Google recognized its own business as an auction business through Varian’s analysis

Evidence

Varian spent several years as a consultant to Google before becoming the firm’s chief economist in 2007. He notes in his biographical material that “since 2002 he has been involved in many aspects of the company, including auction design, econometric analysis, finance, corporate strategy, and public policy.” When the Wall Street Journal reported on Varian’s new position at Google in 2007, it noted that the position entailed building “a team of economists, statisticians, and analysts to assist the company in ‘marketing, in human resources, in strategy, in policy related stuff.’” In his book on Google, Steven Levy quotes Eric Schmidt reflecting on how the firm learned to exploit its new “click economy”: “We have Hal Varian and we have the physicists.” In Levy’s 2009 Wired article on “Googlenomics,” Schmidt credits Varian’s early examination of the firm’s ad auctions with providing the eureka moment that clarified the true nature of Google’s business: “All of a sudden, we realized we were in the auction business.” — Shoshana Zuboff, The Age of Surveillance Capitalism, 1818

Categorization

• DEFINE: Establishes the ‘click economy’ and the pivotal realization that Google is fundamentally in the auction business — a defining reframe of the platform’s economic logic.
• CANDY: Schmidt’s line ‘All of a sudden, we realized we were in the auction business’ is a fun, tweetable encapsulation of Google’s self-discovery.
• XREF: connects to: Hal Varian played a leading role shaping Google’s commercial logic without executive title — Shoshana Zuboff, The Age of Surveillance Capitalism, 1817; Varian’s perspectives reveal the premises of the new market form — Shoshana Zuboff, The Age of Surveillance Capitalism, 1819

Broader Connections

• Varian’s perspectives reveal the premises of the new market form #expands (0.82) — Shoshana Zuboff, The Age of Surveillance Capitalism, 1819