to the Chilling Effects for publication …

This implies you’ll be identified and humiliated, and hauled before a cyber court of bullying freetards, simply for exercising your rights. Bullying was enough to silence Lily Allen – so what chance do you have? Are you feeling lucky?

Then Google warns you of the possible costs involved – a case in which the party making the request was hit for $100,000. Yet the DMCA requires no lawyer, by design. The warnings do the trick – and scare most people away. And it’s still up there [2], intact.

Google has promised to act on DMCA requests within 24 hours. But everyone already has to act on DMCA requests immediately. So why this is regarded as a “concession” is a puzzle.

Google actively tidies up its own search results, but pretends to be selectively unable to do so when rightsholders knock on the door. Nyah, it tells photographers, publishers, songwriters, filmmakers and bands. Just like Kevin can go selectively deaf when asked to tidy his bedroom. Nyah. At least it has acknowledged the double standard here, implicitly if not explicitly.

Sarah Hunter, former Blairite culture policy advisor, god-daughter of Lord Irvine and now Head of UK Public Policy at Google, gave a decent impression of Kevin The Teenager to a Westminster conference I had the pleasure of moderating recently. Hunter’s contribution was a collection of Noughties-era anti-business, anti-creativity prejudices.

Hunter said she couldn’t see why we all had to call creative industries “creative” – shopping was just as important to UK plc. She gave every impression of having scribbled her talk down on an envelope in five minutes – and it stunned the room with its arrogance, complacency and philistinism.

A month ago, we gather, Hunter was mauled in private by Ed Vaizey for not doing more to help small creative music businesses. (The talk mauled everyone – music business and ISPs – for not doing more – but by reminding Google that it has to respect other established UK businesses, Vaizey surprised everyone.)

For lifelong policy wonks like Hunter, who’ve never really had a proper job in the real world, this must have come as a shock. For Google, they must be wondering if Hunter is now an asset, or a liability.

For some reason, internet utopians still regard Google as the heroic leader in the struggle against The Man – and it let its fans do the talking on the blog post yesterday.

“I think the ‘entertainment’ industry just needs to realize no one wants to pay their outrageous prices for stuff,” writes one freetard. “I don’t think copyright has long to live and it will rapidly become irrelevant as internet speeds improve,” writes another.

As Kevin The Teenager might say – “whateverrrr…”.

Links

1. http://www.theregister.co.uk/2007/10/02/google_orkut_dmca/
2. http://www.google.com/dmca.html

At a typically oversold launch event yesterday, Zuckerberg complained about the “friction” generated by having to compose a simple email. You had to type a subject line in, he said, incorrectly, making people wonder if he’d ever used email himself. It’s too formal, he concluded. The poor love – I’m surprised he hasn’t thought about suing the developers of POP3 for emotional distress, as well as repetitive strain injury.

The Facebook plan is to integrate email and SMS into Facebook, into one great big inbox, which will be stored forever. And which will naturally drown people who are not on Facebook under a tide of real-time chaff – Web2.0rhea, as we call it here.

The irony here is that Facebook is already a privatised messaging platform. It has got to where it is on merit, I think – it is a rich and nicely implemented UI. Ordinary people think of it as a quite natural “upgrade” to the Hotmail and Yahoo! mail services that they were using 10 years ago. These gradually got inundated with spam and special offers. Maybe Facebook will too, but for now, “communicating” means stopping at Facebook first – because people’s friends are there – and then (more wearily) logging into Hotmail and wading through the promotional coupons, special offers, bogus solicitations to login to your bank account, and Viagra advertisements.

It might strike some people as unfair to think of Facebook as the new Microsoft. People, who’ve drunk the liberation theology Kool Aid of Web 2.0 suppose that the web is a kind of Garden of Eden, where startups are always bright and inventive, where disputes are set aside, and where the good guys generally win.

Microsoft liked to keep its email protocols proprietary, of course. Outlook email is just bog-standard email protocols, wrapped in overly complicated and non-standard DCE/RPC calls. Hotmail and Exchange Server used another internet protocol, WebDAV, which while not as impenetrable still required some work to talk to. Facebook hasn’t had to do it at all. It already has a critical mass of users, which is essentially a privatised address book.

(I’ve railed against the paucity of email clients recently – I realise it’s a minority pursuit, and protocols haven’t evolved as fast as the web services. But from your response – 70 emails on a Sunday – I know I’m not alone in ruing this a little).

Don’t count your pokes

However I fear that hubris is Zuckerberg’s middle name, and things may not go as smoothly as Facebook hopes.

