Inside Amazon's, Facebook's and Google's self-serving 'philanthropy'
- 27 August, 2016 21:00
Technology companies tend to couch their products not as businesses for profit, but as gifts to humanity.
For the biggest tech giants, faux philanthropy masks an obvious customer acquisition strategy.
Making the world a more literate place
Amazon says a billion people in the world have no access to books. That's why the company pledged this week to donate more Kindle e-readers, Fire tablets and Kindle eBooks to developing countries in an effort to make the world a better place by expanding readership and promoting literacy.
Amazon is collaborating with a nonprofit company called Worldreader, which has already engaged with visitors to Kenya's 61 public libraries.
The Kenya project demonstrates how the economics work in Amazon's favor. Most costs were borne by the Stavros Niarchos Foundation and the Bill & Melinda Gates Foundation. Amazon donated enough Kindle Paperwhite eBook readers to supply 61 libraries, plus eBooks, which are free or cheap. That modest donation enabled some 500,000 future eBook customers to be exposed to the Amazon and Kindle brands, and the proprietary Kindle format instead of alternative formats.
What's interesting about Amazon's partnership with Worldreader is that the nonprofit has been spreading literacy through eBook readers for six years. Worldreader is "platform agnostic" and started out by promoting primarily open eBook formats.
Ideally, Worldreader helps educate the world's children, who can grow up to be literate adults and buy their own books. Amazon's donations make sure that millions of these new readers get used to Kindles and the Kindle format.
The customer-acquisition-as-good-works approach is right out of the Facebook and Google playbook.
Making the world a more connected place
Most people in the world do not have Internet access.
Facebook wants to make India a better place by bringing free Wi-Fi to Indian train stations and a few villages.
The chairman of India's RailTel told the Economic Times newspaper that Facebook wants to install Wi-Fi at a large number of stations, plus drive data services to Indians living within a six-mile radius from those stations. RailTel is a telecom with the primary mission of building and running IT for India's railroad system.
Google last year announced the installation of Wi-Fi hotspots at Indian stations. Already, 1.5 million people are now using free Google Wi-Fi at 19 stations.
It turns out that, while Google is working on covering 400 of the biggest stations in India with Wi-Fi, Facebook wants to cover smaller stations and nearby communities.
The question is why? These two Silicon Valley giants make billions on advertising in the world's wealthiest markets. Why work so hard going after users so poor or remote?
The World Economic Forum claims that around 4 billion people today don't have access to the internet. And 1 billion of them are in India.
That's far more people than the 3.2 billion who do have access. Those already accessing the Internet, for the most part, are probably already using Google and Facebook services, or have decided not to.
Facebook CEO Mark Zuckerberg wants, according to a recent PopSci feature, to "friend the rest of humanity." Toward that end, Facebook is "working to beam the Internet, via DIY transmitters, or drones and lasers, to the billions on the planet who do not yet have online access." Clearly Google wants those same people using Google services as well.
Facebook spins this effort as a kind of philanthropy. But as I detailed in this space in February, Facebook's Internet.org is not an "org" or nonprofit. It's just a business development group executing a customer acquisition strategy inside Facebook.
Both Facebook and Google tried to "friend the rest of humanity" with zero-rating schemes. (Zero-rating is when bandwidth is free as long as you're using a specific app or visiting a specific site.) They did this by partnering with local telecoms around the world to offer free internet access when people use the services that either Facebook or Google offer.
Facebook's approach involved a mobile website and app called Facebook Free Basics. While this began as a subsidy (provided by the carrier, not Facebook), it expanded into an America Online-like "internet lite" kind of offering, where any company wanting to get involved could offer a slimmed down version of its services, which were housed on Facebook servers instead of the regular internet.
At some point, Facebook claimed Free Basics was available in 38 countries, all of which were in Africa, Asia, the Middle East and Latin America. Today, it's not clear in how many countries it's still available. (Facebook didn't respond to my request for information.)
Facebook has struggled to get its "Free Basics" program accepted. India banned Facebook Free Basics as a violation of net neutrality. Egypt banned Free Basics because Facebook refused to allow the Egyptian government to use the app to spy on users. In Angola, software pirates hijacked the Wikipedia app inside Free Basics to share files illegally.
Despite setbacks, Facebook Free Basics is still in place and even expanding in some markets.
Meanwhile, Google's zero-rating scheme, called Free Zone, appears to have failed to make the world a better place, although this fact has not been reported before, to the best of my knowledge. (Google did not respond to my request for information.)
I contacted most of Google's Free Zone telecom partners. Some refused comment, but others said the program was now defunct. A representative with Kenya's Safaricom even told me that Free Zone in that country was just a 3-month promotion in 2014 and is no longer in operation.
I also crowdsourced the question among my Google+ followers in markets where Free Zone is supposed to be operating. I was told that in South Africa, the Philippines, Nigeria and Thailand that Free Zone is not available.
As far as I can tell, Google Free Zone is dead.
Ultimately, Facebook Free Basics and Google Free Zone are mostly expedient placeholders for the heavy stuff -- namely bringing cheaper or faster internet to unconnected or poorly connected communities around the world.
Google this week hired Tom Moore, who is the co-founder of satellite-based broadband service provider WildBlue Communications Inc., to head up the company's ambitious Loon program. Loon is an initiative in Google parent Alphabet's X research labs for using balloons to relay internet connectivity to remote populations.
We also learned this week that Facebook has commissioned Elon Musk's SpaceX rocket company to launch Facebook's first satellite into orbit, scheduled for Sept. 3. The satellite is intended to enable Facebook to beam internet connectivity to "large parts of West, East and Southern Africa," according to Zuckerberg.
Google and Facebook are also working on drones, lasers and other technologies to bring connectivity to the disconnected worldwide.
Making the world a better place for Amazon, Facebook and Google
As Microsoft learned a few years ago when it tried to compete with Google Search using Bing -- and as every new social network learns when it comes out with an alternative to Facebook -- when it comes to big internet brands, people pick something and stick with it forever. (McDonald's learned the same lesson, which is why that burger chain's customer acquisition strategy involves "Happy Meals," clowns and "Playplaces.")
So when the majority of the people on the planet do start reading eBooks and get online, and do pick their favorite brands, Amazon, Facebook and Google want to be there to scoop up those future lifelong users. More than a philanthropic service, it’s also a forward-looking business plan.
Sure: These companies and their customer-acquisition strategies may, in fact, make the world a better place.
But let's not give them too much credit. With the billions they stand to profit, they won't need it.