Q: In your book Life After Google, you discuss some of the tech giants' flawed business models today may not allow them to survive. Can you elaborate on that?
A: I think companies like Google and Facebook that collect almost all their revenues from advertising and don't have any real liabilities to their customers - no real responsibilities to their customers - they aggregate viewers and sell advertisements, ads that we all know are minuses; people don't want to see their ads, particularily on their smartphones where pop-up ads of various kinds comprise 36% of bandwidth costs for your smartphone and you only intentionally click on the ads 0.03% of the time. It's a failing model and it's worth recognizing that all the Chinese companies that are really competing with our companies (with three times the population) get 10% or something of their revenues from advertising. They really have figured out how to collect money from customers. That's their advantage and we better be alert to this.
Q: It sounds like these companies are starting to become dated...
A: Their free model is debauching them. Free is not capitalism. They really don't know how to deal with customers and whenever they have to make a decision, they decide in the end, "ah, it's easier just to give it away for free and collect more data and sell it to advertisers." This model is reaching the end of the line and we're moving into life after Google!
~ George Gilder, Stansberry Research
interview, 5:20 mark, October 11, 2019
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