Typically, Zuckerberg hasn’t thought through the implications of the integration for people who aren’t like Zuckerberg (and think subject lines are mandatory, and adding a salutation (“okthxbye”) creates “friction”.

The major design error is supposing that people value all communications equally, at the same flat level, and that messages from the boss who sends one every six months are of equal importance to the Twittering ex-colleague who sends 45 a day.

Each communication medium we use has different norms, and of course different levels of privacy – something Facebook emphatically brushed aside yesterday. How will Facebook acknowledge this? Perhaps it will hire some more UX gurus and give email a slightly different hue of some pastel shade in the inbox. That’ll fix it.

Facebook’s “social inbox” is anything but. It doesn’t really help people on the outside reach people on the inside. It doesn’t help Facebookers manage their communications with people on the outside. It’s another argument that because Web 2.0 designers don’t understand the subtleties and contradictions of real human relationships, they can’t create software that helps real people.

In the last century, an intellectual fashion swept out of psychology, where it had been born, into policy making. BF Skinner was a utopian who believed man could be changed for the better. He suggested we were the results of our conditioning, and our behaviour could be trained, much as rats can be trained to urinate on command. “Behaviourism” had great appeal to politicians, as well as advertisers. It was a nasty “-ism” that fell out of favour for several reasons. One of these was Skinner’s insistence that we are incapable of constructing our own environment.

Web 2.0 sees the return of behaviourism, but with a smiley face. It forces us to respond in a limited numbers of ways. But we continue to choose our mediums, and construct our own environments. Zuckerberg has made the same mistake as Skinner.

Earlier this year, Google tried to turn Gmail into Facebook. Facebook is trying to embrace and extend email. Is it wicked to wish that both of these data-hoarders learn a vital lesson from this?

Read responses to this article in our Mailbag.

Hollywood is going after advertising companies who help fund pirate websites, and has now won a landmark victory.

Two Hollywood studios, Disney and Warner Brothers won $400,000 damages in a legal settlement case with Triton Media for contributory copyright infringement and inducement to infringe.

Triton was placing advertising services for a number of sites including free-tv-video-online.info, supernovatube.com and watch-movies.net that stream or link to unlicensed content. A Federal judge also barred Triton from deal with the sites.

The case follows an earlier victory for Hollywood against Supernovatube’s operator Mohy Mir. Mir now describes himself as a self-employed SEO consultant. Triton’s business is historically radio advertising.

The question, asks the Hollywood Reporter, is: “Does the MPAA have the stomach to pick a fight with the elephants in the room or will it aim to pick the cherries of low-hanging fruit from companies like Triton?” And the biggest elephant in the room is Google.

The MPAA’s critics point out that that Hollywood’s studios have far greater resources than many web marketing companies. But many filmmakers are independents – essentially individuals who find themselves battling an indifferent behemoth.

The WSJ reported how over a two year period, two illegal download sites grossed over $1.1m in web advertising – returning nothing to the creators. $809,000 of revenue came via Google.

“Why is it so hard to make the decision not to enter into business partnerships with sites whose business model is obvious infringement of the works of U.S. creators?” asked Patrick Ross of the Copyright Alliance. “Why do you continue to place ads on these sites, participating in a duping of consumers into thinking they are following the law when instead they are helping to fund international criminal ventures?”

The David vs Goliath battle was dramatically highlighted by indie moviemaker Ellen Seidler who directed the lesbian romantic comedy And Then Came Lola, who describes the extent of advertisers’ involvement with the sites – and the time-consuming game of whack-a-mole to take them down.

“Everyone makes money in this equation – except the filmmaker,” she notes. There’s more on her blog PopUpPirates.

In 2007 Google said it would screen keywords commonly used by pirate sites (such as “bootleg”). But does it screen the purchasers? When Google launched its music search service in India last week, it showed it can filter and block illegal links. You don’t have to be a PhD to guess what you’ll find at warerzs.net – a typical pirate site that runs Google ads.

Seidler also takes a swipe at Hollywood for not taking up cudgels on behalf of the independents.

“The MPAA and other major organizations who are supposedly working very hard to combat piracy would be better served to really promote the idea that piracy is not just damaging executives at the offices at Disney but it’s really damaging all of the people who make their livelihood day in and day out doing catering or makeup or set design,” she said in an interview earlier this year.

A new report commissioned by Google, and timed to coincide with the first ever Parliamentary debate on the company today, puts itself and the internet at the heart of the British economy. But it does so by using some creative and interesting definitions.

According to Boston Consulting Group, the internet sector in the UK is worth £100bn a year or 7.2 per cent of GDP, almost as large as the UK financial services sector, and larger than utilities, transport or construction. That sounds a very large sum.

