Why Ex-Google Ads Boss Sridhar Ramaswamy is Building An Ads-Free Search Engine

Channel: Alex Kantrowitz

Published at: 2021-05-06

YouTube video id: gTclAnE_Kik

Source: https://www.youtube.com/watch?v=gTclAnE_Kik

hello and welcome to the big technology
podcast a show for cool-headed nuanced
conversation of the tech world
and beyond joining us today is sridhar
ramaswamy
the former head of ads and commerce at
google
who is building a new ads-free search
engine called
neva neva is one of the most interesting
startups on the market today
it's raised 77.5 million dollars and is
going after
a tech giant's bread and butter that
tech giant of course is google
cereal's former employee employer
sridar is also someone i've wanted to
speak with for quite some time
and i'm so glad he agreed to come on
with us today swedar
welcome to the show alex super excited
to chat with you
love your writing love your podcast glad
to be here
really appreciate it uh you are running
one of the most fascinating
companies in silicon valley today uh and
of course your background makes it all
the more interesting so we'll just go
through that
uh but before we get to neva i figured
we'd start with the news
so this week or over the past week or so
the tech giants have had all almost all
of them have had blowout earnings i
think microsoft
beat projections but not by enough so
the stock went down which just goes to
show you how much
wall street is expecting from these
companies and google where you used to
work
or i guess they call it alphabet now uh
it had
31.9 billion dollars in search ad sales
last quarter
alone and that's a jump up from 24.5
billion in q1
2020. youtube had ad sales
that were up 49
uh to 6 billion dollars in
q1 uh so uh my question for you is how
long can this
keep up so
to me that's one of the fascinating
things today
at one level the year-on-year
comparisons
are um a bit wonky because last year
clearly um was a very tough year
um and so you know the comparison is
always
um easier now than what it was clearly
uh last year um but
i think they're also benefiting from the
increased shift to everything being
online that we are collectively going
through
so i think the growth rate doesn't
surprise me but in some sense i think
it also sets up sort of the
the next steps
in these trends and uh we'll get into
neva
uh you know a bit as we are talking
about it but to me
um this kind of growth this kind of
impact um
uh sets up some interesting dynamics
both in washington and in beyond
and in terms of opportunities and that's
really what we're hoping we'll be able
to tap into yeah
but okay so you were the ads chief at
google
and you must know that advertising is
generally a certain fixed percentage
total ad spend is a certain fixed
percentage
of gdp and you know obviously online
advertising has been spiking recently
because advertisers said
hey maybe i should stop putting all this
money in
magazines and start moving it to a
format where i can target better and
track better
tv and that's what our tv exactly and
that's why we've seen these jumps in
digital
but eventually that's gonna hit a
ceiling one would imagine
where we can't see leaps from
you know 24 billion dollars to 31
in over in a year and of course we
factor in covid but
this party can't keep going on forever
so
or maybe it can um so i guess like
yeah the core question i want to get to
you is how long is this gonna last do
you see this eventually
you know coming to a ceiling in digital
advertising
and what are the implications of that at
one level that's going to happen
when digital advertising is a lot
is like most of all of advertising and i
think from that perspective
uh we have not quite hit the ceiling
yet we have hit ceilings in
a number of areas other areas like uh
smartphone sales you know that year on
year it's not really growing
significantly
and so there are other changes i think
it's just that
the move to online advertising is part
of the way there so i would say
there is some you know some more space
um over there but all of these converts
to the level of gdp growth which all of
us know is nowhere close to that
yeah like eventually facebook and google
those numbers are going to have to slow
down
and then i wonder what they end up doing
to try to keep finding growth or do they
just tell
wall street that hey look we are what we
are and we've
we've gobbled up as much as we can get
enjoy
the margins there's definitely that and
margin always gives you enormous amount
of of power um i think this is actually
a nice point at which to talk about
sort of neva and why neva
yeah i mean your point opposite
direction
well so it's the largest untapped sort
of consumer market
it's already 150 billion dollars and
your point still growing
um you know digital marketing still
growing at 20
that's driven by the fact that it has
not caught up
with like total ad spend um
to me what is super interesting is that
there has
never been uh in the history of business
a company that has commanded 90 plus
market share
in a market that's like a hundred plus
billion dollars
which companies yeah these companies
have always gotten into trouble
i've used power in some way or the
clients want out or consumers want
choice
there's never been a company in the
history of the world like this
and and if you look at previous cases of
what has disrupted them
it is typically a subscription play if
you look back
what did hbo do to a time warner or what
did netflix do
to add supported television um honestly
in one of the very few cases that there
ever have been what adobe did to itself
in sort of moving to a sas model
or what amazon prime did to what was
like
you know traditional e-commerce which is
one-at-a-time kind of shopping
the common theme in all of this is the
subscription model
and back to my earlier point about how
smartphone sales
have kind of tapered off apple has
actually
not grown revenue significantly but its
subscription business and stock have
grown
because they have invested more and more
into services
more and more into into subscriptions
to me at a business level this is the
big attraction of neva and i'll walk
through a set
of sort of why neva and why now as we
think about it
but part of what is exciting from a
business perspective
about about neva is even if you were to
get
call it two percent of market share it
is going to command
like significantly
