eyes on the U.S.

Has Google Peaked? Signs In Europe Of Blind Spots In Search Giant's Strategy

Even as it continues to report record earnings, certain trends remind us that even the smartest, most dominant tech companies eventually are brought down to size.

Google's offices in Brussels
Google's offices in Brussels
Benedikt Fuest

BERLIN - The European Union’s anti-monopoly watchdogs may have never received so many complaints against a single company as they have against Google. To be sure that the EU Commission’s investigations really rolling, anti-Google alliances like Fairsearch and Microsoft-backed lobby Icomp have sent in 20 separate official complaints, some of them 100 pages long.

That’s not all. There are also all the letters and complaints of smaller competitors in the advertising, digital mapping, travel and mobile apps sectors. Google has no shortage of enemies -- and some would seem to want nothing less than the company’s complete destruction.

The main complaint is always the same: Google is using its market power in Internet search to exert an unfair advantage over its competitors. And by allying with manufacturers like Apple and browsing providers like Mozilla it has, over the past decade, cemented that power.

Google opponents back up their claims with hard numbers. According to EU competition monitors, in Europe the company has an Internet search market share of over 90%, even greater than in the 86.3% in the United States.

This market dominance is now more than seven years old, and counting, and Microsoft's attempt to compete on search, with Bing, has barely made a dent.

(Last week, Google's quarterly earnings beat industry forecasts, on the strength of growth of its core advertising business)

Google critic and Microsoft consultant Ben Edelman, an Internet economist at Harvard University, says that two factors support Google‘s web dominance. On the one hand, the web favors big providers, and huge oligopolistic or monopolistic structures can quickly form that are difficult to combat with traditional means. Advertising dollars play to this of course, as customers will favor providers with the biggest reach.

On the other hand, Edelman says, you have cross-subsidization: "Search income can be used to develop free mapping services that give it added popularity.”

In the coming weeks, EU Commission competition head Joaquín Almunia intends to market-test a final package of Google compromise suggestions. He is seeking feedback from both market players and individual complainants. An unidentified source close to the case said that Google is offering to create more distinction in Internet searches between its own services and those of competitors, and offer links to other search engines.

Fast changes

But Edelmann doubts that would break Google’s dominance: "Users have become accustomed to the convenience of finding everything in one place," he says.

This month, German data protectors awarded Google the "Big Brother Award," and using the AT&T example called for the firm to be split into smaller companies.

But doing that would not be justified in terms of classic competition economy because Google’s market power -- unlike for example the monopoly of an electricity or telecommunications provider -- is neither permanent nor insurmountable. Internet business moves too fast, as the latest American figures show: in 2012 on its home market Google lost one and a half percentage points of Internet advertising market share, putting its share at 71%.

More important still: the searches that, thanks to advertising, bring the company big bucks are now going to others -- like online merchandiser Amazon, which now leads the shopping search business in the States.

"For Internet searches, user expectations are changing," says Stefan Weitz, manager of online services at Google’s biggest competitor Microsoft in Seattle. "The classic results window with little blue links is not enough anymore, users now expect context-sensitive results that take into account their location, preferences, everyday life."

With that however, according to Weitz, Google‘s classic revenue model– ads near links – is in danger. Interfaces are also changing. "Users don’t want to type in search terms any more, they want to ask questions and get meaningful answers instead of links."

Google is reacting to this trend: for example, in the past year it has taken to answering searches with the Knowledge Graph function, a summary of results along the right edge of the screen.

But Knowledge Graph and the classic search results in the form of links work either badly or not at all on mobile devices: the screens are too small, and web connections too slow. Very few users have the patience to follow up several links on a smart phone.

And thus the hour of the specialized provider has struck: smart-phone applications are direct competition for Google’s top keyword categories. To find a good place to eat, users in the U.S. already prefer services like Yelp and Foursquare, or to follow the recommendations of friends on Facebook. And they can find cheap flights with a favorite travel app like Kayak.

While searches via app are not recorded in search market statistics, their success can be seen indirectly. According to market researcher Comscore, in 2012 the market for Internet searches from classic PCs shrunk for the first time in 10 years by three percentage points.

"The mobile market is changing classic user habits," Weitz says. In the coming months he believes there will be a search revolution brought on by new interfaces and more intelligent algorithms.

Google will react to that too – but the history of the IT industry, from IBM to Microsoft, shows that no company has ever succeeded in dominating the market for longer than a decade.

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The Food Truck, A Sign That The White And Wealthy Are Moving In

In San Diego, California, a researcher tracked how in the city's low-income neighborhoods that have traditionally lacked dining options, when interesting eateries arrive the gentrification of white, affluent and college-educated people has begun.

Balboa Park Spring Fling Food Truck festival

San Diego Food Trucks via Facebook
Pascale Joassart-Marcelli

SAN DIEGO — Everybody, it seems, welcomes the arrival of new restaurants, cafés, food trucks and farmers markets.

What could be the downside of fresh veggies, homemade empanadas and a pop-up restaurant specializing in banh mis?

But when they appear in unexpected places – think inner-city areas populated by immigrants – they're often the first salvo in a broader effort to rebrand and remake the community. As a result, these neighborhoods can quickly become unaffordable and unrecognizable to longtime residents.

An appetite for gentrification

I live in San Diego, where I teach courses on urban and food geographies and conduct research on the relationship between food and ethnicity in urban contexts.

In recent years, I started to notice a pattern playing out in the city's low-income neighborhoods that have traditionally lacked food options. More ethnic restaurants, street vendors, community gardens and farmers markets were cropping up. These, in turn, spurred growing numbers of white, affluent and college-educated people to venture into areas they had long avoided.

