Alphabet slides 5% after missing earnings expectations on revenue of $20.3B(techcrunch.com)
techcrunch.com
Alphabet slides 5% after missing earnings expectations on revenue of $20.3B
http://techcrunch.com/2016/04/21/alphabet-slides-6-after-missing-earnings-expectations/
202 comments
> More than 90% of their profits come online advertising
actually, it looks like this may be the first quarter where their non-advertising revenue was over 10% of their total revenue. $2,071 out of $20,091 (in millions). Growing 24% YoY isn't too shabby, either.
actually, it looks like this may be the first quarter where their non-advertising revenue was over 10% of their total revenue. $2,071 out of $20,091 (in millions). Growing 24% YoY isn't too shabby, either.
They seem to be doing a pretty good job of diversifying? The profits haven't caught up yet, granted, but this is a company with many of the smartest people in the world working on future game-changing tech and sinking a ton of money into research. Still bullish here :)
They are doing a poor job of diversifying. Those side businesses are producing a small amount of revenue. It would be one thing if the profits hadn't caught up, the real problem is there isn't much in the way of sales to begin with. I see no example business of theirs that will get them even moderately diversified off of online advertising in the next five years. And I'm not speaking of technology Alphabet is messing with - what business are they looking to capture in self-driving cars for example? I see no example of an actual business there so far.
Granted, this only matters in the scenario in which their online advertising business contracts meaningfully (whether due to ad-blockers or otherwise). If ad-blockers gain usage at an accelerating pace, Google is unlikely to have much time to diversify (and that takes a long time when you're talking $20b in sales to off-set).
So far Google has been flaky, disorganized and unprincipled about developing other real businesses. They should have a dramatically larger cloud services business for example, but they handled that incompetently and ceded years and tons of ground to AWS.
Essentially Google has to spend the next several years praying that ad-blockers don't rapidly bring their spigot of online ad dollars to an end. That's a real bad position to have put yourself in if you're a $536 billion corporation.
Granted, this only matters in the scenario in which their online advertising business contracts meaningfully (whether due to ad-blockers or otherwise). If ad-blockers gain usage at an accelerating pace, Google is unlikely to have much time to diversify (and that takes a long time when you're talking $20b in sales to off-set).
So far Google has been flaky, disorganized and unprincipled about developing other real businesses. They should have a dramatically larger cloud services business for example, but they handled that incompetently and ceded years and tons of ground to AWS.
Essentially Google has to spend the next several years praying that ad-blockers don't rapidly bring their spigot of online ad dollars to an end. That's a real bad position to have put yourself in if you're a $536 billion corporation.
I block ads because "native" ad producers like Taboola, Outbrain, Revcontent, ... you get the point. These advertising companies like to show NSFW content at the end of news articles at some sites. Therefore I block ads for the same reason I block pornographic sites.
This was pretty liberating because before "native" ads I felt a pang of guilt for blocking ads.
If Google wants to stop ad blockers they should hide sites that use these obnoxious "native" ad networks.
This was pretty liberating because before "native" ads I felt a pang of guilt for blocking ads.
If Google wants to stop ad blockers they should hide sites that use these obnoxious "native" ad networks.
This comment prompted me to investigate why these ads still showed up for me on Mobile Firefox, despite having AdBlock Plus installed. In the AdBlock options, there's a check box to allow "acceptable" ads.
Sorry other allegedly acceptable ads, but I don't need trashy clickbait at the end of every news story so you all lose out.
Sorry other allegedly acceptable ads, but I don't need trashy clickbait at the end of every news story so you all lose out.
That would bring an antitrust lawsuit against them pretty quickly, I think.
This is probably the worst thing about being influential and/or wealthy. Nobody would sue opera if they did it.
Does opera bring in 18 billion dollars a year from advertising? Anti competitive is a much easier sell against Google, since advertising is their core business. I don't see how this has much to do with influence.
I agree, but let's be fair here. Porn brings much more value to the world than Taboola and Outbrain could ever hope for.
> If Google wants to stop ad blockers they should hide sites that use these obnoxious "native" ad networks.
This would instantly and Google in court for anti-competitive practices...and rightfully so. Imagine if Google suddenly said, "we are going to punish any publisher that doesn't use Adsense within organic search listings." Holy cow that would be bad, and the scary part is that Google could easily do this without even announcing it.
This would instantly and Google in court for anti-competitive practices...and rightfully so. Imagine if Google suddenly said, "we are going to punish any publisher that doesn't use Adsense within organic search listings." Holy cow that would be bad, and the scary part is that Google could easily do this without even announcing it.
Cloud.
I think they are very serious about becoming the market leader in this space. They are behind AWS, but if they can leverage the same technology that they use internally, they will have a compelling offering.
I think they are very serious about becoming the market leader in this space. They are behind AWS, but if they can leverage the same technology that they use internally, they will have a compelling offering.
And yet they managed to make another complicated cloud service.
Would be nice if someone would cater for Startup owners that do not have time to study documentation and overlook multiple processes just to run a simple bot etc.
Would be nice if someone would cater for Startup owners that do not have time to study documentation and overlook multiple processes just to run a simple bot etc.
GCE is much simpler to use than EC2. Google came to the party late and they have seemed to take some time to not replicate AWSs annoyances.
The problem for me is that "much simpler" is not good enough.
With DO for example when I go to their panel I never used it before it will take me tops 1 hour to find all the possible options, all perks and cons, everything. In just 1 hour.
I know, I know, AWS and Google Cloud is not DO and I agree. But would it hurt to introduce DO or Vultr style UX and make it easier for regular user to launch what he wants without all the expert language and need to jump in to documentation for hours?
Would button "Simple" and "Advanced" UI be really that hard to make?
I, as startup owner, dont really have time to focus on all the noise from large cloud providers, its easier to just launch 5 VPS with DO or Vultr and create my own infrastructure. And while I grow I doubt I will move my business to any of the cloud providers because I dont have time for it. Its easier to just build infrastructure on VPS's for $5 or just go for dedicated servers for backend.
I know, I know, AWS and Google Cloud is not DO and I agree. But would it hurt to introduce DO or Vultr style UX and make it easier for regular user to launch what he wants without all the expert language and need to jump in to documentation for hours?
Would button "Simple" and "Advanced" UI be really that hard to make?
I, as startup owner, dont really have time to focus on all the noise from large cloud providers, its easier to just launch 5 VPS with DO or Vultr and create my own infrastructure. And while I grow I doubt I will move my business to any of the cloud providers because I dont have time for it. Its easier to just build infrastructure on VPS's for $5 or just go for dedicated servers for backend.
Would you please care to share learning resources about GCE other than the official docs?
I've moved our infrastructure over to GCE and basically just clicked around in the interface until I had what I wanted. It's really quite easy (although I'm only using compute engine and bigtable right now).
I got 300$ in credits on every google account when I first vistited which allowed me to play around with their big data stuff and some public datasets, which was nice.
I got 300$ in credits on every google account when I first vistited which allowed me to play around with their big data stuff and some public datasets, which was nice.
If only ...
If only there were cloud products and services that were dead simple and just did one little useful thing just the way you wanted it.
If only ...
If only there were cloud products and services that were dead simple and just did one little useful thing just the way you wanted it.
If only ...
That is nice in theory but nobody really wants that. In practice I do not want to run my app on 40 different services potentially owned by different companies. If you mean that inside one company is fine than I believe ec2, s3 etc seperately already provide what you say: if you would make them simpler it would get annoying as you would have to set up yet more services (within the same portal, which is a bit better) to get stuff done. I think the theory is nice to start off but I do not think there is a real market for 'dead simple with one little useful thing'. Then again: try it, who knows.