more in terms of things like
capitalization
if you are to look at comparable
examples from you know the
companies that i mentioned before like a
netflix like an amazon
like uh like like hbo so we think that
you know this is a great
point for neva um and there are a set of
reasons for why
you know why us yeah but before we
before we
yeah and before we jump into that let's
just set the stage so
neva is a subscription
based search engine that's right that's
right no ads
yeah neva is informed by both product
principles
and by business principles um and to a
certain extent in my mind
reflects um
a place in our cultural history what i
mean by that is the ads model has
clearly
worked for all of these companies but
the ads model has always gotten
disrupted and i know
from both personal experience and the
enormous amount of user studies and so
on that we have done
that there is resentment about it so we
wanted to create
neva as a product that catered only to
customers
that was actually very very strict and
open
about things like not having ads in it
it's a consequence of the business model
but to us
subscript subscription search was the
way to create
a superior product and having really
squeaky clean business principles not
just around no ads but also around
things like no
affiliate links ever no data getting
packaged and sold ever
on being privacy first all of those are
consequences
of the model where we say we want to
create the best product for you
so the idea is people will pay you a
monthly fee and be able to search on
your search engine
and they won't get served ads they won't
get their data collected
they won't end up i guess going to
uh links that will end up getting the
search engine
more money uh when it ends up you know
being packaged in the search results
and that's going to be worth something
to consumers
how much i i have two questions for you
about that
before we jump go go deeper into this
how much do you think you can charge
and also um do you do you think that
this could be something that
ends up going mass market you know for
netflix like i end up
uh you know paying what eight dollars a
month to get
access to their content library um
google search works pretty well and most
people are cool with the ads in fact i
think most people have a pretty
favorable opinion
of google so is this is your product
going to be sort of a
niche luxury product privacy for the
rich or do you think that it can be
something that will appeal to the masses
and what makes you
and if if so what makes you feel that
first our aspiration is to be
a product that everybody will want
um and
you know to us being able to
create a product that delivers clear
value
was very very important which is why we
said both the the fundamental model
as well as other product principles that
came as a result of
it the
counterpoint to your thoughts about ads
on google being okay
is that you know our society like on
every other issue
is layered there are some sort of people
that just say i'll scroll by it's not a
big deal
um there are others that ask themselves
wait why do i need this why do i
not get the best results right on top
where i'm going to consume them
and for a lot of our users on our own
data for example
search is something that people do like
a dozen times a day
there are not many things that people go
back to time and time and time again
i picked search as the point at which to
launch a new kind of service
was and that's because both vivek my
co-founder and i thought
that it is the ultimate aggregator of
intent whether it is you just looking
for a weather
um are looking for the answer to a
complicated financial problem in your
life that you want to solve
or something you know something super
personal and
awkward like you know if another friend
of mine told me um
i searched for how to be a good mom to a
three-year-old because my three-year-old
would stop crying
um she's like srila why would i ever
want that to get packaged up
and sold up for advertising so we think
of ourselves as creating
a daily use product without any worries
without any gotchas and we think it's it
is a daily use product and people use it
often enough
so we think that we will be able to
price this at a point
where lots of people um will get value
from it we'll get
you know we'll pay for it and much of
the early reviews that we get
on the product by the way somewhat to
our surprise
um are things like wow this is such a
relaxing
clutter-free experience um this
i actually feel good about the fact that
ads are not chasing me around that what
i do
is my business so i think more people
than we think are going to find the
product desirable
pretty much not a day goes by without
someone telling me you know we are in
the prepa
payment phase you don't pay for an eva
you just get to you just get to try it
while we make the product better
but pretty much every day someone either
wants to invest in my company like
without me asking they send me an email
saying i love your company can i invest
in it
or they're like hey can i pay for the
product um so we feel pretty good about
where we are
yeah i've tried it i've enjoyed it and
it is
interesting i think that i switched my
default and chrome
to neva and we can talk about that in a
bit because that's sort of the
source of antitrust but let's put a pin
in that for a moment um but yeah it is
interesting how
when you switch your search engines you
start to see how often you search
and it is a real stark contrast when
you're
searching on a search engine without ads
scott galloway who wrote the four and
will be on the show in a couple of weeks
uh he compares google to god like it
used to be you would ask god i don't
know if you heard this before you'd ask
god when will my sick kid be healed and
now you type it into google
you type in the symptoms and you look at
the average recovery time
and it's like wait a second uh why is an
advertiser why
why is this data going to an advertiser
as well i'm talking to god here not to
i don't know kleenex actually you raise
an important point you know something
the ad supported model even for queries
like that
tends to favor high engagement sites
that have figured out
how to get your attention and how to
cram a lot of ads
um you know in fact i joke to people
that anytime
i do a medical query and go to a medical
health site
generally my conclusion is like i have a
serious problem and i'm dying
