Introduction

While the gift and capitalist economies might seem radically different, in practice capitalist entrepreneurs have found numerous opportunities to put gifts to work for profit. This chapter and the next one consider two of the resulting hybrid forms of economy that have developed in the digital space. While the forms overlap in practice, the next chapter looks at practices in which businesses take advantage of gifts from ordinary users, and this one examines the use of gifts – or something like gifts – by a company to its users. It focuses on Google's enormously profitable linkage of free services with targeted advertising – a linkage that depends on using those free services to acquire data about users. Business models like this, in which wage labour plays a marginal role because the core processes are operated largely by automated technology, illustrate the obsolescence of traditional Marxist analyses of capitalism. But Google's model also exposes the limits of mainstream economics: what is the relevance of price competition in a ‘market’ where the product is free? Neither of the established political economies is equipped to make sense of this kind of economic activity, but we can explain it in terms of interacting appropriative practices, as this chapter will show.

The chapter opens by introducing Google's web search service, then relates it to the concept of inducement gifts: a form of gifts designed to induce the recipient to take actions that generate benefits for the giver. Google has mastered the art of making web advertising highly effective by developing a series of strategies to secure user attachment to its search service, while seeking to minimise the dissatisfiers that advertising often produces: two goals that are often in tension. After examining these tensions, the chapter considers the issues of personalisation and privacy raised by Google's techniques. Finally, it puts together the pieces to summarise the complex of appropriative practices that produces both Google's profits and the search services that a huge proportion of Internet users rely on.

Web search and advertising

Although its enormous profits have allowed it to branch out into many other areas, Google's web search service is the primary source of its wealth and still the core of its business model.