Google/BCG arrives at this by including all online e-commerce as an internet contribution to GDP, rather than a contribution made by retailers or services companies.

“The full value of goods sold online is counted because it gives the sense of the importance of the internet as a retail channel,” say the authors. Why include the value of every good sold?

“Many of them might not have taken place without the internet as catalyst.”

As Tim Worstall points out: “What they’ve done to get to their GDP number is take the value added of everything that is connected with the internet: rather than the value added by the use of the internet.” Using this logic, the financial services sector is worth 100 per cent of GDP, because everything involves a financial service, such as retail banking.

The report estimates that B2B transactions conducted via the internet are worth £360bn, but doesn’t include these in the final sum. Quite rightly: that would be crossing the silly line, and falling into the silly ditch.

The report has a sprinkling of anecdotes about successful business built on pay-per-click advertising, and laments that “collective intelligence” such as crowdsourced user-generated content isn’t measured by GDP. And we learn that “the internet has brought the world closer together through email, IP telephony, instant messaging, and social networking”.

Aww.

The report can be found here. The Parliamentary Debate, tabled by MP Robert Halfon, commences at 2pm. Halfon is concerned by Google’s attitude to personal privacy, offline and online.

Google must hope MPs have read the headlines, but not the report itself.

Bootnote

An earlier version of this story could have suggested that the $100bn figure included purchases made in store after online research. This was not the case, and the story has been amended to make this clear.

One of the oldest mottos at Vulture Central is Show Us The Money. There’s one even better, I think, which is Show Us The Profits. Are there any? If there are, where are they going? At a stroke, this cuts through huge amounts of hype and puts entire industries (and, for good measure, almost anything WiReD magazine has ever endorsed) in a much clearer perspective. So have a gander at the following analysis of the mobile phone business – it’s quite startling.

Asymco is a one-man analyst company operated by Horace Dediu, a former Nokia manager in Helsinki, erudite and informative with a good eye for history. Earlier this week he looked at the profits of the largest seven manufacturers, responsible for 80 per cent of the phones sold, over the past three years. The trend indicated last year is now quite clear, with two North American companies capturing the lion’s share of the profits. In Q2 2007, Nokia pocketed 63 per cent of profits; Apple and RIM just seven per cent between them. Wind forward three years, and Apple and RIM snag 65 per cent of the profits, largely at the expense of Nokia, but helped by the collapse of Sony Ericsson and Motorola, who are a tiny shadow of their former selves.

There’s a conclusion to be drawn for Google and the Android licensees, thinks Asymco. None of the three leaders are likely to abandon their in-house platforms for Android, it’s either inferior (to iOS) or (as with BlackBerry OS, Symbian or Meego) switching simply isn’t worth it. So Android is left to target the very manufacturers who have been squeezed. And that in turn leaves them with some tricky choices to make. Android is becoming a commodity platform, so they need to differentiate themselves from the rest of the Android rabble: we’ve seen Sony Ericsson, HTC and Motorola invest heavily in their own UIs. But because Android is a commodity platform, this investment isn’t worth it.

Dediu reckons:

“The real challenge is that partnership with defeated incumbents whose ability to build profitable and differentiated products is hamstrung by the licensing model and whose incentives to move up the steep trajectory of necessary improvements are limited.”

Their fate, predicts Dediu, might mirror something quite familiar:

“Android’s licensees won’t have the profits or the motivation to spend on R&D so as to make exceptionally competitive products at a time when being competitive is what matters most…the same lack of symmetry with licensed software vendor Microsoft is what led the failure of the same incumbents to make a dent in the industry with Windows Mobile [2003 to 2010].”

Ten years ago, this was always the fate that Symbian dangled in front of licensees tempted to follow the Microsoft path. Look at the PC business, they said, nobody makes any money. (Today, we know the PC business is an illusion, a polite fiction that behind the curtain is funded by Intel and Microsoft themselves.) Symbian’s proposition was that manufacturers could differentiate themselves at the UI level – similar to what Google preaches today. But this never really solved the profits conundrum either. Maybe no platform company can ever offer a solution – today’s bling, high-margin high-end phone will always going to be tomorrow’s throwaway low-margin commodity, and the only way to keep profits coming in is to keep creating cool innovative things people want to buy. Android’s licensees won’t have the profits or the motivation to spend on R&D so as to make exceptionally competitive products at a time when being competitive is what matters most. An analysis of the smartphone business seems to put things in perspective quite nicely. Related Link : ‘Android’s Pursuit of the Biggest Losers’ – Asymco