oh my god i went to webmd a little
while ago and it was for scratchy throat
and webmd is like well you may just have
the common cold or
you might have ebola i'm like wait a
second that's a heck of a rewatch guys
do you know why why it gets you to click
it's the same as clickbait you put a
bunch
of these and by the way all of this
happens without anyone designing it to
be so
you're like okay what is the highest
likely uh
click-through after the call thing
there's an algorithm that sits there and
says if
i put ebola if i put something else that
is super serious alex is going to click
on it and go
and there's another chance to show one
more ad in front of alex it's the system
that
is working as it is designed and even on
those queries the kind of features we
think about are
hey how do we surface government website
how do we surface high authority
websites and not the ones that are
chasing after clicks
yeah and when you're when you're
creating a search engine that doesn't
have to sell ads then you're able to
make those
cooler heads prevailed responses
show up it is it is acting on your
behalf
in ways that are that just have like a
simple
uni-dimensional benefit it's just like
what's right for alex
yep now can i ask a follow-up on that
because um
you know this this stuff like the webmd
stuff uh that you know tells me i might
have ebola
doesn't say it in the search headline it
says it after i click
and i'm reading the article so
does google prioritize those like you
know obviously it's not going to make me
click more often if it's
in the page versus in the you know the
blue link in the description so does
google prioritize that stuff as well
uh looking at the page and saying okay
you know this is more clickable because
there's panic here
and let me show it earlier there's never
any uh explicit intent for things like
that
it is what are the metrics that you
optimize for
it comes down to things like if you
optimize for click through
you get a certain set of results
similarly
on social media optimizing for things
like total time spent
uh the youtube team has long had goals
you know this is years and years and
years ago and people like
talked about it they optimized for watch
time
and why do you optimize for watch time
because the more watch time there is the
more ads revenue that there is
and when you optimize for watch time you
end up recommending things that
are more and more sensational so it
becomes like what is the core model
an ad-supported model inherently drives
attention inherently drives towards the
sensational
to us part of the benefit of the
subscription model
is that it can focus a lot more on what
is authoritative what is higher quality
information for you
but like nemo doesn't care yeah if you
go to a
a retailer versus if you read a review
site versus if you place a price
alert on uh you know on on the engine
and come back four days later
they're all perfectly great outcomes for
us yeah
isn't search uh okay isn't search
a bit different though because while
youtube wants you to watch search uh
the goal of a search engine is to get
you to bounce so i guess like isn't
you you know this better than me you're
running as a google isn't the purpose of
google
to sort of you know get you useful
results so you just keep coming back
because if you do or you know do they
want you to end up
being some sort of roundabout cycle
because you'll search and then you'll
click and then you know maybe you'll
come back if you didn't get the quite
perfect answer and you'll click again
and then maybe one day you'll click an
ad
well so the answer depends on what kind
of queries you're thinking about when it
comes to commercial queries for example
sorry the algorithm is now optimized
towards showing your results
um in which you click on ads okay um
and and those are the ones that are
taking up more and more of the space
again that's the model if you optimize
for revenue you talked about 20
growth um you know one of the ways in
which you get that growth is by taking
that
extra line um and you know
search ads over the years have gone from
taking three percent
of the result on the page to 10 20
i joke to people if you search on a
place like yahoo.com
pretty much even on a large screen you
only you only see ads
um and so there is now this very strong
incentive
to show you results that are that
are ads and ads in some sense um
in a very strong sense um are a conflict
of interest
for the search engine should they show
you an ad or should they show you the
best result
and over time you know the answer is
more and more
ads right it'll surprise you to know
that one of the biggest feature asks
that we have
are things like i want to control what
retailers i see
i do not want to see big retailers when
i search for stuff i want smaller
retailers
i if i'm looking for clothing i only
want to be shown stores
that make a commitment to ethically
sourcing their material
um so those kinds of features not
showing the top retailer in the country
is not an option for an ad driven search
engine for us
it's a feature we must build because
that's what keeps you as a customer
right because that top retailer is going
to be a top advertiser
for google so google doesn't have the
ability to tell somebody who's using
google hey maybe you don't want to show
this retailer but you do because you're
not beholden to these companies
one of the interesting things i saw when
i started using the product was that
um you allow people to also tailor the
news results they want to see
so i was like so it's draft
weekend uh for the nfl and i'm searching
all right who are the jets picking and
all that stuff
and i put it into neva and now i'm
getting to decide
well do i want someone like the fan
blogs to be the
the items that show up when i'm
searching or do i want espn
and that immediately struck me as uh
sort of a really cool feature is that i
now have some more control
in terms of what i'm uh what i'm seeing
when i search
and who who gets to be part of that
is that intentional it's 100 intentional
giving you
uh giving you agency over the search
results is one of the things that we
focus on a lot
the other features we have built around
personalization being able to bring your
personal data into a safe environment
where you can search
lots of us have multiple email accounts
multiple like drive like accounts
um i was talking to someone i think that
