Power to The People – Part 2

Despite it being the largest corporate employer and having no shortage of detractors, Wal-Mart doesn’t come close to qualifying as a monopoly. Granted, in many areas, especially rural, their presence has greatly reduced the number of options available as the opening of Wal-Mart stores goes hand in hand with local merchants not being able to compete with the price and selection of the incredibly efficient retail behemoth, but by and large consumers and merchants can live without them. If you live in some of the most densely populated cities, chances are you won’t step foot into a Wal-Mart, Wal-Mart Supercenter, or Sam’s Club. With more than a million workers in the United States alone, though, you would think that its employees would have some collective bargaining power. But, as we argue in Part 1, unless the end-user feels the pinch, the needs of the workers will not prevail. And, in this time of relative prosperity, despite our beginning a recession, unions find it harder to win support. Those at Wal-Mart will find it even harder, especially during the recession, as the company will successfully convince people that unionization of its employees would increase their costs, and when it comes to helping a million people better their lives versus one person save money, the one wins every time.

While Wal-Mart doesn’t qualify as a monopoly, its control over its employees might, and in that situation it comes down to a balance of power. Their employees need them more than they need their employees, as it all comes down to leverage, but leverage and absolute control in the face of complete end-user apathy doesn’t just occur offline. It happens online, too, but unlike a vacant Wal-Mart, its often harder to feel the impacts even though they can be even more severe.

Ebay
Ebay sellers, i.e., its merchants, have a long and colorful history, especially when it comes to vocalizing their discontent over the evolving policies that govern the way they do business, most vociferously upon increases in fees they must pay for the right to do business via the eBay marketplace. And, sometimes they take action, boycotting the site, which unfortunately for them succeeds in generating publicity but not in changing the policy. One reason – it relies on cooperation, and in competitive markets, people rarely cooperate. I might be outraged and think about participating in a ban to show them a lesson, but chances are I’ll either begin listing sooner than organizers want or avoid joining the ban at all. Why? Because, just as many users will still shop, I will have less competition. It gets back to the notion of short-term thinking. EBay sellers would have to unionize for it to truly work, agreeing in writing and suffering consequences for not joining. They haven’t yet and probably won’t, but they came as close as they ever have to an effective boycott just a few weeks ago. The most recent lightening rod did involve fee hikes, but for many it involved a more significant non-monetary change, one in the feedback system that will prevent sellers from leaving negative commentary about their buyers, along with a less publicized change to their "best match" algorithm that puts smaller sellers at a disadvantage.

The strike which went from February 18 – 25 which some extended for another week until March 3, has had mixed results. Prior to the strike, eBay modified some of its recent fee changes to appease certain high volume sellers in lower-priced categories, but no changes have happened on the core issues that led many to strike in the first place. Some data suggests lower listing volume, but how much is strike induced versus how much is due to post-Valentines day remains unclear. What the strike really needed it didn’t get, support from the largest of the sellers. As reported in Fortune, the Professional eBay Sellers Alliance (PeSA), a five-year-old, 400 member organization whose members report annual grosses of more $400 million combined, remained on the site, their former board director Brandon Dupsky saying, "When you’re at a size like our sellers are, you’re running a business, and trying to make money to pay for employees, rent, warehouses," and that, "A boycott would only hurt yourself more than it would ever hurt eBay." At the end of the day, one merchant summed up the situation best, "I’m scared because there isn’t anywhere else to go." That sounds eerily similar to ever-increasing views about another online entity with a stranglehold over its advertisers.

The Google Monopoly
As I mention in the well-received story on my personal blog, Guilty Until Proven Innocent, much has already been written about Google being the new Microsoft. The latter has no shortage of people who have creative and innovative levels of dislike for the world’s largest software company. From a user’s perspective, only the savvy few can live their lives free of Microsoft’s reach, and trying to live without them highlights the difference between being able to live without something and having equivalent options easily within reach. You might be able to live without Microsoft, but it’s not easy for the vast majority to do so. The same is true of Google, albeit in a slightly different way. As a consumer, other options exists; whether they are equivalent is up in the air, but they are available for use without difficulty. Where the reliance on Google and the comparison with Microsoft comes into play happens when we look at businesses. As a business, unlike a consumer, you do not have the same ability to live without Google. Whether you rely on organic search traffic or paid search traffic, if Google judges you unfit, your business will be ruined. It’s why in my blog post on the subject, I consider Google a socialist state. Fall victim to their wrath, and you don’t just suffer a setback, you get blacklisted… for life… with no chance at reprieve. Sure, they have extensive documentation on what they consider right from wrong, but all too many of the blacklistings occur in those shades of gray. There are workarounds, but all rely on deceiving the state that you no longer practice your trade.

Why has little been written about Google’s stranglehold over its advertisers as well as its publishers? Because users don’t know, and like Wal-Mart, users won’t care so long as they have their bevy of free services. Employees certainly won’t care as joining Google provides instant status and ego assuaging to the tens of thousands who have previously never enjoyed membership among the social elite. Like eBay, the real losers with Google are those that pay its bills, because they aren’t the customer. Unlike eBay though, Google doesn’t punish its paying entities with fees – perhaps in a way if you think about Quality Score. 

The socialist practices, utter inhumanity and anti-democracy of the Google machine will only last as long as the money allows it too. We’ve seen and allowed the machine to change "Don’t Be" to "Be," and we’ve put up with canned answers to million dollar plus questions, so I ask, "When will Google’s hundreds of thousands of active advertisers decide to stand up for themselves, and when they do, what can they learn from the merchant class?"

Are you ready to try and make a difference or are you satisfied having your entire business hang in the balance, living with the sword of Damocles over your head, knowing that when it falls you don’t just suffer a fee hike but a one way ticket to Purgatory?