"Then again: try it, who knows."
You know what, I think I will!
What should I call it ?
You know what, I think I will!
What should I call it ?
If the ads business goes to shit, the cloud business takes a beating, also.
Cloud is basically SaaS which is the antithesis of the advertisement model.
But okay, I guess you must know better.
But okay, I guess you must know better.
I believe the person to which you replied meant that a lot of cloud platforms/hosting revenue depends on ad-funded customers. If the customers go out of business and aren't replaced, subscription revenue suffers.
> what business are they looking to capture in self-driving cars for example? I see no example of an actual business there so far.
God, I wouldn't want to be on the record saying that. People used to say things like this about web search too.
God, I wouldn't want to be on the record saying that. People used to say things like this about web search too.
Yup. There's a lot of mischief in "so far."
Some products take a while to build, especially when dealing with less-than-friendly .gov regulators.
Some products take a while to build, especially when dealing with less-than-friendly .gov regulators.
Thought the whole self driving car thing was a bid to scalp the transportation business. Some of the largest companies around are half logistics, say Amazon & Walmart.
Cloud profits are not much ( for AWS around $687M per quarter [1]) compared to ad ( around $7B per quarter [2]). Google has many businesses that has the potential to generate a lot of money like
a) licensing technology to car manufacturers for self-driving cars
b) Manufacturing and selling hardware ( like Chromebooks, OnHub, Chromecasts etc )
c) Google Apps, GCE, Google Drive etc
d) Google checkout/wallet payment processing
e) Online publishing with Google Play, Music, Youtube etc.
If you look through Google's list of products[3], I am sure you will be able to find many more potential high profit products. But they are terrible at turning them into viable businesses.
[1] http://www.theregister.co.uk/2016/01/28/amazons_numbers_for_...
[2] http://www.wsj.com/articles/alphabet-reports-rising-profits-...
[3] https://en.wikipedia.org/wiki/List_of_Google_products
a) licensing technology to car manufacturers for self-driving cars
b) Manufacturing and selling hardware ( like Chromebooks, OnHub, Chromecasts etc )
c) Google Apps, GCE, Google Drive etc
d) Google checkout/wallet payment processing
e) Online publishing with Google Play, Music, Youtube etc.
If you look through Google's list of products[3], I am sure you will be able to find many more potential high profit products. But they are terrible at turning them into viable businesses.
[1] http://www.theregister.co.uk/2016/01/28/amazons_numbers_for_...
[2] http://www.wsj.com/articles/alphabet-reports-rising-profits-...
[3] https://en.wikipedia.org/wiki/List_of_Google_products
+1 that is a good list
Although I use Google Search a lot less than I used to, I find myself a fairly happy customer of Play Music + TV + Movies, and I am using GCE as the platform for a new book I am writing on cognitive computing.
Google checkout may end up being huge. Google has sufficient funds to do more Google branded products. Their premium Chromebook is sort of too expensive to be a mainstream product, but I could see a Google branded cheaper Chromebook selling very well.
Google branded Chromebooks and Android phones bundled using their Fi wireless data services also seems like a good source of profit.
Although I use Google Search a lot less than I used to, I find myself a fairly happy customer of Play Music + TV + Movies, and I am using GCE as the platform for a new book I am writing on cognitive computing.
Google checkout may end up being huge. Google has sufficient funds to do more Google branded products. Their premium Chromebook is sort of too expensive to be a mainstream product, but I could see a Google branded cheaper Chromebook selling very well.
Google branded Chromebooks and Android phones bundled using their Fi wireless data services also seems like a good source of profit.
a) Until self driving car technology commoditizes and car manufacturers catches up, buys a Chinese copy cat, or rolls their own solution
b) Low margins
c) Thin margins
d) Lots of competition
e) Maybe
Nothing beats the fat profits of auctioning off ad space to advertisers.
b) Low margins
c) Thin margins
d) Lots of competition
e) Maybe
Nothing beats the fat profits of auctioning off ad space to advertisers.
Self driving cars: imagine you could just tap a button on your phone and a car came along to take you to your destination - you would not need to own a car anymore and instead pay a monthly fee to Alphabet (or whoever). The fee will be even lower if you agree to watch ads during the ride. ;-)
But the big opportunity is that they could offer you a car-as-a-service for much less than the current cost of a car. Today's cars are unused most of the time, so if we'd replace them with such a service, we'd need significantly fewer of them, thus reducing the cost.
But the big opportunity is that they could offer you a car-as-a-service for much less than the current cost of a car. Today's cars are unused most of the time, so if we'd replace them with such a service, we'd need significantly fewer of them, thus reducing the cost.
If you look at the financials of car rental companies, markets are not too eager to pay premium for a business that has high upfront capital cost (buying/manufacturing the vehicles) as well as high operating costs (car washes, maintenance, repairs). You could argue that Alphabet's margins will be so good as to obliterate those concerns, but then why haven't other operators in the space (GM owns some car rental businesses, for instance) boasted those?
The margins on Uber-like trips in self-driving cars might be better than the margins on day rental of conventional vehicles.
Self-driving changes quite a bit about cars. If accident rates can be low enough, they don't need as much conventional safety measures; air bags, metal armour that crumples, etc. Less weight there means lower fuel costs. The way they drive should mean lower maintenance & fuel costs compared with human drivers.
Self-driving changes quite a bit about cars. If accident rates can be low enough, they don't need as much conventional safety measures; air bags, metal armour that crumples, etc. Less weight there means lower fuel costs. The way they drive should mean lower maintenance & fuel costs compared with human drivers.
> If accident rates can be low enough, they don't need as much conventional safety measures; air bags, metal armour that crumples, etc.
There is no hope of that happening. You're never going to convince people to remove safety features, and even if you could, a car that has 5% as many collisions but logs 50 times as many miles would justify more safety features because there will be more collisions per vehicle despite there being fewer collisions per mile.
> The way they drive should mean lower maintenance & fuel costs compared with human drivers.
All of that sort of thing will be dwarfed by not having to pay a human driver. But in a competitive market it will also be eroded by competition. A cab ride that used to be $20 will soon be $2 because now $2 can turn a profit.
On the other hand, if it now costs $2 instead of $20 then people will start using hired cars instead of owning cars and then you might make a lot of it back on volume. (By essentially destroying the rest of the auto industry.)
There is no hope of that happening. You're never going to convince people to remove safety features, and even if you could, a car that has 5% as many collisions but logs 50 times as many miles would justify more safety features because there will be more collisions per vehicle despite there being fewer collisions per mile.
> The way they drive should mean lower maintenance & fuel costs compared with human drivers.
All of that sort of thing will be dwarfed by not having to pay a human driver. But in a competitive market it will also be eroded by competition. A cab ride that used to be $20 will soon be $2 because now $2 can turn a profit.
On the other hand, if it now costs $2 instead of $20 then people will start using hired cars instead of owning cars and then you might make a lot of it back on volume. (By essentially destroying the rest of the auto industry.)
There is no hope of that happening. You're never going
to convince people to remove safety features,
With that said, I don't think the savings from removing safety features would be big enough to have much impact on Google's finances. I'd have thought the real savings would be from avoiding the costs of being in accidents. Or capturing some of the value of people being productive when they would otherwise be driving, although that value might be hard to capture.
[1] http://www.zdnet.com/article/enterprise-rent-a-car-removed-a...