had nine
email accounts that they connected to
their new account because they're like
yeah how am i going to search through
all of them so things like
personalization giving you agency is
very much a core part of the product and
in some ways
um you know we are impatient about the
tech that we have to build
because we want to be able to support
things like this more
and more and more and especially with
news by the way we also realized that
this is um uh
you know we worry about things like
filter bubbles we have ideas for
how we present different perspectives so
in this particular case for example
um in a in a couple of months i want to
be able to come back to you and say
hey alex would you actually you know
you're uh you're a public personality
would you be open to having your news
preferences be available to any
neva user so they can see the world the
way you see it
wow oh that's just a bunch of
preferences yeah and so we are like i
often have
diametrically opposite viewpoints on my
screen i like looking at
cnn on one side and fox news on the
other side and going this is the same
country this is my country let's see
what's here
and to be able to do things like that
but it sort of goes back to this thing
of you have choice and we should make it
possible for you to exercise
choice in different ways yeah i was
going to ask you the filter bubble
question but you sort of preempted me
but um yeah if that that's so
such an interesting point about being
able to give people control over their
search experiences
because you can of course you know this
the
most fundamental or basic layer of this
is pick your
uh pick your retailers you want to see
or pick your news or news sites but then
yeah one level deeper than that is
starting to pick you know viewpoints or
you know do you want the you know 360
view or do you just want the left or the
right view
do you want a particular person's view
we relate to yes we don't relate to
abstract concepts so you want to see the
world that alex does or david brooks to
me that's like super cool
yeah and again you know we are a signed
in product
um we are a subscription product i know
i'm not ashamed of either of these
i believe sort of capitalism should
enable great products
at scale so i don't think of ourselves
as creating somehow this elitist premium
product it's a great product of course
you pay for it
but that makes the product better that
allows us to serve you better
and along the way we want to be able to
build the features that make the product
your own
totally and none of this stuff could
happen well ostensibly well you were
there so i'll just ask you could any of
this stuff happen
at google because you know i i imagine
google
like allowing people to customize their
the publishers
that they get or you know making uh
decisions about what type of
publications to show obviously we just
went over which type of
commerce vendors that's a little bit
more tricky than if you don't have
advertisers
google can do anything you know it's an
enormously powerful
enormously successful company yeah but
when people ask me why did you not want
to do this within google
the answer is that sometimes principles
have to be thought over from the ground
up
and a successful company is necessarily
and correctly hesitant about what it
sees as heretical ideas
and so this is the reason why i felt it
was really important that we
that i pressed the reset button in my
life and where can i press the reset
button when it came to
how did we want to imagine search um
as being as you point out some things
are easy
um but will google ever really want to
create
like you know a completely ads free
product in which you can customize
everything
i said they can do everything but at
this point
in their history with all the anti-trust
stuff it is also going to look
you know very odd if they were to do
that right now
but i think this is one of those classic
cases where uh
success uh hinges on a set of parameters
that are going to become hard to change
especially after you achieve what 120
billion dollars of success that's a lot
of dollars speaking here
yeah and when you talk about heretical
ideas
that's what you're doing is it would be
heretical to bring this up inside
google it's hard it's hard i've done
many of these things before
um even the move that we made to have
desktop and mobile advertising be a
single
concept you know we call this enhanced
campaigns this was like 2013
2014 inside google yeah inside google
and this is just so hard to pull off
because
you have people that are wedded to one
way of doing things i was also the exec
that was in charge of
making all of the shopping property into
a paid property so i've gone through
these changes
but some changes are extra super hard
yep okay i i do want to um
hear a little bit more about your
personal story and
uh i'm especially intrigued how the guy
who runs ads and commerce at google all
of a sudden
decides that he you know after helping
build this business decides that he
wants to build
the exact opposite or something
heretical uh
let's do that after the break i feel
like that's a good cliffhanger for us
we'll hear from our sponsors and come
back right after this
and we're back here for the second half
of the big technology podcast we have a
great guest
srider ramaswamy who is here uh
ran the google ads business google
commerce business and is now building an
ad-free
privacy focused something you can tailor
search engine called neva so let's get
to your personal story here because
it you know it is common or increasingly
common to hear
um some people who disagree with the
direction that their companies have
taken to like write a book and go on
some media tour and become like a
dial a quote person in silicon valley
there are plenty of those people
when it comes to facebook but that's not
you uh you decided
that you know you having seen the way
that the ad business inside google was
functioning you were going to actually
go build the solution to some of the
problems you were seeing
so how did that happen does do you one
day wake up and say wait a second
all this ad stuff we've been building
and inside google has all the wrong
incentives i got to get out of here and
and find a way to solve this did you
bring it up internally
what happened so i've been at google for
close to 15 years and let's face it uh
you know achieved more success in my
