GOLDHABER: So, we do live in a world where the human beings who have been in contact with things give them their value already to a very significant extent. And I think that one thing I got out of the conference that I told r0ml was the thought that money is narrowband, attention is broadband. And the broadband is going to swamp the narrowband in that, if I’m a stranger in a place, and I come alone and the only thing they know about me is how much money I have, that’s enough to sell me lunch. But now we’re getting towards a world where anybody can instantly be Googled. You can find out, you can pay attention to who they actually are. They become someone.
GOLDSTEIN: Right, but you don’t know how many times people have Googled you.
GOLDHABER: Now that’s an interesting point. I mean, you can know how many times people have looked at your Web site.
GOLDSTEIN: However, you don’t know how many times people have searched for you on Google.
GOLDHABER: That’d be very valuable if they would offer that.
GOLDSTEIN: That substance, which Google hides, is our "lookingforness." I’m giving them this asset (which I’ve never recognized as an economic asset) in the form of what I’m looking for. They are selling that to advertisers. The exchange is that I’m getting information. I’m giving lookingforness; I’m getting information, and they’re selling my lookingforness to advertisers. There’s an asymmetry that’s allowing them to be as profitable as they are. Are they creating value or are they taking value? The more they satisfy my lookingforness, the more I use them. The more I expose my desires to them, the more information they give me, the more ads they send me. They’re this giant router of people’s attention.
GOLDHABER: It is interesting because one of the brilliant features is they give you ads, but very inconspicuously. So you’re not blasted as you are with other Web sites with all these ads that are visibly annoying.
GOLDSTEIN: And the ads are typically more relevant so they feel like information, not advertising.
GOLDHABER: Right, it feels a little bit like it’s information, especially if you’re looking for a product. But they also are giving away attention in the sense that – well, for example, people find my articles, and so, I get attention that I wouldn’t otherwise get.
GOLDSTEIN: If you look for "attention" on Google, you get your article on the Natural Economy of the Net.
GOLDHABER: What I wonder is whether their whole system is self-defeating because it depends so much on people putting in links. Since if you have Google, why put in links? You don’t need to do that anymore. You can rely on Google to find things, but then you can’t find things if you don’t put in links. The other thing is people are not necessarily looking at those ads. Those ads have to be inconspicuous so you run into the problem that – of course, advertisers are desperate to get ads, to put forward ads.
GOLDSTEIN: But people get used to them and the click-thrus go down pretty commonly. It’s already happening. People get inured to the ads, and they stop paying attention to them. I designed one of the early banners in 1995 for HotWired magazine. It was Details magazine ad about their sex column, and 40% of people who saw it clicked on it.
GOLDSTEIN: Because of content and because it was a sort of new format. And then two years later, the average click-thru was probably .5%. So very quickly new forms of communication, new forms of media, people start to…
GOLDHABER: And the ads of course get more and more annoying in the effort, except on Google, in the effort to grab your attention. And Google has so far withstood that although people keep claiming it’s not going to last.
GOLDSTEIN: The New York Times has these pages that say, “click here to skip this ad”. If you do, that means you’ve seen it.
GOLDHABER: You at least saw the upper right hand corner of it. I think that’s getting to the point of diminishing returns. And I suspect that the same thing happens to Google. I mean advertisers go crazy in effect to reach you in this whole world of cable TV and HBO and stuff with no ads and TIVO. I do think there’s a growing terror among advertisers about this, and I think that Google has played it very smart.
GOLDSTEIN: Is it sustainable long term?
GOLDHABER: I think it’s probably sustainable. I don’t think the growth is sustainable, but I think – well it might be in the sense that as advertisers get more and more desperate, they’ll pay more and more for less and less. I think Google so far has a great deal of trust. People trust it so far not to mess everything up.
(thread 8 of conversation with between seth goldstein and michael goldhaber after oreilly's attention economy conference, in march of 2006 in oakland)