"Revenue-recognition rules that were approved in 2014 and went into effect at the end of 2017 call on companies to report financial results to their investors in the same manner that they are reported to the main decision-maker at the company, typically the chief executive. Basically, if a CEO sees numbers for a large segment of the company, the company should be reporting that segment’s results to investors.
As the revenue-recognition rules were being put in place by companies in 2017 ahead of the deadline, the Securities and Exchange Commission entered into communication with Alphabet specifically to discern why it was not providing revenue numbers for its segments, mentioning YouTube, Google Cloud and some other businesses, such as hardware. Google responded by saying that its chief decision-maker, Alphabet CEO Larry Page, did not see results parsed to that level, though Google CEO Sundar Pichai did."
> Please don't post insinuations about astroturfing, shilling, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email us and we'll look at the data.
I'm curious, what are they doing different now from then? Back then they had an ad business, and now they have an ad business. Back then they created useful services like Maps, Translate or Gmail, now they provide useful services like Photos, Docs and Drive.
What are they doing now that is "joining the evil" which they weren't doing before? Is your point about the fact that people's perception has changed? People these days just take free online services for granted and no longer want to put up with ads, but if it were all to go away, the majority of people would see it as a strict negative.
Now they had years of destroying trust, cancelling products and moving away from open standards (Reader, XMPP, web standards controversy, these proprietary Gmail experiments).
Privacy debacles like Buzz also played the part, as had this push for Google+, when they had tried to force everyone to use it.
Also, their grip on the Android OS is stronger, then Microsoft's grip over Windows ever was, and they abuse it, freezing AOSP and developing only proprietary features that lock developers into Google's services. Plus to that, they are now dominant in web browser market, with only Firefox being our last bastion against the browser monoculture. They have defeated the dragon and had become the dragon themselves. It's hilarious that the Boogeyman of the 00s, Microsoft, is now seen in a way more positive light than our former champion of the free and open web.
And yeah, the advertising had ballooned to insane levels.
I think it's that, now, everything is to feed the ad business while back in the day, it wasn't.
back then, they had lots of cool products, and they also served ads. now they have ads and lots of products the siphon data from users to feed the ads business.
I say this as someone worked there for a decade and saw lots of "NSA - not search or ads" t-shirts.
Even less data is being used for ads than when you worked there - Gmail is no longer used, Photos doesn't use them, Android doesn't except insomuch as the Google search bar exists on the home screen, Maps barely has ads...
Any evidence of that? Enterprise GSuite is not supposedly used, but consumer Gmail not feeding into ads would be surprising to me. Android feeds location and contacts data.
maybe you're using a different version of maps than I am, but I just downloaded it and the first page is chock full of ads, it begs me to turn on search history so it can show me "more relevant results".
it's also full of dark-patterns like if I click "commute" in the settings, there's no back "<" like there is in most views, but there's a nice blue "turn on" and a grayed out "no thanks".
hell, when you finally disable the account linkage (another dark pattern hiding that option), the main window is still 25% (+) ads.
It's not the ads. It's that Google literally had a mantra 'Don't be evil' but it was removed and much of their questionable actions to appease shareholders and pursue a profit. Back then, they gave up on the Chinese market to stick to their values. Now we have Project Maven, Dragonfly, restricting employee discourse etc. It isn't the worst company around by a long shot but the difference is obvious.
>I'm curious, what are they doing different now from then?
Nothing. To me Google has always been the same. It is just people believed in the "Do No Evil", when everyone has a different definition of Evil. So Google didn't change much, people's opinion did.
"Most Evil are created by those who think themselves as so Righteous." -Me
Google's ad experience is night and day different than it was 15+ years ago, and IMO what they do now is much more 'evil' than what they did back then:
1. One big reason that Google became so popular is they clearly delineated ads in the top bar and siderail, but the vast majority of search results were 'natural' search. Google even touted it back in the day: https://www.google.com/about/honestresults/ . TBH I'm surprised that page is still up.
2. For many of my searches ads now take up the ENTIRE front page of content, especially on mobile. It's virtually impossible for any business to survive by SEO alone, because Google has ensured that virtually all "commercial terms" get a ton of ads first. Paying "the Google tax" means business need to buy ads on their own name lest another business bid more and rank higher.
3. In the early days, Google was much less reliant on their "surveillance capitalism" because they already had a great signal to show you ads: what you searched for. Of course, the way capitalism works is it demands they squeeze every additional dollar where possible, so keeping track of everything you do allows them to make more money.
4. One small example, enough has been said regarding AMP and its negative impact on the web and small publishers on HN many times over, so no need to add more here IMO.
Thinking of the $2b/5 yr contract Snapchat signed, I wonder if there are any other massive contracts which represent a disproportionate amount of GCP gross...
I believe the 2019 AWS revenue is at $35B which means that a very consistent 4.4x multiplier against Google Cloud for 2017-18 is now going down to 3.9x.
AWS includes collaboration tools like WorkDocs and Chime as well so comparison is still like for like. Just because each vendor has different strengths (and leverages them differently) doesn't negate the broad comparison.