career than i ever thought possible i'm
very grateful
to sort of an incredible number of
people uh you know i've talked about
some of them jeff huber
uh eric schmidt even uh you know bill
campbell who all spent more time and
gave me more opportunities
than i certainly i thought i deserved at
the time
and uh so it was a great career but
coming up on 15 years at google there
was a part of me that just wanted out i
was just like
it's a very busy very stressful job i
just wanted to
start over i like small teams
i like creating things uh you know i'm
i'm a reform i'm an academic i used to
work at bell labs out on the
east coast to me principles are
important i did not like where the ads
ecosystem
had brought us um you know
where you know big companies were
tracking everything that we were doing
doing remarketing ads there's like a
relentlessness
about how they work that i did not i
i did not like so i knew i didn't want
to work on ads as i was getting to the
end of my career
um but neva really came after i left
um and then lots of conversations with
my co-founder vivek about what it is
that we wanted to do
and we came to the conclusion that we
loved the problem
but we wanted a very different way of
thinking about it
so you know neva the search engine
is a back to basics look in so many
different levels
at this problem of search we are like
search is a very deeply personal
utility it's something that you and i do
a dozen times a day without thinking
about it
it drives everything from our need for
information um
to stuff that we want to know that's
going on outside in
in the world to sort of our deepest
fears
um and so we wanted to create truly a
product that served you as a customer
that's when the subscription business
model came about
and this disavowing of ads is sort of
more a reaction to what i saw as a lot
of companies
essentially saying they wanted no limits
whatsoever
the number of products that they created
are the ways in which they decided they
needed to make money
so a lot of the you're completely ads
free
um we will not show affiliate links we
will never sell your data
or a are an exercise in self-restraint
we are like we can create a great
company that focuses on creating a
single product
that's going to work great for you i'm
not an anti-ads person i think
ads as a supporter of monetization
especially is a fine concept
when you're talking about a search
engine that literally puts ads before
you can get to the results that you want
um we just don't think that that's a
model that works well in the long term
and that's sort of how newa was informed
and again i have nothing against the
people that
you know either the company or the
people that i have worked with
but i do think when it comes to really
important problems like
search it's fine for there to be
alternate views and it's also fine for
someone like me
to change my mind about this kind of a
model
and say you know there is a better
better model there is a better way to do
innovation
there is a better way to create value
for a lot of people
no doubt and no penalties here big
technology podcast
uh we like to hear alternative views for
sure
in terms of your personal journey though
um you know we talked a little bit about
how ads have started to fill up
more and more of the google page this
happened under
you know the group what you were running
so what was the moment that was there a
moment did you
was it uh did it happen slowly where you
started to say maybe this isn't the
right way to do search or did it
kind of happen all at once
you know my own personal journey to neva
happened over several phases as you
correctly point out and almost certainly
i'm not disavowing that part
yeah i was the exec in charge of many
um of the increases in ad load
there was an expectation of a certain
amount of growth there were a set of
techniques that were available
for how you increased growth you're
always very thoughtful about the
trade-offs
implied by growth and
and there came a certain point in time
that when it came to the overall ad
ecosystem
i said i didn't want to be working on
that anymore i'm an accidental ads
person
um i had nothing to do with ads before i
joined google i joked to people
my first boss found the word database in
my resume in sent me to work on the ad
system that was like the reason why i
worked on ads for 15 years
um and so i'm like hey i'm a computer
scientist i'm a tinkerer i just want out
i'm going to start over
um but this idea of neva sorta came
later we were like we love the problem
with a different model it can be a
powerful differentiator and along the
way i actually learned more and more
what's the power of a subscription
business um i started the subscription
business initially as
this is the best way to provide
alignment between you the customer
and ask the provider but then you learn
all of these other qualities that
they bring everything from 100 of your
team is focused on creating the product
if you look at the math
of how google works a vanishing fraction
of people work on google
search and you think like how can that
be
but that's the reality the size of the
google ads team
and the google ads product team dwarfs
that
of the search team the ads team is
bigger than the search team
100 wild and if you take the ads
business team
and the ads product and engineering
teams they're way
larger than the search team um and so
you have all of these like dynamics that
play
over the course of 10 years
and this is part of the reason why i
said hey a product in which 100
of the people in your team can focus on
the core value that you want to deliver
that's like oh that's a good deal um and
we are lucky you know first of all uh
i'm lucky to have vivek work with me
he's uh he ran youtube ads the one that
you mentioned earlier made
over six billion dollars a quarter he
ran the team
and his last name uh
yeah um and so he was the exec in charge
of uh of of of that team um
and uh we are also fortunate to have a
number of other
amazing computer scientists um and
thinkers that are part of our team
everybody from woody manber who used to
run search at google bill coren also ran
search he's
uh he's on our board um and
darren fisher who was one of the early
architects of chrome
so we have an amazing team um that are
all driven by this passion to create
a truly better search product what is it
what does it say about google that all