This observation inspired me to write a book, titled The $16 Taco, about how food – including what's seen as "ethnic," "authentic" or "alternative" – often serves as a spearhead for gentrification.

Take City Heights, a large multi-ethnic San Diego neighborhood where successive waves of refugees from places as far away as Vietnam and Somalia have resettled. In 2016, a dusty vacant lot on the busiest boulevard was converted into an outdoor international marketplace called Fair@44. There, food vendors gather in semi-permanent stalls to sell pupusas, lechon (roasted pig), single-sourced cold-brewed coffee, cupcakes and tamarind raspado (crushed ice) to neighborhood residents, along with tourists and visitors from other parts of the city.

Informal street vendors are casualties.

A public-private partnership called the City Heights Community Development Corporation, together with several nonprofits, launched the initiative to increase "access to healthy and culturally appropriate food" and serve as "a business incubator for local micro-entrepreneurs," including immigrants and refugees who live in the neighborhood.

On paper, this all sounds great.

But just a few blocks outside the gates, informal street vendors – who have long sold goods such as fruit, tamales and ice cream to residents who can't easily access supermarkets – now face heightened harassment. They've become causalities in a citywide crackdown on sidewalk vending spurred by complaints from business owners and residents in more affluent areas.

This isn't just happening in San Diego. The same tensions have been playing out in rapidly gentrifying areas like Los Angeles' Boyle Heights neighborhood, Chicago's Pilsen neighborhood, New York's Queens borough and East Austin, Texas.

In all of these places, because "ethnic," "authentic" and "exotic" foods are seen as cultural assets, they've become magnets for development.

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

A call for food justice

Cities and neighborhoods have long sought to attract educated and affluent residents – people whom sociologist Richard Florida dubbed "the creative class." The thinking goes that these newcomers will spend their dollars and presumably contribute to economic growth and job creation.

Food, it seems, has become the perfect lure.

It's uncontroversial and has broad appeal. It taps into the American Dream and appeals to the multicultural values of many educated, wealthy foodies. Small food businesses, with their relatively low cost of entry, have been a cornerstone of ethnic entrepreneurship in American cities. And initiatives like farmers markets and street fairs don't require much in the way of public investment; instead, they rely on entrepreneurs and community-based organizations to do the heavy lifting.

In City Heights, the Community Development Corporation hosted its first annual City Heights Street Food Festival in 2019 to "get people together around table and food stalls to celebrate another year of community building." Other recent events have included African Restaurant Week, Dia de Los Muertos, New Year Lunar Festival, Soul Food Fest and Brazilian Carnival, all of which rely on food and drink to attract visitors and support local businesses.

Meanwhile, initiatives such as the New Roots Community Farm and the City Heights Farmers' Market have been launched by nonprofits with philanthropic support in the name of "food justice," with the goal of reducing racial disparities in access to healthy food and empowering residents – projects that are particularly appealing to highly educated people who value diversity and democracy.

Upending an existing foodscape

In media coverage of changing foodscapes in low-income neighborhoods like City Heights, you'll rarely find any complaints.

San Diego Magazine's neighborhood guide for City Heights, for example, emphasizes its "claim to authentic international eats, along with live music venues, craft beer, coffee, and outdoor fun." It recommends several ethnic restaurants and warns readers not to be fooled by appearances.

Longtime residents find themselves forced to compete against the "urban food machine"

But that doesn't mean objections don't exist.

Many longtime residents and small-business owners – mostly people of color and immigrants – have, for decades, lived, worked and struggled to feed their families in these neighborhoods. To do so, they've run convenience stores, opened ethnic restaurants, sold food in parks and alleys and created spaces to grow their own food.

All represent strategies to meet community needs in a place mostly ignored by mainstream retailers.

So what happens when new competitors come to town?

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

Starting at a disadvantage

As I document in my book, these ethnic food businesses, because of a lack of financial and technical support, often struggle to compete with new enterprises that feature fresh façades, celebrity chefs, flashy marketing, bogus claims of authenticity and disproportionate media attention. Furthermore, following the arrival of more-affluent residents, existing ones find it increasingly difficult to stay.

My analysis of real estate ads for properties listed in City Heights and other gentrifying San Diego neighborhoods found that access to restaurants, cafés, farmers markets and outdoor dining is a common selling point. The listings I studied from 2019 often enticed potential buyers with lines like "shop at the local farmers' market," "join food truck festivals" and "participate in community food drives!"

San Diego Magazine's home buyer guide for the same year identified City Heights as an "up-and-coming neighborhood," attributing its appeal to its diverse population and eclectic "culinary landscape," including several restaurants and Fair@44.

When I see that City Heights' home prices rose 58% over the past three years, I'm not surprised.

Going up against the urban food machine

Longtime residents find themselves forced to compete against what I call the "urban food machine," a play on sociologist Harvey Molotch's "urban growth machine" – a term he coined more than 50 years ago to explain how cities were being shaped by a loose coalition of powerful elites who sought to profit off urban growth.

I argue that investors and developers use food as a tool for achieving the same ends.

When their work is done, what's left is a rather insipid and tasteless neighborhood, where foodscapes become more of a marketable mishmash of cultures than an ethnic enclave that's evolved organically to meet the needs of residents. The distinctions of time and place start to blur: An "ethnic food district" in San Diego looks no different than one in Chicago or Austin.

Meanwhile, the routines and rhythms of everyday life have changed so much that longtime residents no longer feel like they belong. Their stories and culture reduced to a selling point, they're forced to either recede to the shadows or leave altogether.

It's hard to see how that's a form of inclusion or empowerment.The Conversation


Pascale Joassart-Marcelli is a Professor of Geography and Director, Urban Studies and Food Studies Programs at San Diego State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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