When it comes to blockchain, experts often do not have an average assessment of current market events: they see either a boom or a decline. Few discuss the aftermath of using blockchain technology and its impact on large companies. However, it is important, because innovation is tied up with leading tech giants.
Time has come for unparalleled technological dominance. In the 2010s, corporations such as Google, Amazon, and Facebook, divided the digital world. Now, they control many areas of everyday life. These companies own the data of billions of users and everything surrounding them. They scale up the network effect and prevent competition.
Suppose that as early as in the 2020s, alternative products based on the blockchain will be able to seriously compete with big tech, taking away a part of their market?
Alphabet Inc. is one of the largest holdings with 14 divisions and 93 web products that play an important part in online life. We will not consider all areas of activity, but rather focus on the main business model — advertising.
The main division of the holding is the leading search engine Google. According to the StatCounter rating, in 2019, it accounted for 92.63% of the global search engine market. This dominance contributed to the all-time growth of the corporation.
In Q3 2019, the revenue of Alphabet Inc. amounted to $40.5 billion, of which Google alone earned $33.9 billion on advertising.
YouTube is the largest video hosting and the second most visited website in the world (according to Alexa top 500). Back in 2006, Google acquired this platform for $1.65 billion. Current information on the service’s revenue is not published. However, eMarketer researchers calculated that in 2018 it amounted to about $9.5 billion.
Credit Suisse analyst noted that in 2015, YouTube accounted for about 8.11% of Google’s revenue, compared with 2.16% in 2010. He predicts an increase in this indicator to 12.97% in 2020.
The AdSense network is another part of Google’s superiority in the advertising business. AdSense allows websites to monetise content through the contextual advertising platform. Google collects from 32% to 49% of advertisers’ payments and transfers the remainder to partner sites with content.
The report for the Q3 2019 indicated that Google’s total revenue ($33.9 billion) amounted to $28.6 billion for advertising on its own websites and $5.3 billion for posting on partner sites.
Larry Page and Sergey Brin built their business on the principle of openness. For 18 years, their unofficial slogan was “Don’t be evil” (until May 2018), which is why Google was called the corporation of good. The company has always sought to openly share information with the world. Now Google’s dominance is due to the Big data network effect and artificial intelligence, as well as its combination with the power of habit.
In the era of blockchain and decentralization, Google does not seem so open anymore, because all of its web products are centralized. Many IT professionals are worried about what the tech giants are turning into. They believe that it is time for users to switch to the services that are truly open and transparent, and not just position themselves as such.
A blockchain-based search engine can solve the problem of incorrect incentives. After research showed Google’s degree of control over their private life, frightened users switched to DuckDuckGo, a privacy-oriented search engine. In 2019, its share in the US market grew from 0.96% in January to 1.33% in December, and in the European market — from 0.36% to 0.4% over the same period.
DuckDuckGo only occasionally shows ads on the subject of a search query. Its advantage is the absence of access to personal data. The same property prevents it from becoming useful to people who do not worry about privacy. They continue to trust their data with Google’s artificial intelligence, and in return, it understands their tastes better and predicts their desires.
If someone had created a search engine on the blockchain, then theoretically they could have made serious competition to the monopolist. Through identification tokens, such a system would use the data and preferences of users without even owning and controlling them. Due to this, it would show users more accurate and personalized search results.
In addition, in the case of including ads, users could earn a tokenized commission for viewing ads. This has already been implemented in the Brave blockchain browser. Companies that own DuckDuckGo and Brave should definitely join together to stagger Google’s position.
Competing with YouTube is just as difficult as with search engine No. 1. There is hope for the help of content creators who level up the platform with new video materials thus determining its value.
On average, YouTube bloggers get $1–2 per thousand views of their videos. The bid is highly dependent on advertisers, topics, and locations. To earn $1000, one needs to get about a million views. YouTube’s unpopular video content creators generate too little profit.
Since YouTube is overflown with content, and earnings are limited, it is logical that bloggers began to look for new solutions in this market. A video platform based on the blockchain could satisfy their demand: with transparent rates, it is possible to predict earnings, and with weak competition, getting attention more quickly is also feasible.
Such a web product already exists — Dtube. It is built on the Steem blockchain and IPFS network. This decentralized video platform has been developing for 2 years, but there is still a long way to create a real threat to the monopolist of video hosting. With support from the Steemit community and its own advantages, Dtube has a chance to become No. 2.
Advertising destroyed the Internet and journalism. When the world switched from subscription to ad impression, the content quality began to decline. Today, the number of page views is essential. This system has created a world where artificial attention is rewarded. We realised that content worsened when provocative headlines and catchy thumbnails became a priority.
A blockchain-based publishing model can solve this problem. The Medium social journalism platform illustrates this point well, giving users the opportunity to speak out and send donations to authors for articles they like. Although this may not be too profitable for authors, a similar model can stimulate blogs and publications with truly valuable content.
There are companies trying to do this, both using the blockchain and without it. This idea is difficult to implement because most do not understand the strength or risk of information distribution, as well as its value.
Copywriters just love to write (and earn at least something from it), and readers love useful content. In contextual advertising, advertisers are always present in these respects. Probably, in order to surpass the success of AdSense, the model must be simplified from “writer↔advertiser↔reader” to “writer↔reader.” Here it is impossible to do without blockchain and tokenization.