Uber's entire spiel is avoiding the capital hit associated with purchasing a pricey asset that depreciates quickly by keeping it on driver's personal balance sheet, not theirs.
I agree autonomous driving changes some cost dynamics, but on the other hand people not only have higher expectations on rented vehicles as far as cleanliness and safety go (that "check engine" light is no longer optional, dirt from previous passenger's shoes needs to be vacuumed, random leftover trash and water bottles need to be taken out), but are also likely to abuse rented vehicles for random dirty jobs like hauling potted plants from the nursery, as well as plain old bar hopping while drunk with associated sanitary accidents.
I agree autonomous driving changes some cost dynamics, but on the other hand people not only have higher expectations on rented vehicles as far as cleanliness and safety go (that "check engine" light is no longer optional, dirt from previous passenger's shoes needs to be vacuumed, random leftover trash and water bottles need to be taken out), but are also likely to abuse rented vehicles for random dirty jobs like hauling potted plants from the nursery, as well as plain old bar hopping while drunk with associated sanitary accidents.
Your hypothetical "low accident protection" scenario is laughably unrealistic.
One major point against it is that even though self-driving cars may be here soon, none of us will live to see the day when manual driving is banned. Especially not in the freedom-happy US.
A second major counterpoint is that even in this fascist dictatorship where manual driving is banned, external factors (large wildlife, sudden slippery ice, human error in vehicle maintenance, etc.) will still cause serious accidents.
The third major counterpoint is: say you reduce accident rates by two or three orders of magnitude (which would be huge). Still, a tiny tiny fraction of people would end up in accidents. What society would be OK with saying "Oh, screw it, let those people die so manufacturers can build cheaper cars"?
One major point against it is that even though self-driving cars may be here soon, none of us will live to see the day when manual driving is banned. Especially not in the freedom-happy US.
A second major counterpoint is that even in this fascist dictatorship where manual driving is banned, external factors (large wildlife, sudden slippery ice, human error in vehicle maintenance, etc.) will still cause serious accidents.
The third major counterpoint is: say you reduce accident rates by two or three orders of magnitude (which would be huge). Still, a tiny tiny fraction of people would end up in accidents. What society would be OK with saying "Oh, screw it, let those people die so manufacturers can build cheaper cars"?
I can see a country like Singapore banning human-driven cars in a few years.
There are set to get self-driving taxis before the end of the year there. And you already need to bid on a pricy permit to operate your own car. (Certificate of Entitlement. A ten year one goes for more than 50k SGD.)
There are set to get self-driving taxis before the end of the year there. And you already need to bid on a pricy permit to operate your own car. (Certificate of Entitlement. A ten year one goes for more than 50k SGD.)
Today's cars are unused most of the time
But when they're used, most of them are used at the same time - rush hour traffic. If everyone wants to go to work in a car at the same time, you'll still need about as many cars.
What's needed is a diversification of working times: if half of the workforce started work an hour later, it would have a huge impact on traffic density and would also make things like shared self-driving cars more realistic.
But when they're used, most of them are used at the same time - rush hour traffic. If everyone wants to go to work in a car at the same time, you'll still need about as many cars.
What's needed is a diversification of working times: if half of the workforce started work an hour later, it would have a huge impact on traffic density and would also make things like shared self-driving cars more realistic.
Google is not the only player in the self-driving car market (or soon to be market), though.
There's Tesla, GM (with the Cruise acquisition)...heck even @geohot's startup comma.ai is also tackling the same challenges.
I highly doubt that will be enough to replace the market leader position they have with ads. And believe me, ads are going to die out quicker than a coked out wannabe actor in LA.
There's Tesla, GM (with the Cruise acquisition)...heck even @geohot's startup comma.ai is also tackling the same challenges.
I highly doubt that will be enough to replace the market leader position they have with ads. And believe me, ads are going to die out quicker than a coked out wannabe actor in LA.
Business in self driving cars? How about the elderly that get to choose between depending on somebody, or driving unsafely? How about carting around too young to drive? Making current taxis obsolete? Self driving big rigs?
It wouldn't necessarily eat the entire car industry, but it's close.
That said, yes, they have to target problems that require a lot of capital, because, in practice, a company that will turn a profit no matter what you do is not one that is ever in a rush, or where hungry entrepreneurs go. They have to aim for niches where regular venture capital would never dare to go. This leads to lots of risky bets, looking for one that really moves the needle.
Remember Xerox PARC? That is what a monster like Alphabet ends up doing. It was not great for Xerox, but we all sure benefitted from their 'failures'
It wouldn't necessarily eat the entire car industry, but it's close.
That said, yes, they have to target problems that require a lot of capital, because, in practice, a company that will turn a profit no matter what you do is not one that is ever in a rush, or where hungry entrepreneurs go. They have to aim for niches where regular venture capital would never dare to go. This leads to lots of risky bets, looking for one that really moves the needle.
Remember Xerox PARC? That is what a monster like Alphabet ends up doing. It was not great for Xerox, but we all sure benefitted from their 'failures'
Advertising will just change form.
Are there ad blockers for mobile? I feel like Google has already solved the ad blocker problem with Android.
> Are there ad blockers for mobile?
In terms of mobile apps, yes. There are rootless-firewalls that register themselves as an all-routes VPN and then blackhole 'unwanted' traffic.
Mobile browsers such as Firefox already have the same ad blockers plugins as desktop.
In terms of mobile apps, yes. There are rootless-firewalls that register themselves as an all-routes VPN and then blackhole 'unwanted' traffic.
Mobile browsers such as Firefox already have the same ad blockers plugins as desktop.
Firefox + ublock origin works fine for me.
They just need add google ads into Google Now...that's it. Unless you strip the whole framework, you can not possibly block it.
It just shows that the smartest people in the world working on cool tech doesn't necessarily mean business success. It's a different kind of smarts.
Alphabet is the second largest publicly traded company in the world ... if that's not business success, what is?
I think in these kinds of conversations we sometimes lose a little perspective.
I think in these kinds of conversations we sometimes lose a little perspective.
Sorry, my post was not complete. No doubt they are doing great with their ad business. But they seem to struggle with making money from any of the other things they do. And to justify their valuation at some point they have make massive amounts of profit. Much more than they do now.
So it seems to me that some of the smartest guys doing the coolest tech in the world is not sufficient to making money.
So it seems to me that some of the smartest guys doing the coolest tech in the world is not sufficient to making money.
> struggle with making money from any of the other things they do
They're not so much struggling to make money, but struggling to make comparable money to one of the most phenomenally successful businesses ever seen.
It's like saying Apple TV is a hobby because it's only a billion dollar business.
Rounding errors at Google/Apple are greater than our wildest dreams.
They're not so much struggling to make money, but struggling to make comparable money to one of the most phenomenally successful businesses ever seen.
It's like saying Apple TV is a hobby because it's only a billion dollar business.
Rounding errors at Google/Apple are greater than our wildest dreams.
The struggle is moving the relative needle. I doubt they have trouble making money, but is it going to move that $20.3B number? Because in order to actually move it, it needs minimum revenues of $100,000,000.
I'm sure they make money in other pursuits (I'm sure GCE is doing some, and I hear their government contracts are sizable) but $100m just to tick up the revenue decimal point...
I'm sure they make money in other pursuits (I'm sure GCE is doing some, and I hear their government contracts are sizable) but $100m just to tick up the revenue decimal point...
