Tuesday, June 25, 2024
Artificial IntelligenceBusiness & EconomicsTech

Two Things Making The Internet Unusable In 2023

The internet of today is sort of a Kafkaesque dystopia– it’s never quite clear where we’re going, but there are all manner of bizarre side quests that derail even the most basic objectives. I’ve written a bit about how AI-generated content is making the internet less usable and less useful. Separately, I’ve also written– usually as a parenthetical aside- about companies doing whatever they can to extend the life of the current business cycle, even if it breaks the internet, breaks the economy, and screws over consumers. Let’s look at each of these topics in a bit more depth as we consider the usability of the internet. The concept of “usability” here can refer to intuitive or  “ergonomic” user experience interactions, or it can refer generally to “it being easy and affordable to get stuff done on the internet.”

Late in the business cycle, it becomes necessary– according to some bozo with a Stanford MBA- to squeeze out as much additional revenue or profit (whatever, doesn’t even matter) as possible, just to keep the party going. This results in consumer products becoming less usable (thanks, Google, et alia). So, even as the machine is blowing gaskets and steam is hissing out, it becomes necessary to throw more fuel into the engine and keep it running.

1. Proliferation of Unregulated AI Generated Content And AI “Optimization.”

I wrote about this recently. There are entire websites that contain swaths of completely unusable content that seems to be generated solely for the purpose of attracting clicks, and it’s coming from everyone ranging from products that review consumer goods (TomsGuide has proven notorious in this regard) to Indeed, already the bane of my existence (whose intern must have had a side project creating, well, whatever the unholy fuck this is).

This lowers the quality of content on the internet, and rewards companies and content creators with more resources who are able to engage in what I’m calling aggressive content creation– large quantities of content with expansive SEO, irrespective of how shitty the quality is. I suggest that we should probably start having something that says that “this content is AI-generated.” In my ideal world, we’d require companies to push AI-generated content down in search results. Why? Because, as I’ve said before, our current AI models are basically just very sophisticated calculators– they’re not poets or writers, and we should really leave the writing to the humans, because AI frankly just sucks at it.

Regulating this would, of course, piss off Google, which in my mind is more of an incentive to do it. Google is basically little more than a data and AI company these days, which effectively gatekeeps a huge chunk of the internet based on how it tracks and regulates the flow of content. (Fixing that, of course, is another whole ass thing). Oh, and in spite of Google being a data and AI company, it can’t hold onto talent in this department. The company continues to struggle through scandal after scandal, but it’s got so much money that, well, who even fucking cares, I guess? When you control the entire internet, you can get away with whatever.

Then, there’s a second thing!

Post-usable internet: thanks to a failure of policymakers to create any meaningful consumer protections or guardrails around internet content and the ways in which it is distributed, the internet is increasingly cluttered with ubiquitous ads, AI-generated junk content, and nefarious

2. Squeezing Out Them Extra Bucks, No Matter What.

While in b-school, we read an interesting study that contained a meta-analysis of thousands of quarterly earnings reports. To the uninitiated, the quarterly earnings report, or 10-Q as she is known to the SEC, is sort of the holy grail of securities investment (a.k.a. “stonks”) because it is the most regular indicator of (generally) accurate enough financial information to show how a company has been doing. The authors of the study found that the later the companies were in the business cycle, the more likely they were to engage creative solutions to inflate earnings for the most immediate upcoming quarterly report, even if this ended up

The line between “fraudulent misrepresentation” and “creative accounting” is much finer than most people would have you believe, and, while explaining why would be probably worth another article (or book), the gist of it is that the grey area mostly comes from the fact that accrual-based accounting is a system based on estimates and reasonable expectations rather than, say, dope on the table. It is not terribly difficult to move things from one month to the next or vice versa, especially if you have enough notice. Principles of revenue recognition are supposedly pretty firm under GAAP. But also? Not really. That’s why people hire companies like Deloitte, KPMG, BDO, or Arthur Andersen (oops).

Accounting fraud-adjacency aside, this always accompanies efforts on the parts of companies to squeeze out additional profit in ways that are perhaps less sketchy from an accounting standpoint, but frankly just annoying to consumers.

 

A Few Great Examples.

