The Faux Underdogs of the Digital Economy

As helpfully pointed out by Mark Ware (see comments) Springer actually has nothing to do with Axel Springer AG. So there’s two points here (the faux underdogs and the profits in scholarly publishing) which aren’t really connected in the way that I thought they were: 

I’ve just been reading a provocative article by Mathias Döpfner, CEO of Axel Springer AG, in which he speaks of the deep fear that Google inspires in him:

Google doesn’t need us. But we need Google. We are afraid of Google. I must state this very clearly and frankly, because few of my colleagues dare do so publicly. And as the biggest among the small, perhaps it is also up to us to be the first to speak out in this debate. You yourself speak of the new power of the creators, owners, and users.

In the long term I’m not so sure about the users. Power is soon followed by powerlessness. And this is precisely the reason why we now need to have this discussion in the interests of the long-term integrity of the digital economy’s ecosystem. This applies to competition – not only economic, but also political. As the situation stands, your company will play a leading role in the various areas of our professional and private lives – in the house, in the car, in healthcare, in robotronics. This is a huge opportunity and a no less serious threat. I am afraid that it is simply not enough to state, as you do, that you want to make the world a “better place”.

Google lists its own products, from e-commerce to pages from its own Google+ network, higher than those of its competitors, even if these are sometimes of less value for consumers and should not be displayed in accordance with the Google algorithm. It is not even clearly pointed out to the user that these search results are the result of self-advertising. Even when a Google service has fewer visitors than that of a competitor, it appears higher up the page until it eventually also receives more visitors.

You know very well that this would result in long-term discrimination against, and weakening of, any competition, meaning that Google would be able to develop its superior market position still further. And that this would further weaken the European digital economy in particular

I find myself nodding along, being drawn into the logic of his argument as his concerns resonate with my own. But then my critical faculties reassert themselves and I remember that Springer science publishers (i.e. the branch of Axel Springer likely to be encountered by those who are academics and do not live in Germany) made an operating profit of 33.9% annually in 2010 (up from 2009). This went up to 35.2% in 2012. While the environment of the broader media group is certainly different to that inhabited by the science publishing group, it nonetheless shows why we should resist the efforts of those like Döpfner to cast their corporations as underdogs. This doesn’t mean we shouldn’t be critical of Google. But it does mean we should resist allowing ourselves to be drawn into dichotomising this complex situation in a way that serves the interests of not particularly likeable corporations. 

This thought has been on my mind recently because I started to wonder whether I’ve been taken in by Waterstones. I feel a genuine affection for Waterstones. But the shop is a cypher for book shops as such for me and I’m aware of this as a deliberate aim of their corporate branding. Are they an underdog? It’s easy to slip into feeling, if not thinking, this when considering their position in relation to Amazon. But surely the same points apply as with Springer. It’s just that I like Waterstones a lot more.

2 responses to “The Faux Underdogs of the Digital Economy”

  1. Springer Science & Business and Alex Springer have no connection, apart from sharing a name. Springer SB is owned by two private equity funds.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.