[itsame]

To play along with your analogy: patrickaljord's point is that if sales decreases, then you get less commission. Decreased sales in this case is decreased number of ad viewers that comes as a result of decreased number of Google users.

So yes, ad publishers may not care about Google users in and of themselves, but they care about volume, and Google making its users happy and engaged keeps that volume high. By transitivity, ad publishers should (theoretically or indirectly) care about whether Google treats its users well as it would have some positive correlation with their viewership volume.

You're trying to draw a false dichotomy between the two -- they are not mutually exclusive goals. Just because Google is building for the users doesn't mean it's not building for the ad publishers. By building and improving their products for the users, they are increasing the stickiness and value of their users for the ad publishers.

If you had to choose between advertising at a location where people just breeze right through, and advertising at a location where people stick around to browse the goods, which location would you rather pick? Obviously the latter where people stick around, as it's more likely that they'll notice your advertisement. Google improving their products for the users makes it more likely that their users will stick around to notice the ads.

[crazychrome]

Your argument is based on the assumption that Google occupies the unique position in the user->view->ad-click chain, your wording "at a location where people just breeze right through". let's deal with it for a moment.

Assume it's true, then Google 1) will definitely abuse the position, and 2) for Google, the top priority is about how to maintain the unique position, which has less to do with users' experience/privacy/(put anything here), but more to do with the browser + search engine paradigm. In fact, with the emerging of Smartphone + Walled gardened Apps paradigm, it's about the time to predict the decline of Adwords.

Say it's false... well, so is your argument.

[itsame]

Not sure how you concluded that that was my assumption. To have a "unique position" is completely irrelevant. The point is that Google users are sticky and valuable because Google keeps them engaged, and knows more about the users, and so the ads can be more targeted and thus more relevant to the user. In other words, ads shown to Google users by way of Google's ad service are (theoretically) more likely to be acted upon. That the users stick around using the Google services for long enough to potentially see the ads is icing on the cake, and Google's services being as ubiquitous as they are doesn't hurt either. Whether there exist other services in the same position as Google's has no bearing on the intrinsic value of the user base.

On the other hand, your argument that Schmidt's post is "b.s." hinges on the assumption that catering to users is a completely separate business model distinct from catering to their direct revenue sources (e.g. ad publishers). It's not.

[crazychrome]

So according to your logic, Microsoft in the 90s was not in the "unique position"? All your points about user engagements, keeping them around, intrinsic value, applied to Microsoft perfectly.

The fact is, Google occupies a unique position under the framework of browser + search engine. Their inability to expand meaningfully to other web segments (except gmail) proves:

1) they are idiots. (highly unlikely) OR

2) the theory of "user engagement" does NOT work in case of Google Inc. Therefore, mining of users' data serves purely for the business interest, it has no value added to users. And yes, Google Search's model is fundamentally different than ugc-centric services (e.g. fb).