While I understand the sentiment, I think most of us are interested particularly in the separated cloud and productivity revenues, which is why people bring this up.
Even though AWS is 'purer' relative to GCP's and Azure's percentages of productivity revenues in their numbers, I don't think we can extrapolate much more than that from the numbers anyways.
Are youtube ads that much worse than cable TV? I pay for youtube premium and don't watch cable TV anymore so I honestly can't say myself, but from what I remember of each, they both seemed about on the same level of garbage-ness.
About three months ago, I visited a friend and we looked up a 15-minute cooking recipe. We were shown three ads in the process.
I subscribed to Premium quite early. They were showing me an IKEA bed ad multiple times a day, over a number of days. 3-4 different ads, but always the same product. The end result being that I will sleep on the ground before I ever purchase a Nordli bed.
You literally just did the thing that justifies the ads. You now have internalized an actual bed model and also spread the word that it exists as an IKEA model so the subconscious link is there, and to top it off you mentioned it on a forum, so thats free publicity
Whatever Ikea is spending on ads is apparently doing their jobs
I "internalized" the bed model about as much as Bill Murray internalized "I Got You Babe" in Groundhog Day, or anyone else would remember something that they found extremely irritating.
And the saying that there is "no such thing as bad publicity" only works in certain cases.
The very fact you remembered the bed at all is a huge win for that ad campaign and would be seen as a success, not a failure.
And the fact that ad caused you to purchase something (doesn't matter if it wasn't the bed itself) is a huge win for Google's Youtube advertising strategy. The net result is still causing you to part with money.
And yes, Google getting me to subscribe to YouTube Premium is obviously a win for Google. However, if the most attractive thing about your Product A is that it's "not Product B", that doesn't really build the kind of long-term relationship with your customer that you'd like.
The end result being me currently evaluating whether I need the YouTube Apps at all.
That's a pretty big negative spin on the "free + ads or pay" business model. Isn't that the model we all want? We all complain about ads, but what alternative is there other than to pay money?
I gladly pay for content in exchange to avoid ads if I can. I'm fine with ad-blocking "morally" when there is no other option, but I'm not OK with blocking ads on services that offer a reasonable price to avoid ads.
Of course, if you don't want to use youtube, by all means, you don't need to pay for it. But I wouldn't view the "pay or see ads" business model as some gross thing to avoid.
> That's a pretty big negative spin on the "free + ads or pay" business model. Isn't that the model we all want? We all complain about ads, but what alternative is there other than to pay money?
That's a good argument! I admit that I fully support the free + ads business model.
Thinking a bit more about this, I believe what irked me about the YouTube experience is (1) that I was repeatedly (ad nauseam) shown the very same ads, and (2) that the frequency was continuously increased to the point where the free+ads version was no longer watchable.
I already expressed what how I feel about (1), and (2) just feels like the wrong kind of pressure, because it impairs the product.
Here are two alternatives to (2) that I would have considered more effective: (A) mark a channel as "favorite" and watch those videos with zero ads, and (B) watch the first 100 videos a month with zero ads.
In both of those cases, I can see someone meeting me half-way. In its current form, it's just increasing and increasing the level on nagware.
Who’s going to pay the creators who are losing all the ad money in your possible examples? Anecdotally, myself and at least a third of my friends don’t watch more than 100 videos a month. Regardless. Of the people that do. That’s still 100 videos where ad money isn’t received. For normal creators and all the music up on YouTube, don’t they still want their money?
Unless the presumption is 100 videos with ads each month will lead to more overall ad video views. Or people turning off ad blockers or whatever people use. I find both hard to believe.
This surprises me - from desktop with ublock origin and ghostery, I never, ever see any youtube ads. Just a regular free gmail account. When I see what crap is shown at friends places when they use TV to browse youtube, I want to run away (I am physically allergic to ads it seems).
Is this due to some demographic algorithm or something else?
What do you mean? You have ad blockers on. So you don’t see ads. That’s your base. When you do see ads. It’s extremely annoying because it’s way above your base.
OTOH, friend watching YouTube on tv is used to seeing ads. That’s their base. So it’s not as bad.
If all ad blockers stopped working right now forever. You would likely adapt and be more or less fine with (albeit more annoyed) in due time. Not like your friends relish the ads either.
I actually like YouTube ads. I guess I am better targeted on the Web compared to Cable TV. So the usefulness on YouTube Ads are generally better, while Cable TV or other Offline Ads are better for Brand Building.
You've clearly never attempted to lookup how to do something on YouTube that is related to your car. I literally can't take hearing another O, O, O Reilly auto parts ad
>I can't believe they made $15bn off of YouTube ads. Who are they reaching with that crap?
searching on some SSO topic i had opened a tab with Okta too, and that opened floodgates - for the month after that i had to listen for those 5 seconds of Okta ads before each and every song on Youtube. I dare you to imagine how much it cost Okta (and thus produced profit for GOOG) given that we're talking about Identity Management in enterprise software and potential cost of the leads there.
