Ads and the Internet

Would you like some ads with that internet?

Ads: The Original Sin of the Internet?

A common talking point about what went wrong with the internet is that it became an ads-based model. It is also a major talking point for web3. On one of Tim Ferris’ recent podcasts, Andrew Chen said the following: “The original sin of the internet is that we have an advertising-based system, right?”. He then continues “really because we decided to go with banner ads instead of having people pay each other online” (sidenote: I’ve slightly edited the quote for clarity. Also, this was an awesome interview and recommend everyone go listen to it).

Honestly, I don’t hate ads and I think I’d rather have personalized ads than generic ones. If you want to bug me with an ad, at least make it interesting to my life. Hard to do this without knowing a little bit about me. On the flip side, would more privacy and less personal tracking be better? Certainly. Will I and many others pay for this privacy? Seemingly no, and it is unclear if this will change in the future, but if we did move away from ads, how much would this cost? To put some numbers behind this change, we can look at Google search as if it were a subscription business.

Subscription Based Google Search

To figure out how much a subscription-based service would cost on Google, I’ll assume that they want to generate the same amount of revenue from subscriptions as they currently do from ads. To do this, I used revenue from their latest quarter. In Q3, Google made $37,926M from their search business. Google doesn’t share their search data, but it is estimated that there are 5.6B searches a day with the average person performing 3 – 4 searches, resulting in approximately 1.6B daily active users. Using these figures, I estimate that Google is making $415M a day on search or about a quarter per day per user. For Google to generate the same amount as it does from ads, it would need to charge each user $8 per month. There is an ad-free and private search engine called Neeva that charges $5 a month, so these numbers feel reasonable for a best-in-class search engine such as Google. 

Business Model Switch

So, theoretically, we can have privacy-based search from Google for $8 a month. Maybe this can be offered to certain individuals who are willing to pay, and others have the ad model (e.g., Spotify model). I mean, $8 doesn’t feel like a lot, so why hasn’t Google done this? Most likely they think they can make more off of ads or they don’t believe users are truly bothered by the ads. But maybe the point against ads is that people need to be protected because ads are predatory, so they should just pay and have no choice? Idk 🤷‍♂️. I assume the ads don’t bother others that much or they would switch to another browser, such as Brave or Neeva – if this is the first you’re hearing of these options, my prior assumption about not minding the ads feels safe. But Google isn’t seeing less searches, so seemingly most don’t care. Also, with every search, results get better, and Google continually updates their search algorithm to improve it. On the flipside, paying for services isn’t distributed equally. Right now, everyone has the same search for the same ad service. Switching the internet model to subscription hurts those without means the most. What other services must also be paid for with subscriptions in replace of ads? Is Gmail and email storage still free? Again, idk it just feels like a pay for everything model adds up quick. I think that people don’t mind trading free services for ads as much as some would claim. It is kind of awesome that everyone with an internet connection gets access to the best search engine ever developed.

I don’t mind ads. They’ve gotten much better overtime and less intrusive. Would I prefer not to be tracked everywhere I go across the internet? For sure. Do I have options to do just this, but stick with my current behavior? I do and most of you do too.

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