Consumer Electronics. I’ve noticed that TuneIn radio— operated from my most beloved Alexa devices- has started playing not one, but sometimes as many as three, advertisements before it starts playing radio. To be clear, this is free radio. Similar to cosmic microwave radiation, it comes through the airwaves for free whether we turn on the radio or not. Of course, there are a few more steps involved with compressing the audio into a digital stream and sending it across the internet wires before it comes into my house, transmits from our router to the mesh wifi on the third floor, and transmits then to the Alexa. But at a marginal rate, it’s basically free for the company orchestrating this process because, once it’s set up, it requires little to no maintenance on a marginal (per kilobit streamed) basis, while providing saleable data. It’s not enough that I pay for Amazon Prime. Nor is it enough that I pay for Amazon Music on top of that (whose interface is abominable, but it’s substantially cheaper than Spotify). But at this point? I do not need a functionally useless smart speaker that also plays ads.

Credit card companies, emboldened by the Trump Administration’s gleeful evisceration of the Consumer Financial Protection Bureau, have gradually wound down most of the perks they were offering in the mid to late 2010s. Even the protections during COVID era have evaporated. Given that there’s a staggering $17 trillion in consumer debt right now, I guess they have a captive audience.

Companies have begun placing ads everywhere, and everything is paywalled. Exactly what this is worth is not clear and pretty hard to assess because of the amount of increasingly sophisticated bot traffic that systems have to figure out how to classify. That my ad revenue has declined over the past few years while non-bot traffic has increased, suggests that even Google is having a hard time figuring this one out.

The unusable internet: An explosive growth in traffic over the past few years has been disproportionately driven by bot traffic, AI-generated content creation, and companies trying to squeeze out every last penny from consumers before the business cycle goes bust.

Conclusions

When I’m considering a business cycle or a growth cycle of a company, I’m always looking at indicators for things that might be going wrong. When I say “going wrong,” I mean “the company isn’t on a consistent trajectory of revenue growth and profit growth.” In my business-y opinion, any profit is good, but bigger and especially publicly-traded companies are obsessed with trajectories of growth rather than line-item profit margins, because this allows them to aggrandize wealth at ever greater levels.

So, when a company is on an upward trajectory, a few things are going to happen in varied sequence: The revenue growth rate will slow. (To These Stanford MBA Types, at this point, you might as well start panicking– the objective to grow as quickly for as long a time as possible). As the revenue growth curve flattens, this brings the threat that revenue might stop growing altogether. At some point, someone is freaking out about earnings (profit) growth also slowing down. Eventually, the revenue and profit may well both decrease, and this is when managers are in full-on panic mode.

Companies are loath to lay off their coveted Stanford MBAs, so they instead let the Stanford MBAs come up with clever ideas of how to squeeze out additional revenue streams, additional profits. More likely than not is that the Stanford MBA figures out ways to slash especially lower-tier positions.

We could, of course, never stop paying the Stanford MBA their starting salary of $147k, of course. Saving on that salary could easily hire a few entry-level customer service representatives to deal with customers upset about the increasing unusability of the platform in question. Or, we could we fire that MBA person and invest the savings in making the thing actually work better.

Crazy idea, I know. But at this point, companies are expanding cloud capacity while a good chunk of all of the new traffic on the internet is, well… no one’s really clear what it is, except that it’s making things a whole lot harder for smaller businesses, smaller content creators, and individuals.

(TuneIn did not immediately respond to a request for comment, and Amazon provided a perfunctory statement that third party apps aren’t its responsibility and it has no control over what they do, which is one of those “true, but misleading” statements.) 

Nat M. Zorach

Nat M. Zorach, AICP, MBA, is a city planner and energy professional based in Detroit, where he writes about infrastructure, sustainability, tech, and more. A native of Lancaster, Pennsylvania, he attended Grinnell College in Iowa, the Kogod School of Business at American University, the POCACITO transatlantic program, the SISE program at the University of Illinois Chicago, and he is also a StartingBloc Social Innovation Fellow. He enjoys long walks through historic, disinvested Rust Belt neighborhoods at sunset. (Nat's views and opinions are his own and do not represent those of his employer).

Leave a Reply