Amazon AWS revenue was 2.4B in Q4 and 2B in Q3. GCE would be obvious next (and the easiest as a lot of components is already in-place) big money printing thing for Google if done right. Yet it seems that they struggle even there.
One of the main issue i see here is pretty typical for Google in my view, ie. that Google isn't really trying to serve customers - i mean in search Google is monopolist and thus advertisers would pay attention to and follow every whim of Google. In cloud computing customers don't have to appreciate the honor of being a GCE customer, instead they can just go to AWS (where automated tools as well as real customer service are really geared for customer).
One of the main issue i see here is pretty typical for Google in my view, ie. that Google isn't really trying to serve customers - i mean in search Google is monopolist and thus advertisers would pay attention to and follow every whim of Google. In cloud computing customers don't have to appreciate the honor of being a GCE customer, instead they can just go to AWS (where automated tools as well as real customer service are really geared for customer).
I'd agree with the difference. Maybe it's the articles I've read recently, but Amazon seems to have more agile / startup philosophies (trying, failing, continuing support, and iterating) embedded higher up.
I've seen too many instances of pretty simple Google usability / feature bug reports closed as "will not fix / working as intended" to chalk it up to specific teams. "We built the Pontiac Aztek perfectly, and you should love us for it" type project design seems embedded in their DNA.
I've seen too many instances of pretty simple Google usability / feature bug reports closed as "will not fix / working as intended" to chalk it up to specific teams. "We built the Pontiac Aztek perfectly, and you should love us for it" type project design seems embedded in their DNA.
How long did it take for Google to really start printing money? 5? Maybe 10 years? Think of those projects now not wildly profitable as the seeds of new, profitable businesses down the road.
Short term thinking, that's the problem with the equities market.
Short term thinking, that's the problem with the equities market.
>How long did it take for Google to really start printing money? 5? Maybe 10 years? Think of those projects now not wildly profitable as the seeds of new, profitable businesses down the road.
What projects? The self driving car? The traditional car companies (that also work on that), Tesla, the Chinese, and even Apple who's verified to be working on such a project can possibly all kill them on that market.
What else of importance is there? Their AWS competitor?
What projects? The self driving car? The traditional car companies (that also work on that), Tesla, the Chinese, and even Apple who's verified to be working on such a project can possibly all kill them on that market.
What else of importance is there? Their AWS competitor?
> What else of importance is there? Their AWS competitor?
Google Fiber. Note how profitable that is for Comcast as a monopoly. I'm confident Google can still reap double digit margins while keeping costs down for Google Fiber users through their knowledge of network management.
Google Fiber. Note how profitable that is for Comcast as a monopoly. I'm confident Google can still reap double digit margins while keeping costs down for Google Fiber users through their knowledge of network management.
Note they were granted some patents re: self driving cars. http://www.tomsguide.com/us/google-driverless-car-patent-usp...
0 to 60 is easier to do than 60 to 120.
>More than 90% of their profits come online advertising, something that can be easily blocked for life with a simple browser extension/plugin.
If I were Tim Cook, I'd be at least a little tempted to update iOS and OSX to include adblocking on by default.
If I were Tim Cook, I'd be at least a little tempted to update iOS and OSX to include adblocking on by default.
Why? Do Apple and Google really have that adversarial a relationship? It seems like a small subset of their respective fans are the only ones that actually want a "war" between the two.
Apple is the most profitable company in the world and consistently takes almost all of the profit in the smartphone industry. They also make a large portion of the profits in the PC world despite their relatively meager market share. Does Apple really want to expand into the sub $200, or even $100, smartphone market? Unless they do, I don't even really see Google/Android as their competitor.
I know it can be short sighted to base things on personal anecdotes, but while I don't use an iPhone myself, almost all of my friends do and they extensively use Google products ranging from Gmail, Maps, Photos and search.
Apple seems to have the best of both worlds in the current situation. They dominate the high end profitable hardware market and their users still get to benefit from Google products if they so choose. I'm not convinced that Apple would be better off if Google disappeared. Replicating all those services will be expensive.
Apple is the most profitable company in the world and consistently takes almost all of the profit in the smartphone industry. They also make a large portion of the profits in the PC world despite their relatively meager market share. Does Apple really want to expand into the sub $200, or even $100, smartphone market? Unless they do, I don't even really see Google/Android as their competitor.
I know it can be short sighted to base things on personal anecdotes, but while I don't use an iPhone myself, almost all of my friends do and they extensively use Google products ranging from Gmail, Maps, Photos and search.
Apple seems to have the best of both worlds in the current situation. They dominate the high end profitable hardware market and their users still get to benefit from Google products if they so choose. I'm not convinced that Apple would be better off if Google disappeared. Replicating all those services will be expensive.
Google would have no problem forcing ads into the main SERP hose if it came to Microsoft or Apple blocking by default.
Any attempt to do that, would result in two likely outcomes:
1) It would create a bad product, according to Google's own prior statements on the matter.
2) It would encourage government authorities to look even closer at potential abuses toward consumers (ie what kind of consumer harm is occurring, if any, when a monopoly search provider prevents attempts by consumers to use ad blockers; that would have to be resolved legally). European authorities would likely pounce on such a move immediately, looking for any opening by mistake to go after the company, given how they've handled Google thus far.
1) It would create a bad product, according to Google's own prior statements on the matter.
2) It would encourage government authorities to look even closer at potential abuses toward consumers (ie what kind of consumer harm is occurring, if any, when a monopoly search provider prevents attempts by consumers to use ad blockers; that would have to be resolved legally). European authorities would likely pounce on such a move immediately, looking for any opening by mistake to go after the company, given how they've handled Google thus far.
Yeah but the alternative would be losing all their revenues.
The Google infrastructure now powers a chunk of icloud.
I don't see apple killing the revenue stream that feeds their bottomless pool of capacity.
I don't see apple killing the revenue stream that feeds their bottomless pool of capacity.
Apple has been rumored to be moving away from cloud providers for a while now.
Have been wondering for a while they are building an internal cloud e.g. using FoundationDB acquisition as their DBaaS.
Have been wondering for a while they are building an internal cloud e.g. using FoundationDB acquisition as their DBaaS.
The Information recently reported on Apple's cloud efforts. They don't seem to be going well:
Infighting Slows Apple’s Cloud Engineering Efforts: http://go.theinformation.com/2c8e01
> Two engineering teams working on new internal cloud-computing infrastructure to power Apple’s Web services are in open conflict, the people say. Already, the infighting has sparked at least one key employee departure, with more expected soon.
Inside Apple’s Cloud Infrastructure Troubles: http://go.theinformation.com/d716c4
> Despite years of trying, Apple has failed to develop infrastructure to handle traffic for its Internet services, which include iTunes, Apple Maps, iMessage and backups of images and videos stored on the iPhone.
Infighting Slows Apple’s Cloud Engineering Efforts: http://go.theinformation.com/2c8e01
> Two engineering teams working on new internal cloud-computing infrastructure to power Apple’s Web services are in open conflict, the people say. Already, the infighting has sparked at least one key employee departure, with more expected soon.
Inside Apple’s Cloud Infrastructure Troubles: http://go.theinformation.com/d716c4
> Despite years of trying, Apple has failed to develop infrastructure to handle traffic for its Internet services, which include iTunes, Apple Maps, iMessage and backups of images and videos stored on the iPhone.
They are far from the only game in town, so why would Apple care if its a casualty of some business Realpolitik.
If adblocking becomes a serious problem for Google, they can (and will) block the relevant extensions in Chrome.
Also, mobile chrome (increasingly dominant worldwide) doesn't, and won't, have adblocking.
