LOGOS An Open Letter to As appeared in the Frankfurter Allgemeine Zeitung, 17 April 2014

Mathias Döpfner

Mathias Döpfner is Chairman and CEO of SE in . He has been with Axel Springer SE since 1998, initially as editor-in-chief of and since 2000 as a member of the Management Board. Among various positions he has held in media companies, he was editor-in-chief of the Wochenpost and Hamburger Morgenpost and Brussels-based correspondent for Frankfurter Allgemeine Zeitung. He studied Musicology, German, and Theatrical Arts in Frankfurt and Boston. He is a member of the of Time Warner, Inc., the Board of Directors of Warner Group, and the Board of Directors of RHJ International SA and holds honorary offices at, among others, the American Academy, the American Jewish Committee, and the European Publishers Council (EPC). In 2010, he was visiting professor in media at the and became a member of St John’s College.

Dear Eric Schmidt,

In your text ‘Die Chancen des Wachstums’ (‘The Opportunities for Growth’) in the Frankfurter Allgemeine Zeitung, you reply to an article that this had published a few days earlier under the title ‘Angst vor ’ (‘Fear of Google’). You repeatedly men- tion the Axel Springer house. In the spirit of transparency I would like to reply with an open letter to highlight a couple of things from our point of view. We have known each other for many years, and have, as you state, had lengthy and frequent discussions on the relationship between European publishers and Google. As you know, I am a great admirer of Google’s entrepreneurial success. In just a few short years, starting in 1998, this company has grown to employ almost 50,000 people world- wide, generated US$60 billion in revenue last year, and has a current market capitalization of more than US350 billion. Google is not only the biggest search engine in the world, but

DOI: 10.1163/1878-4712-11112046 LOGOS 25/3 © 2014 LOGOS 7 Mathias Döpfner An Open Letter to Eric Schmidt

along with YouTube (the second biggest search engine municating with each other on equal terms. How could in the world) it also has the largest video platform, with we? Google doesn’t need us. But we need Google. And Chrome the biggest browser, with the most widely we are also worlds apart economically. At US$14 billion, used email provider, and with Android the biggest op- Google’s annual profit is about twenty times that of Axel erating system for mobile devices. Your article rightly Springer. The one generates more profit per quarter than points out what fabulous impetus Google has given to the revenues of the other in a whole year. Our business growth of the digital economy. In 2013, Google made a relationship is that of the Goliath of Google to the David profit of US$14 billion. I take my hat off to this outstand- of Axel Springer. When Google changed an algorithm, ing entrepreneurial performance. one of our subsidiaries lost 70 per cent of its traffic with- In your text you refer to the marketing cooperation in a few days. The fact that this subsidiary is a competitor between Google and Axel Springer. We were also happy of Google’s is certainly a coincidence. with it. But some of our readers have now interpreted We are afraid of Google. I must state this very clearly this to mean that Axel Springer is evidently schizophren- and frankly, because few of my colleagues dare do so ic. On the one hand, Axel Springer is part of a European publicly. And as the biggest among the small, perhaps it antitrust action against Google, and is in dispute with is also up to us to be the first to speak out in this debate. them regarding the issue of enforcement of German an- You wrote it yourself in your book: ‘We believe that mod- cillary copyright prohibiting the stealing of content; on ern technology platforms, such as Google, , the other hand, Axel Springer not only benefits from the Amazon and Apple, are even more powerful than most traffic it receives via Google but from Google’s algorithm people realize … and what gives them power is their for marketing the remaining space in its online advertis- ability to grow—specifically, their speed to scale. Almost ing. You can call it schizophrenic—or liberal. Or, to use nothing, short of a biological virus, can scale as quickly, one of our Federal Chancellor’s favourite phrases: there efficiently or aggressively as these technology platforms is no alternative. and this makes the people who build, control, and use We know of no alternative that could offer even par- them powerful too.’ tially comparable technological prerequisites for the au- The discussion about Google’s power is therefore not tomated marketing of advertising. And we cannot afford a conspiracy theory propagated by old-school diehards. to give up this source of revenue because we desperately You yourself speak of the new power of the creators, need the money for technological investments in the owners, and users. In the long term I am not so sure about future. Which is why other publishers are increasingly the users. Power is soon followed by powerlessness. And doing the same. We also know of no alternative search this is precisely the reason why we now need to have this engine that could maintain or increase our online reach. discussion in the interests of the long-term integrity of A large proportion of high-quality journalistic media the digital economy’s ecosystem. This applies to compe- receives its traffic primarily via Google. In other areas, tition, not only economic, but also political. It concerns especially of a non-journalistic nature, customers find our values, our understanding of the nature of humanity, their way to suppliers almost exclusively though Google. our worldwide social order, and, from our own perspec- This means, in plain language, that we—and many tive, the future of Europe. others—are dependent on Google. At the moment As the situation stands, your company will play a Google has a 91.2 per cent search-engine market share leading role in the various areas of our professional and in . In this case, the statement ‘if you don’t like private lives—in the house, in the car, in healthcare, in Google, you can remove yourself from their listings and robotronics. This is a huge opportunity and a no less se- go elsewhere’ is about as realistic as recommending to rious threat. I am afraid that it is simply not enough to an opponent of nuclear power that he just stop using state, as you do, that you want to make the world a ‘bet- electricity. He simply cannot do this in real life—unless ter place’. The internet critic Evgeny Morozov has clearly he wants to join the Amish. described the position that modern societies need to Google’s employees are always extremely friendly to take here: This is not a debate about technology and the us and to other publishing houses, but we are not com- fascinating opportunities it presents. This is a political

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