these people
sort of uh foundational to its business
and its search algorithm are now
uh have now gone rogue and her trying to
build the antidote to the problems
and so we think of us as a counterpoint
to ad driven search um it's not a
sort of you know it's not any kind of
duel just like nobody talks about
this it's a duel in some in some ways
for sure
um we think there's plenty of space for
both the markets
to exist sorry the market is large i
mean what's your specific market well
you said it's 150 billion
150 billion dollars in ads alone
and then if you add a subscription maybe
you get a chunk of that
capture and it's driving trillions of
dollars of commerce underneath
yeah now yeah and i know you say
it's not a duel but what goes through
your head before you say hey okay we're
gonna
we're gonna go do this uh you know
obviously people are gonna look at it as
competitive to your old employer did you
worry about relationships there or
um you know how it might be received and
what has the
feedback been from your former
colleagues
you know i obviously do worry about it i
have a lot of close relationships with
a lot of people at google
um and i would roughly say that feedback
falls into two buckets one set of people
that go like yeah we understand why
you're doing this and why you didn't
think you could do this within google
and a different set that kind of goes um
you know
we wish you really you had done this
within google because if
anyone could have changed what google
was it should have been you
um you know both are reasonable points
of view and there are some people
that you know kind of don't just want to
deal with it this is all too much
for them and i respect those
points of view but at some level
one has to be driven by what one sees is
uh you know is the right long-term
outcome i personally do not
think of ad supported free products
as being good for consumers
good for our country in the long term
because it is very hard for them to stay
true to what you and i
want as users and as customers of these
you know of these products that conflict
of interest
is just is just really really
unavoidable
and the fact of the matter uh alex
is that while at one level the products
are free all the benefits of scale for
products like this
they go to the creator of the product
they don't come to you and me
you know when it comes to neva for
example i talk about charging a
subscription of like
five to ten dollars at most per month um
okay and as we gain scale
i expect that product to actually get
cheaper over time you know what when you
start with a free product
the product is does not get any freer
for you all the benefits of scale go to
the creator
of the product so in many ways i
actually see these
um as not even working with like the
same principles of capitalism that's
worked so well for us
as a country and honestly as a globe for
the last 100 200 years
um and so we think a back to basics of
you're the customer you pay for the
product in the long term is going to
give us
better products than free products that
um
basically they all charge the advertiser
um
and you know like who then turns and
gives you and me a higher price
it's that advertising they're the
retailer they're the merchant um
and in e-commerce by the way it's kind
of known that
um a marketplace can squeeze out between
15 to 20 percent of
gmv which is the ad tax
it's an enormous amount of money you and
i will pay it
the gross merchandise value if you run a
marketplace
yeah um and you're you know you have
like a billion dollars of revenue
of like you're selling goods uh uh worth
a billion dollars
um you can extract between 15 and 20 of
that
as an ads tax just by showing ads on top
of that marketplace
but it comes from the users the
customers of that marketplace you and me
so this whole fallacy that ad supported
products
um are good for the world because they
give everything else to our
you know to us for free it's just what
that is
it is a fallacy you and i are paying
just indirectly
and not knowingly yep um
now one of the things that's been left
unsaid through this whole conversation
is uh i guess we talked a little bit
about how
subscription has replaced free or bitten
into freeze market
market power in the beginning um talk
about things like netflix and
amazon prime um the
the interesting thing about search ads
is
um they were designed to be these
elegant least invasive type of ads and i
know we talked a little bit about how
like we're talking in our
health problems but generally instead of
having to follow you behaviorally
through the internet
and look at every search you you ever
every website you visit and build a
profile of you and say this person is
you know someone in the market for a car
or diet pills or whatever
with search you just type in your intent
you don't really need to be tracked
and the ads are something that the
advertiser goes in and tries to match to
your interest the stuff you type in in
the keyword and bam there's a match and
they don't really have to know who you
are in fact a lot of people would say
that google search ads are the least
invasive and least tracking
of all ads online so yeah why don't you
see on that a little bit and talk about
whether you think that that's off base
uh because out of all the online ads to
solve
all the problems with online ads to
solve like the tracking and stuff like
that
doesn't seem to be the first issue
although we have touched on the fact
that it can bias
search in some ways or give you less
control
yeah i mean first of all there's no
limit
to how many ads can be shown to you by
the way it is perfectly
legal under current interpretations of
antitrust
for the entirety of a search result page
to only have ads
it's it's it's perfectly legit and
what used to be three percent of the
search result page being covered by ads
10 plus years ago
now gets closer to like 90 plus percent
on
some queries um and
the fact that so much of your attention
is taken by these ads and you have to
make a conscious effort to get past them
is a subtle and indirect tax you've read
about things like dark patterns
all of us are more susceptible to having
our choices influenced then honestly any
of us wants to admit
um and so just present to you
how a choice is presented to you um has
a huge influence and so the fact that
you have to go through reams and dreams
of these
affects you even if you think it doesn't