Yes, I'm ignoring numerically insignificant installs like rooted hosts redirects, firefox mobile, opera, etc. Those aren't going to impact revenue.
Also, mobile chrome (increasingly dominant worldwide) doesn't, and won't, have adblocking.
Yes, I'm ignoring numerically insignificant installs like rooted hosts redirects, firefox mobile, opera, etc. Those aren't going to impact revenue.
That's an excellent way to get people to switch away from Chrome. I love Chrome, use it all the time, but if I can't have any adblocking? No thanks.
They could just use an js adblock blocker like wired&co. Sure, there are ways around that, but thats way too much trouble for the average user
Aren't there extensions that block scripts that check whether you have an ad blocker or not? Ad blockers could have those by default if the problem became too big.
That's also not good for them, because it grants a potentially huge advantage to their competitors who do support adblocking. That may or may not be a long term big deal, but it's a risk.
What can they do for Firefox then? I am already using, not because of ads, just because I like it better. But imagine as soon as they do something like peole will immediately switch their browsers.
Exactly. The main "real" concern would be iOS. Even that can be handled, though.
There are sites I just can't go on mobile because iOS web view doesn't support purify and they have a form of ad that steals the current page - as in, not a popup or popunder, the whole page gets redirected and original link is lost, you can't even going back because the redirect stack they drive your browser trough is too deep. It's usually the mobsweet network.
Amusing to say the least. They made nearly 2 Billion more than Microsoft in income this quarter and their Play store made more than 2 Billion in revenue. Ad blocking isn't really a concern. When that day does materialize then Google will simply circumvent them.
You understand the online advertising encompasses vastly more than the standard IAB Ad Units your plugins block, right? Those barely scratch the surface of the behemoth that lies beneath. There's a reason the vast majority of display ads are so shitty these days: it's because only the bottom of the barrel still utilize them.
You can't block ads with streaming services or other captive audiences. They seen well positioned in this regard.
It's also difficult to block in app ads without root / jailbreak
But the majority of that online advertising income comes from ads on their own search results pages, not from adsense ads.
One can still block those. My adblocker does by default.
If push comes to shove Google can do any number of things to fight against ads. For example, it started, silently, without explaining,for some who remove ads in youtube, to stop the video in the middle.
Heck even creating a credible enough rumor that blocking google search ads seriously degrades results could have a material impact.
Heck even creating a credible enough rumor that blocking google search ads seriously degrades results could have a material impact.
This would be a good thing in the long run. It would open the door to paid services that could be competitive. Currently YouTube is free and there are no consequences for blocking ads. It's funny, I didn't even realize that YouTube had ads until I turned off my ad blocker one day. I was amazed at how awful the experience was...
I think you can pay to disable ads on YouTube: https://www.youtube.com/red
Why? Isn't that the exact time when you would want to see ads?
In my case, I guess 90% of searches either include the term "stack overflow" or "Wikipedia", or get augmented by them when an initial search doesn't give desired results. I can't see how such searches might produce adverts that would help answer my questions.
It's very rare that I search for a product and even then, chances are that I add "review" or "sucks" (can work fine in combination with a specific product; negative reviews often tell you more about a product than positive ones, just like a requirements document or a product road map becomes a lot better if one includes things that people might the product to do that it will not do)
It's very rare that I search for a product and even then, chances are that I add "review" or "sucks" (can work fine in combination with a specific product; negative reviews often tell you more about a product than positive ones, just like a requirements document or a product road map becomes a lot better if one includes things that people might the product to do that it will not do)
Ad blockers block those by default.
They can definitely have more of an effect against ad blocking if they choose to:
- Disable ad blocking in Chrome
- Block browsers blocking ads from Google search
- Release tools for AdSense that block content when ad blockers are detected
The downside to this would be in the backlash that would follow, but they will resort to these measures if ever their business is truly threatened by ad blocking.
- Disable ad blocking in Chrome
- Block browsers blocking ads from Google search
- Release tools for AdSense that block content when ad blockers are detected
The downside to this would be in the backlash that would follow, but they will resort to these measures if ever their business is truly threatened by ad blocking.
The more people that use ad blocking, the more important directed search becomes. Which Google is pretty good at.
I don't think ad blocking represents armageddon for Google.
I don't think ad blocking represents armageddon for Google.
Google makes their money primarily from users clicking on ads they want to follow. Ad blockers don't affect that. Not everyone hates ads.
>Long-term, I am not very bullish on Google/Alphabet. More than 90% of their profits come online advertising, something that can be easily blocked for life with a simple browser extension/plugin. Some worrying figures
And yet frequently the press glorifies Google's "innovation" and is bullish on Apple, that has like 4-5 different sources of income (the PCs, the phone, the tablet, the watch, the tv, the cloud services, the app store, the music store) -- with more than one of them earning more profits than the whole of Alphabet put together.
And yet frequently the press glorifies Google's "innovation" and is bullish on Apple, that has like 4-5 different sources of income (the PCs, the phone, the tablet, the watch, the tv, the cloud services, the app store, the music store) -- with more than one of them earning more profits than the whole of Alphabet put together.
Let's be realistic. The only real profitable revenue stream for Apple is the phone and app store.
>with more than one of them earning more profits than the whole of Alphabet put together.
Which would those be with the exception of the phone? As for those other other revenue streams you mentioned - they're just a blip on the radar (tvOS and cloud - really?)
>with more than one of them earning more profits than the whole of Alphabet put together.
Which would those be with the exception of the phone? As for those other other revenue streams you mentioned - they're just a blip on the radar (tvOS and cloud - really?)
>Let's be realistic. The only real profitable revenue stream for Apple is the phone and app store.
The App Store, while big in itself, is insignificant to Apple's revenue stream. Which makes me think you are not really familiar with how it breaks down.
Apple's revenue is ~230 billion. Alphabet is around ~80 billion.
iPhone revenues were 68 of that, the iPad is 9%+, the Mac another 9%, services is 8% and other products (Apple TV, Apple Watch) around 5%.
You could kill the iPhone today and still have a killer company the size of Alphabet.
As for the "blip of the radar" regarding the Apple cloud services: http://appleinsider.com/articles/16/04/20/as-a-standalone-co...
The App Store, while big in itself, is insignificant to Apple's revenue stream. Which makes me think you are not really familiar with how it breaks down.
Apple's revenue is ~230 billion. Alphabet is around ~80 billion.
iPhone revenues were 68 of that, the iPad is 9%+, the Mac another 9%, services is 8% and other products (Apple TV, Apple Watch) around 5%.
You could kill the iPhone today and still have a killer company the size of Alphabet.
As for the "blip of the radar" regarding the Apple cloud services: http://appleinsider.com/articles/16/04/20/as-a-standalone-co...
> https://blog.pagefair.com/2015/ad-blocking-report/
Can anyone shed light on the relatively widespread adoption of ad blocking software in Poland and Greece? A cursory search doesn't indicate any particular bandwidth or cost constraints.
Can anyone shed light on the relatively widespread adoption of ad blocking software in Poland and Greece? A cursory search doesn't indicate any particular bandwidth or cost constraints.
My guess is TV rights. All of the streaming sites have a very heavy ad-load, and are nigh-unusable without an ad-blocker. Poland and Greece probably aren't particularly profitable markets, so translations/releases may be delayed, creating demand for the streaming services and as a consequence pushing up ad-blocking.