Does that $15bn number include all the money google takes in from YouTube ads or just the money they keep after they pay the channels who have monetized their videos?
People constantly criticizing companies not taking long-term bets. When some company does take long-term bets, then some internet expert come along and find some arbitrary timeline to succeed without any justification and start criticizing without offering anything any substantial.
I wish we can have more thoughtful discussion, instead of Twitter style self aggrandizing comments.
Google takes large long-term bets that are closely related to their core business / competency. Some of those seem to be clearly working (see Cloud, Deepmind). As a shareholder, I want to see more of those.
Back when I was at Google, X (which many Other Bets came from) had a goal of all their projects having meaningful impact in 10 years. They've been working on Wing and Waymo for close to 10 years now. Those projects are not yet meaningfully impacting many people.
As an armchair CEO, I have doubts about the compensation (more salary / less equity vs startups) and funding (fewer choices funding sources for the companies, weird incentives for the investors vs VC funds) model for "Other Bets". Based off of that and the lack of results, I think they should force the Other Bets to stand on their own vs handing them more cash to burn.
It's true they haven't had a lot of real world impact, but it seems to be widely recognized in self-driving spheres that Waymo is #1, and they're valued at $100B (https://www.bloomberg.com/news/articles/2019-09-27/waymo-val...) which seems like a pretty good return. I think it's fair for them to continue plowing money into Waymo when the money they've put in so far people think could have returns.
They have not deployed their tech at scale, when competitors (Tesla) has widely deployed worse technology.
Even if they deploy their tech widely, it isn't clear it will generate significant revenue/profit. It might not be that expensive (think less than 1B) to build a good enough self driving car in 10 years. That'd create competition and drive down prices.
Someone else might figure out how to capture the value of self driving cars too. Maybe the profitable parts of self driving cars are the "apps" you can build once self driving cars are cheap.
I wouldn't invest in Waymo at 100B until they have a real business with real revenue and a real moat to protect that business.
You don’t find it disconcerting that none of Google’s non advertising bets have been successful. Compare Google’s revenue and profit mix to Amazon, Apple and Microsoft.
I want to get on the Pixel phones but every time I dig details of the latest models, I get turned off. They seem to be always one generation behind, For example, Pixel's highest memory model is always 2nd highest for iPhone and now Pixel can be expected to carry the camera system of iPhone 10 instead of 11 Pro. All these show off in their unveiling events. Google Android events are often held in venues that are ted better than the high school conference room as emergency meetings with amaturish audio/video system. It's as if they have determined that no one is watching this so why even bother. To me, iPhone always felt like they work hard to be a state of the art while Android is something that the rest of the world would have to buy anyway due to lower cost. Given the available cash and talent, they can do MUCH better.
Oh no, quite far from it. More like 50-60% Max. For the past few years Apple sold around 200M iPhone per year, Samsung on average sold around 300M per year.
But your point still stand, Google Pixel shipment isn't making much difference on the market.
This is more of a reply to your child comment about Pixel sales, but because this is a day old and unlikely to get any attention or replies as is. I’m posting this here:
I’ll prob geek out and look this up later. I’d be interested in the difference of products in their categories between the major tech companies:
Amazon:
Ring doorbell, Ring’s other stuff, Alexa Echo/Dot, all the other Alexa devices, Fire tablets, Fire stick
Facebook:
Portal, Oculus
Just to throw Apple in here outside their core: HomePod, ?
I’m sure I’m missing some things. Perhaps a company or two as well. Anyone know of anything else or something I wrote down wrong?
There’s also differences between market share and profitability/losses. Apple makes money with [almost] all hardware. While I think Alexa devices don’t make a profit though seem pretty dominant.
My point isn’t so much that the Pixel itself has a low sales volume, but more that Google is almost completely reliant on advertising for profits despite their “other bets” for over two decades.
I think part of the issue is that their "very long bets" (i.e. AI and self driving) have shown enough progress to now be merely "long bets" now which increases R&D expenses and means GOOG is essentially doubling down on the future via "other bets" in lieu of nearer-term revenue.
It's not very long bets but very few bets. The YC model has shown us that success is highly unpredictable and if you want to have big winners, make a lot of small bets. This is exactly the Nasim Taleb's philosophy and other well-known approaches to cultivating the long tail and outliers. Google actually had right model 15 years ago where they were churning out one product after another and today's big winners like Gmail and Maps are the survivors of that era. The story goes that Larry Page went to Steve Jobs and Jobs told him to cut down on all the random projects and do fewer things. Unfortunately what works for Apple apparently doesn't work for others.
"Other Bets" includes everything under the Alphabet umbrella that is not Google, which means various entities that are supposed to be turning into individually profitable companies.
Quarter after quarter G seaxeh results turn into ads. At some point there won't be any organic free results and all search results will be paid placements. Which is now 80% true
It’s not 80% true at all. It won’t ever get that far. It’s incredibly saturated now. But companies know there are limits. As an easy example. Facebook stock tanked for a bit partly because they lowered guidance and expectation for their ads. Especially IG ads. As they had saturated how many they can add and push.