affect you i tell people i am
i eat what i keep on the surface on my
kitchen
i think i'm full of self-control but
honestly i just eat what's out there
uh like over the long term so i think
that is that effect
another thing to keep in mind is that um
tracking keeping track of conversions
wherever they happen
on the internet having all of the data
come back to a google come back to a
facebook
is the core part of ads technology um
and it is then very difficult to then
say
that this information is not going to be
used to serve ads in
other places so again to give you a
concrete example
your searches can be used to show you
ads on youtube
they can be used to show you ads on
gmail
um and and so there is really no limit
to how information gets used um and this
is part of the reason why we are so
adamant about having these core
principles for neva your data is yours
we are not going to profit off of the
data
other than in creating the service that
works for you
um so these these hard line principles
really matter because over the long term
this need for constant expansion drives
every system
astray yeah and there was this move that
google made right there used to be a
firewall between
what you searched in the search engine
and the search ads you you were shown
and then the rest of the business gmail
and the display stuff
and youtube and that eventually was
broken down
how did that happen it is a very long
and very complicated topic
but uh give us the cliff notes uh the
cliff notes is roughly that whenever you
were signed in
across different google properties it
was always the
uh it was always okay for that
information to get moved around
to show you ads that was always part of
the
equation there were boundaries that
were kept between what happened outside
google and what happened inside google
but information always flowed into
google via the various conversion
tracking pixels that
um that there were okay interesting so
that stuff was always
connected last thing that i think we
should talk about given
the current climate is the fact that um
google is under some anti-trust scrutiny
right now
because of the way that it's iced out
other businesses like yours
the number one thing that the department
of justice is
looking at google right now is the way
that it's uh
found ways to be the default search
engine uh you know across
a number of properties of course it's
built its way into that with stuff like
chrome but it's paying apple
billions of dollars a year to be the
default uh
in and and on the iphone and ios
when you search it's going to be google
search and that's because google's
paying apple
to be in that position so
you were there uh and now you're on the
outside trying to compete for that space
again
so uh i'm curious is it
something that's um you know
intimidating to you to try to go up
against google now knowing
the tactics and do you think the current
anti-trust
moment is going to open a door for a
company like neva to actually
uh occupy some of that space that's been
traditionally held by
by google the default search engine uh
on ios for instance
yeah we think choices of choice is
important search is the gateway to
information
for tons and tons of people and to have
single companies be in charge of this
well you saw what happened in australia
for a company to essentially
threaten a sovereign nation uh to turn
off its water that's that was kind of my
uh you know my wall was going when
facebook said no more news
you're going to make us pay but google
google paid
no no but before that yeah where they
said oh we'll just like pull up shut it
off and google has shut stuff off in
countries before when they try to
regulate it
yeah yeah um and uh to me i think that
kind
of concentration of essential functions
is very
problematic and it's also very clear
the current interpretations of antitrust
law
which have uh you know to me i've been
this i've become a student of the topic
to me antitrust has as much to do with
politics as economics
and i think we have gone through a
period of 30 40 50 years
where we have applied um very narrow
economic principles to how to think
about anti-trust in ways that i don't
think are great for the country
um and the final point that i'll make
just as background on this
is that it is very hard even for large
companies
to understand that behavior that would
be
that would be condoned when they were a
small player um
is in fact illegal once you become a
monopoly companies like
especially people that have been in the
same company for 15 years at some level
are never going to get it
um and so this is part of what surprises
me about zero day
like always day zero it's like you know
what when you're a monopoly
with a two trillion dollar market cap
for you to pretend that it is day zero
um is a not the truth be positively
stupid
um right and so when it comes to you
know when it comes to google and search
yes i worry about just getting in front
of
users um you know we understand that we
have a lot more to build
whether it's in terms of personalization
or the 1000 features that people have
but i can tell you with a straight face
that there is also an amount of joy
that people get when they use neva that
feeling of relaxation oh wow i'm like
not getting stressed out by lots of
stuff
is also very real so i worry about
having the chance to get in front of you
to get in front of 100 other people like
you
and say like hey give us a chance if you
think it's worthwhile pay if not that's
also fine
to me that is the important part and the
doj case at least gets to the heart of
it
which is how does a monopoly not prevent
others from even being able to compete
it is that fair chance that i want for
newa
yeah i mean it is interesting we talked
about this a little bit on the land of
the giants series that i was just on
with recode
going into the google history but like
you know we asked is this company a
survivalist or is it a monopolist
because and oftentimes those uh two
sides
plural you talk about like these
companies feeling like you know it's
zero day or amazon always day one
facebook one percent done
every tech giant has their version of
this and they they have faced like
google
has faced challenges when it came to
like being default when
they were a website or then a toolbar
that relied entirely on microsoft to get
to people
but yeah that's terrifying for us to do