If anyone knows how the numbers break down, it is google. Luckily, they own 3-10 working backups of the entire user facing internet and pretty key infrastructure that the internet depends on. So, if in the event that people start blocking advertisements they would probably:
> Restructure as a Meta Company balkanizing google search to limit anti-trust lawsuits.
> Allow other sectors of the company to start using that data to create businesses.
> Invest heavily into infrastructure and try to promote google as the main infrastructure for developers to build on. Probably really engage the community by doing open source projects for data analysis & machine learning (their core competency) and provide tutorials, data hosting and google service integration so developers get into their ecosystem.
> continue investing in Android for the 1.3 Billion people using
> continue delivering chrome for the 40% internet users using it
> Consider monetizing the nearly 1 Billion active gmail users.
However, if they were really smart, they would release eyeglasses that cost 2-4000 dollars and have less computing power than a calculator. This will be a gamechanger.
> Restructure as a Meta Company balkanizing google search to limit anti-trust lawsuits.
> Allow other sectors of the company to start using that data to create businesses.
> Invest heavily into infrastructure and try to promote google as the main infrastructure for developers to build on. Probably really engage the community by doing open source projects for data analysis & machine learning (their core competency) and provide tutorials, data hosting and google service integration so developers get into their ecosystem.
> continue investing in Android for the 1.3 Billion people using
> continue delivering chrome for the 40% internet users using it
> Consider monetizing the nearly 1 Billion active gmail users.
However, if they were really smart, they would release eyeglasses that cost 2-4000 dollars and have less computing power than a calculator. This will be a gamechanger.
Good luck blocking mobile ads :/
Unlike desktop, they control Android and its ecosystem. They just won't make it easy to block them.
Unlike desktop, they control Android and its ecosystem. They just won't make it easy to block them.
This is part of why so much is going in app it is much harder to block ads in apps.
And...if YTB starts anti-ad-block because they are desperate...what do you think?
Does ad blocking work with search ads and YouTube ads?
Yep.
Figure 1 and 3 are duplicates.
Alphabet isn't the only big corp down after hours today.
As of now:
Microsoft - down 5%. http://www.marketwatch.com/investing/stock/msft
Visa - down 4% http://www.marketwatch.com/investing/stock/v
Starbux - down 4% http://www.marketwatch.com/investing/stock/sbux
In each case, the cause is different. But one thing is common, trailing PE ratios of all four are high compared to historical norms. High PE ratios are maintained with high growth in revenue, earnings and margins. Back off even a bit and the invisible hand smacks you in the face.
As of now:
Microsoft - down 5%. http://www.marketwatch.com/investing/stock/msft
Visa - down 4% http://www.marketwatch.com/investing/stock/v
Starbux - down 4% http://www.marketwatch.com/investing/stock/sbux
In each case, the cause is different. But one thing is common, trailing PE ratios of all four are high compared to historical norms. High PE ratios are maintained with high growth in revenue, earnings and margins. Back off even a bit and the invisible hand smacks you in the face.
[deleted]
Upvoted for the funny Adam Smith reference.
So, Google makes fantastic products. Much of our online interaction involves Google in some way or the other. And the only way these guys have figured to make money is ads.
Why can't they sell products and be like an Apple, Oracle, Microsoft. I am guessing it's too much work to grow in such a massive pace without ads. Ads are a marketers/sales persons dream and these marketers are very likely to spend money.
This ad economy is so very sad and it's killed many nice things. Everyone is just giving out things for free and nobody wants to pay for anything thanks to this whole ad economy. News reporting has gone to the dogs because nobody wants to pay. Email will no see decent progress thanks to gmail.
Anyway, I feel Google will be a much better company if it can get rid of dependence on ads but I guess it's too late now since it has to answer to shareholders and show never ending growth.
Why can't they sell products and be like an Apple, Oracle, Microsoft. I am guessing it's too much work to grow in such a massive pace without ads. Ads are a marketers/sales persons dream and these marketers are very likely to spend money.
This ad economy is so very sad and it's killed many nice things. Everyone is just giving out things for free and nobody wants to pay for anything thanks to this whole ad economy. News reporting has gone to the dogs because nobody wants to pay. Email will no see decent progress thanks to gmail.
Anyway, I feel Google will be a much better company if it can get rid of dependence on ads but I guess it's too late now since it has to answer to shareholders and show never ending growth.
>>Email will no see decent progress thanks to gmail.
I remember how great email was before GMail:
1. Every few days I had delete emails so that I can get new email.
2. Delete sent mail immediately to make space for new emails.
3. More than 50% of emails received are spam.
Yeah right GMail was one that stopped progress of email :)
I remember how great email was before GMail:
1. Every few days I had delete emails so that I can get new email.
2. Delete sent mail immediately to make space for new emails.
3. More than 50% of emails received are spam.
Yeah right GMail was one that stopped progress of email :)
As I noted, Google makes great products including gmail. My point was that with gmail being free and good enough, there is nobody to compete with gmail. In 2016, nobody will start an email company even though there are lots of advancements that can be made.
It was acquired and shut down, but https://www.mailboxapp.com/ was a thing recently.
I don't agree with this. Google competes against Gmail with Inbox (a very advanced email product.) I also see people paying for Fastmail and some of the encrypted email products. Yahoo and Microsoft have also been improving their email services. I always like to see more competition, though.
I'll note here that the email startup Acompli, started in 2013, was acquired in 2014 for $200m. Their product is now Outlook Mobile.
Gmail hasn't had nearly the stifling effect that one might assume!
Gmail hasn't had nearly the stifling effect that one might assume!
>>even though there are lots of advancements that can be made.
Such as?
Such as?
My company, my school, and just about every person I know uses Office 365 for their business email. Tons of people pay for email.
You honestly had really shitty spam blocking before. That's all. Nothing more. They didn't invent spam free email.
My morning routine involves marking at least ten emails as spam on my gmail account. They really aren't the be all and end all of spam blocking.
My non-gmail account (on an address that has been around for almost a decade before gmail existed) running a more modern anti spam solution, not nearly as bad.
My morning routine involves marking at least ten emails as spam on my gmail account. They really aren't the be all and end all of spam blocking.
My non-gmail account (on an address that has been around for almost a decade before gmail existed) running a more modern anti spam solution, not nearly as bad.
Future progress though...may be very different....security and privacy considerations are hardly a good thing for GMail as a revenue source...
Why can't they sell products and be
like an Apple, Oracle, Microsoft.
Aside from what Google's doing. You're assuming that the value someone personally derives from using something is the value other people derive from pushing it to them.
I.e. you have ads on Google, some of which cost >$10. To the companies paying for them that makes sense, because they might be selling a product that costs $500-1000, with say 10% conversion.
But a user is never going to be persuaded to pay >$10 simply to click a link.
So yes, there are some things Google does for free that they could be selling, but a) they may not be easy to sell directly b) even if people bought them it wouldn't make up the difference they make from ads, because the value isn't on the consumer side, it's on the advertiser's side.
Are the companies paying $10 per click? Otherwise I'm not sure you're making the appropriate comparison.
Yes, they are:
http://www.wordstream.com/articles/most-expensive-keywords
#20 is "cord blood"?! TIL that some people preserve their children’s umbilical cord blood in case the stem cells become medically useful someday.
Wait until you learn about placenta teddy bears: http://www.inhabitots.com/doing-it-for-the-kids-design-exhib...
(for the people who don't want to eat them)
(for the people who don't want to eat them)
Interesting, even though it's now 5 years old. I'd be interested in the evolution. Also, a pie chart? Really? I can't fathom who thought it'd be a good idea…
$10 per click for Google's US search traffic is not outrageous.
