1 hr 4 min

Walled Gardens: John Menard, Jr. and Jeff Green Zero Sum Empire

    • Society & Culture

It was a lot of work to get to 20 episodes. Thanks to everyone who’s listening. We are excited to start the next season of shows in the new year and have a lot of great ideas for improvements.

Reflecting back on this episode, I realize that we talked a lot about a particular kind of barrier. Joe introduced us to the technical choice that the hardware store chain Menard’s made to include one-way turnstiles at all of their entryways. The effect of the turnstiles is to trap people in the store: you have to traverse the entire length of the store if you want to exit. Google and Facebook (referred to in the ad industry as “walled gardens”) collect data about you, and then use that data to advertise to you on their own platforms. They maintain a practical duopoly on online advertising because they don’t share data with other advertising companies. They “wall off” your data because it’s the one thing of value that they produce. To capitalize on the data they’ve collected, they need to “keep you in the store” as long as possible, which means they need to keep you using services they own. Because there is minimal censorship of the internet in the US, it’s harder for Google and Facebook to erect digital turnstiles to contain users than it is for, say, the Chinese government. China has developed the “Great Firewall of China” to block and censor information that the government believes runs contrary to its interests. What China has discovered, however, is that it’s far easier to proactively erect a Menard’s-style “digital turnstile” than it is to play whack-a-mole by reactively censoring content. So, that’s what they’re doing. Baidu, the “Google of China,” now overwhelmingly serves up search results linking to sites that Baidu owns. Once you go through the Baidu turnstile by using their search engine, you have to scroll very far down the list of search results to find the exit. All of the top results just redirect to Baidu content. It should go without saying that Baidu is compliant with (and at least partially run by) the Chinese government censors.

In the News: We return to billionaires of episodes past to talk about where they’ve been showing up in the news.

John Menard, Jr.: 8/10 on the D.K.M.A.L.I. (15:00)
Owner and Founder of Menard’s, a chain of home improvement stores.

Jeff Green: 5/10 on the D.K.M.A.L.I. (37:00)
Owner and Founder of The Trade Desk, an internet advertising company.

Links:
John Menard Jr.
https://www.milwaukeemag.com/bigmoney-john-menard/
https://urbanmilwaukee.com/2013/06/20/murphys-law-the-strange-life-of-john-menard/

Jeff Green and The Trade Desk:
https://youtu.be/SaVJkQVhntA (Part of an infuriating series of videos called “In Human Terms” that Green posted to Youtube. All of them are infuriating.)
https://www.cnbc.com/2019/05/31/the-trade-desk-is-growing-in-china-and-wall-street-loves-it.html
https://qz.com/1530831/an-obituary-for-baidu-argues-chinas-vast-internet-has-no-search-engine/

It was a lot of work to get to 20 episodes. Thanks to everyone who’s listening. We are excited to start the next season of shows in the new year and have a lot of great ideas for improvements.

Reflecting back on this episode, I realize that we talked a lot about a particular kind of barrier. Joe introduced us to the technical choice that the hardware store chain Menard’s made to include one-way turnstiles at all of their entryways. The effect of the turnstiles is to trap people in the store: you have to traverse the entire length of the store if you want to exit. Google and Facebook (referred to in the ad industry as “walled gardens”) collect data about you, and then use that data to advertise to you on their own platforms. They maintain a practical duopoly on online advertising because they don’t share data with other advertising companies. They “wall off” your data because it’s the one thing of value that they produce. To capitalize on the data they’ve collected, they need to “keep you in the store” as long as possible, which means they need to keep you using services they own. Because there is minimal censorship of the internet in the US, it’s harder for Google and Facebook to erect digital turnstiles to contain users than it is for, say, the Chinese government. China has developed the “Great Firewall of China” to block and censor information that the government believes runs contrary to its interests. What China has discovered, however, is that it’s far easier to proactively erect a Menard’s-style “digital turnstile” than it is to play whack-a-mole by reactively censoring content. So, that’s what they’re doing. Baidu, the “Google of China,” now overwhelmingly serves up search results linking to sites that Baidu owns. Once you go through the Baidu turnstile by using their search engine, you have to scroll very far down the list of search results to find the exit. All of the top results just redirect to Baidu content. It should go without saying that Baidu is compliant with (and at least partially run by) the Chinese government censors.

In the News: We return to billionaires of episodes past to talk about where they’ve been showing up in the news.

John Menard, Jr.: 8/10 on the D.K.M.A.L.I. (15:00)
Owner and Founder of Menard’s, a chain of home improvement stores.

Jeff Green: 5/10 on the D.K.M.A.L.I. (37:00)
Owner and Founder of The Trade Desk, an internet advertising company.

Links:
John Menard Jr.
https://www.milwaukeemag.com/bigmoney-john-menard/
https://urbanmilwaukee.com/2013/06/20/murphys-law-the-strange-life-of-john-menard/

Jeff Green and The Trade Desk:
https://youtu.be/SaVJkQVhntA (Part of an infuriating series of videos called “In Human Terms” that Green posted to Youtube. All of them are infuriating.)
https://www.cnbc.com/2019/05/31/the-trade-desk-is-growing-in-china-and-wall-street-loves-it.html
https://qz.com/1530831/an-obituary-for-baidu-argues-chinas-vast-internet-has-no-search-engine/

1 hr 4 min

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