that today when chrome keeps popping up
warnings such as hey do you want to
change your default back
oh is that what happens because you okay
so so for listeners i
set up neva today and um
and the very interestingly part of the
the setup is
make neva your default search engine so
i did
and now i'm like typing into the address
bar searches uh
in in crow and chrome and they're going
they're popping up as nemo searches so
but the thing is google owns chrome
very very wisely they built a a browser
because i think they had a feeling that
this was going to become an important
place directly in the chrome quote
unquote which is
you know the stuff that's not the
browsing window on your browser which is
why they named it chrome
uh that's where the fun happens for
search uh so is that what happens now if
i
search uh for a while they're going to
send me a pop-up asking to
make the default google again that
pop-up shows up randomly yeah
um and you can't do anything about it
it's not your product it's not
underneath it's not our parents it's not
under our control yeah the fact of the
matter i mean
and you know it's just like then you
have discussions they say there are lots
of people that are trying to take over
search that are unscrupulous
and that's why we pop up the warning but
the but the thing about this attitude
is gosh are you also ensuring
that there can in fact be no legitimate
search providers anyway because they're
all going to be driven out by the same
pop-up
so it's a self-fulfilling kind of
situation so those are the things that i
um i worry about of essentially getting
our product
in front of people that are
quite willing to say i will try a
different experience
yeah so the doj is is uh taking on
google
in terms of its search deals i haven't
heard much about chrome and android
being well android i guess a little bit
you're being used to iced out other
search engines
where do you think this all leads
because eventually
you know i guess these hearings could go
on forever
uh the cases could go on forever but to
you as a business owner that could
really use a little bit of help in this
area
uh anticipate that it's ever going to
show up
can you just repeat the last few seconds
my phone rang accidentally
oh yeah sure um i wanted to know if you
as a business owner anticipate
uh any relief from governmental
institutions when it comes to
your desire to be to not end up having
stuff like this happen to you like with
chrome or even an android where google
is going to be the default there too
just the scrutiny helps i think it
heightens awareness that these are real
issues
um as i said i think it increases the
likelihood that we will get
a fair chance um and
i uh you know will sort of repeat my
basic viewpoint
that alternates are important
complementary products
actually strengthen the overall
ecosystem
and create more trust uh i think tech in
general has a big problem in that we are
sort of becoming like
uh take your pick uh the oil balance the
banks
of yesteryear i think it's important to
understand
that this kind of a day one complete at
all cost mentality
does not fly um when companies are as
dominant as they are
so i think all of this increased
attention scrutiny yes gives us a better
chance
do i expect an actual outcome uh in
these no
not not anytime soon but the scrutiny
helps it gives us that little bit of a
chance
yeah i felt that as i uh
as i signed up for neva um i was like
the fact that this scrutiny had been
going on of course i watched it closely
given my job
but having read about all this stuff it
immediately hit me
okay this is different and there's a
compelling reason to use it
or at least give it a shot yeah so i'm
on it
uh thanks for letting me you guys are on
a close beta now is that what's going on
or
vietnam um we uh we're closed meaning
you can't sign up for the product right
away but
we're actually hoping to be in ga in
a couple of months in the meanwhile you
can go to neva.com
and sign up for waitlist we are getting
folks onboarded onto the product
very quickly and yeah sometime in june
we hope to get to a point where anyone
that wants the product can
uh can can sign up for it uh check us
out
yeah ga general availability so in the
us
yeah anyone that wants it absolutely so
this stuff's coming well i
i think that what you're doing is
interesting i agree with you good to
have alternatives
and i'm really fascinated by especially
what you've brought up
in terms of being able to customize the
retailers that you see
in shopping results and then in
particular this idea that maybe you can
start to see the news
search with the filter that you know
people that you follow have
uh put on and see the news through their
viewpoint that's cool
are people that you don't agree with um
to me how you like you know
actually have that viewpoint is is a
skill that we seem to have lost as a
country
uh how to disagree without being
disagreeable so i think there's lots of
changes
yeah i like it all right so it's
neva.com if you go sign up maybe you get
in in a couple months
or maybe street art will let you win
sooner than that
tell them you heard about it on big
technology podcast
all right well thank you so much
sweetheart it's great having you on i
was really looking forward to this
conversation and it delivered so i
appreciate you joining
thank you alex great to chat we'll be in
touch awesome and thank you everybody
for listening thanks always to nick
gawatney for editing
uh the podcast we'll give him a little
bit of leeway on this one a couple days
early
so nate have had it and then thank you
to the folks at red circle for hosting
uh the podcast and selling ads if you
want to advertise uh
there should be a way for you to get in
touch with them if not just email me
bigtechnology
podcast gmail.com will get you the right
place
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agitator at the same time that's kind of
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quite enjoying it
and we'll have a conversation about
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future of all that
all right folks that's gonna do it for
us this week it's been a pleasure having
you as
always and we look forward to seeing you
next week take care
have a nice uh next couple of days sorry
folks i'm trying to still work through
this
sign off anyway we'll see you next time
it's been a pleasure as always