"mesothelioma attorneys" is $50+ per click.
Expected value of a class-action asbestos lawsuit = Millions? 10s of millions?
Expected value of a class-action asbestos lawsuit = Millions? 10s of millions?
That, and its really hard to lose those cases. Shooting fish in a barrel.
Not even class-action, just individual lawsuits.
For mesothelioma, an in-person referral from a doctor to an attorney is worth well over $10,000. Of course the doctor doesn't get paid until after the successful suit - but even discounting the time value of money, it's easy to see how advertising at $50/click could work out.
For mesothelioma, an in-person referral from a doctor to an attorney is worth well over $10,000. Of course the doctor doesn't get paid until after the successful suit - but even discounting the time value of money, it's easy to see how advertising at $50/click could work out.
Nobody was questioning the economics, it's obvious why they do what they do. I was questioning the kind of company Google wants to be. It can be greater (in my eyes anyway). For example, Apple can still generate phenomenal profits just on the basis of their product and doesn't need to resort to putting ads everywhere.
When you have optimized your company structure, culture etc for one type of output, it is not easy to do things that are entirely different. It will either deliver a compromised "new" output, or (even worse), compromise the output that is the mainstay of the company.
Google could not just become a wildly profitable Apple-style "hardware first" company overnight (or, arguably, ever).
Conversely, we have all seen Apple struggling to deliver cloud services that are reliable and desirable (beyond their integration into Apple's ecosystem) since the days of iTools and MobileMe..
Google could not just become a wildly profitable Apple-style "hardware first" company overnight (or, arguably, ever).
Conversely, we have all seen Apple struggling to deliver cloud services that are reliable and desirable (beyond their integration into Apple's ecosystem) since the days of iTools and MobileMe..
"Anyway, I feel Google will be a much better company if it can get rid of dependence on ads"
Do you feel like the NFL will be a better company once it rids itself of that pesky "football" dependence ?
Will McDonalds finally break free of the hamburger racket and flourish as a company ?
Google isn't some company that just happens to make a bunch of money from ads - they are an advertising company. Period. The end. Online ads stemming from search results is the thing they do.
It sure sounds neat to bootstrap a world-beating conglomerate and dominate all market spheres with your plexes full of big brains, but it's not going to happen.
It's not going to happen.
They will live and die with the search ads. They will not disrupt the car industry. They will not launch rockets to mars. They will not solve homelessness.
Do you feel like the NFL will be a better company once it rids itself of that pesky "football" dependence ?
Will McDonalds finally break free of the hamburger racket and flourish as a company ?
Google isn't some company that just happens to make a bunch of money from ads - they are an advertising company. Period. The end. Online ads stemming from search results is the thing they do.
It sure sounds neat to bootstrap a world-beating conglomerate and dominate all market spheres with your plexes full of big brains, but it's not going to happen.
It's not going to happen.
They will live and die with the search ads. They will not disrupt the car industry. They will not launch rockets to mars. They will not solve homelessness.
While I upvoted you, it is still possible to pivot to another industry. Nintendo after all started out by selling playing cards.
The problem is not that nobody wants to pay, but that in the digital economy, content and many software products are relatively easy to copy. And once you got that, you know that the cheapest guy will win and take most of your customers, so why not be the cheapest guy, especially if it pays very well ?
The other option is to make your product hard to copy by network effects or data collection, but again, here it's natural for the cheapest guy to win.
The other option is to make your product hard to copy by network effects or data collection, but again, here it's natural for the cheapest guy to win.
I don't think it's easy to copy. I can understand that the search market is ad driven. But they have put ads in everything now. Why does gmail have ads? It's not easily copyable and people will take years to build a decent gmail competitor.
And good products that didn't have ads like google reader get shutdown :/
And good products that didn't have ads like google reader get shutdown :/
"Paid clicks for Google were up 29 percent year-over-year for the first quarter"
I'm amazed this trend continues. Page views almost certainly were NOT up 29% yoy. Meaning that clicks are growing faster than page views, in a big way, every single quarter, for years.
That's what sets the investor expectations, but I don't see a way this trend continues forever. There's only so much room for additional ads, ad optimization, etc. At some point, you're as optimized as you can be, and growth becomes solely driven by pageviews.
I'm amazed this trend continues. Page views almost certainly were NOT up 29% yoy. Meaning that clicks are growing faster than page views, in a big way, every single quarter, for years.
That's what sets the investor expectations, but I don't see a way this trend continues forever. There's only so much room for additional ads, ad optimization, etc. At some point, you're as optimized as you can be, and growth becomes solely driven by pageviews.
I imagine part of it is explained by the fact that when I did a search on a mobile device, nearly 90% of the front fold was ad.
http://i.imgur.com/S5nClc4.png
http://i.imgur.com/S5nClc4.png
Yeah, Google has really been expanding the real estate given to paid ads vs natural search results. My guess is they've seen a big shift from natural results to paid results. At some point, though, people will start to believe the value of the search page has suffered.
For the last ~2 years Google has been rolling out changes slightly before earnings are released each quarter. For example, the yellow Ad label a few months ago, and it is likely to switch to Green to blend in with the Advertiser's Display URL.
Last week Google Maps Ads switched status from being in Search Partners to being included in ALL AdWords campaigns with Location Ad Extensions. Now Google is displaying ads in Map search results. There are also 4 results on top, 3 on bottom with no sidebar, this reduced inventory in an attempt to drive up CPCs. I've seen CPCs increase 10-15% because of this over the last month. There are also queries that return 7 paid results and only 9 organic results.
Google isn't innovating, they're just making ads appear as similar to organic results as humanly possible (if you're a webmaster, you'll get penalized for this) and making sure ads are everywhere possible. Baidu's results have paid listings interspersed without labels, which is what Google is on track to do within 2 years. They're great at equivocating. They penalize sites that build links, yet they themselves send emails soliciting KW heavy anchor text to Play vendors. They'll also look the other way if you're a Google Ventures funded company caught blatantly "spamming", a la Thumbtack and Nest.
Mobile CPCs are still roughly 30% lower than desktop, but it doesn't convert nearly as well, so it is worth less. As already mentioned, Google isn't growing search volume, rather increasing the number of ads they're showing, so say 7 ads per page on 1st, 2nd and 3rd pages of results, versus 13 on 1st page and 3 on 2nd, none on 3rd. If your organic results just happen to get worse, users have to dig deeper into the SERPs to find what they're looking for, while also driving an increase in impressions.
Last week Google Maps Ads switched status from being in Search Partners to being included in ALL AdWords campaigns with Location Ad Extensions. Now Google is displaying ads in Map search results. There are also 4 results on top, 3 on bottom with no sidebar, this reduced inventory in an attempt to drive up CPCs. I've seen CPCs increase 10-15% because of this over the last month. There are also queries that return 7 paid results and only 9 organic results.
Google isn't innovating, they're just making ads appear as similar to organic results as humanly possible (if you're a webmaster, you'll get penalized for this) and making sure ads are everywhere possible. Baidu's results have paid listings interspersed without labels, which is what Google is on track to do within 2 years. They're great at equivocating. They penalize sites that build links, yet they themselves send emails soliciting KW heavy anchor text to Play vendors. They'll also look the other way if you're a Google Ventures funded company caught blatantly "spamming", a la Thumbtack and Nest.
Mobile CPCs are still roughly 30% lower than desktop, but it doesn't convert nearly as well, so it is worth less. As already mentioned, Google isn't growing search volume, rather increasing the number of ads they're showing, so say 7 ads per page on 1st, 2nd and 3rd pages of results, versus 13 on 1st page and 3 on 2nd, none on 3rd. If your organic results just happen to get worse, users have to dig deeper into the SERPs to find what they're looking for, while also driving an increase in impressions.
More likely they ran a few experiments putting more on, and the statistics said more people clicked them. I doubt it's actually that users have a preference towards paid results
You should check hotels related search on mobile. Page 1 is ads, scroll to 2nd page and it's Google's own hotel booking module which I would argue is ad as well.
I watch users all day click on the top link regardless of whether it says its an ad or not.
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The overwhelming majority of impressions do not result in clicks, so there is plenty of room for clicks per page view to increase.
You don't see an end there?
Ad clicks have been outpacing traffic for quite some time now. It wasn't always that way..it used to track the same.
At some point, there's no real estate left to push ads into, or you are as optimized as you can get.
Or, you play that game too far and consumers react in a different way (ad blockers, etc).
Ad clicks have been outpacing traffic for quite some time now. It wasn't always that way..it used to track the same.
At some point, there's no real estate left to push ads into, or you are as optimized as you can get.
Or, you play that game too far and consumers react in a different way (ad blockers, etc).
And Paid clicks on Google websites 38 %
GOOG/GOOGL's 'other bets' revenue is more than doubled yoy, though they spent 27% more yoy ($657MM just for Q1!!) for their 'other bets' operation.
Fiber infrastructure is expensive.
Did they invest a lot on fibre infrastructure? There are only in a couple of smallish cities and towns and most of their service deployment is based on existing infrastructure, AFAIK. Maybe I have missed something...
They're tracking to spend upwards of $3-$3.5 billion in 2016 on Google Fiber. They're likely spending a fair sum on infrastructure as well as everything else.
(from Q4 2015)
"In the earnings announcement this week, Alphabet (the parent company of Google) shared that most of it’s $869 million in capital spend on “Other Bets” went to Google Fiber, according to CFO Ruth Porat, and that Google Fiber would continue to be a driver of CapEx spending going forward."
https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...
(from Q4 2015)
"In the earnings announcement this week, Alphabet (the parent company of Google) shared that most of it’s $869 million in capital spend on “Other Bets” went to Google Fiber, according to CFO Ruth Porat, and that Google Fiber would continue to be a driver of CapEx spending going forward."
https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...
That is capital spending. They have lost more than $600mn (on $166mn of revenue), without including the $280mn in capex and the $145mn in stock-based compensation.
would it be valid to say G put more than $1B (657+280+145) in its R&D? that would be way ahead than most fed agencies including darpa for just 1 Q.
[deleted]
I wonder if other search engines are also starting to catch up?
I've been using DuckDuckGo for a while now and there was a time when it felt like I was missing out; However the product has improved dramatically of late and forget I'm no longer using Google.
I've been using DuckDuckGo for a while now and there was a time when it felt like I was missing out; However the product has improved dramatically of late and forget I'm no longer using Google.
Its hard to believe, because tracking and especially tracking over search history both over the immediate term and the somewhat longer term is exactly what enables Google to surface such good results.
I've disabled search history and Google still tends to give me the most relevant results. Perhaps they also do some customization based on session cookie or something (I know YouTube does for recommendations) and I'm pretty sure IP location still plays a role. But I think it's mainly that I know how to ask Google for what I want, not that Google knows what I want necessarily. I still give DDG and Bing a chance once in a while, just in case, but old habits die hard.
I understand the theory behind all that but I'm preferring the results DDG is now giving me. The bangs feature is also really nice.
I actually used DuckDuckGo about a year ago but I went back to Google after a month as the results felt crap, but I gave it a try recently and haven't looked back.
I haven't felt this was since leaving Altavista!
I actually used DuckDuckGo about a year ago but I went back to Google after a month as the results felt crap, but I gave it a try recently and haven't looked back.
I haven't felt this was since leaving Altavista!
DuckDuckGo's results have definitely improved over the last year. I now prefer DuckDuckGo's SERP UI over Google's and really like the !bang searches. I only need to use Google (!g) when looking for some very technical or recently-crawled pages.
The current search market is ~4.6 billion searches per day. Google owns about 75% of the market, with ~3.5 billion searches per day. DuckDuckGo has about 12 million searches per day, ~0.25% of the market. Bing/Yahoo are the other big players in the search market, with between ~10-12% each.
I get 70% as many readers to my blog from duckduckgo as bing (and 3x yahoo), so I imagine they are well positioned to get a boost from tech people recommending it to their families.
Right, those recommendations would've helped with Google's swift uptake. I remember advocating Google to everyone and they were hesitant to try but gave it ago because I was a considered a 'tech head' they trusted my recommendation.
If technology people start to prefer DuckDuckGo things may shift quickly.
If technology people start to prefer DuckDuckGo things may shift quickly.
How did they miss earnings, after buying back $2.3B of stock in Q1?
Total market capitalization is roughly $500 billion. So buying back $2.3 billion of shares only shrinks the number of shares by less than 0.5%. That improves EPS by all of about 3 cents. Not enough to matter.
The two are unrelated. They could spend all their cash on buybacks and the earnings would be the same.
Earnings are reported per share so stock buybacks are actually a pretty common way to make earnings look better. Of course, it doesn't change the total earnings but the number reported by techcrunch would indeed change.
The analysts making EPS estimates know about the buybacks too and increase the EPS to compensate.
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By earnings I meant EPS
Miss is relative to the analysts expectations.
Stock buyback is not revenue.
> The company posted earnings of $7.50 on revenue of $20.26 billion, while analysts were expecting earnings of $7.96 on revenue of $20.38 billion.
I'm assuming they mean 7.5 billion, and 7.96 billion respectively but if they aren't then it seems that they should check the couches in the offices.
I'm assuming they mean 7.5 billion, and 7.96 billion respectively but if they aren't then it seems that they should check the couches in the offices.
No, it's EPS (earnings per share).
Earning per share....
Thanks. I'm not that up on how things like this are usually reported, so it looked odd to me.
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Oh no, they only brought in the GDP of the country of Nepal.
Fire everyone.
Fire everyone.
It's interesting to see how Google, a company that has arguably some of the best engineers in the world and the most brilliant technologists, still only makes a decent revenue on online ads. All of their other startups are losing money.
Google had $75 billion in revenue in 2015 with $16 billion net income. They are a 17 year old company. I think that's a lot better than "decent".
Why, you're right - somehow another $20b a quarter business has eluded them! They're normally just all over the place, I have a few in my couch at home. So weird.
And yeah, all those other 'bets' - losing money. New things are usually immediately hugely profitable, and even thinking about trying something that doesnt make huge bank right out the gate makes 0 sense.
This is in stark contrast to winning companies such as Microsoft, Intel, AT&T, Exxon (and any other oil company), which have all figured out how to get those $80b/year businesses bootstrapped, not to mention who have significantly diversified their revenue from their original business lines!
And yeah, all those other 'bets' - losing money. New things are usually immediately hugely profitable, and even thinking about trying something that doesnt make huge bank right out the gate makes 0 sense.
This is in stark contrast to winning companies such as Microsoft, Intel, AT&T, Exxon (and any other oil company), which have all figured out how to get those $80b/year businesses bootstrapped, not to mention who have significantly diversified their revenue from their original business lines!
> not to mention who have significantly diversified their revenue from their original business lines
Both Microsoft and Intel very successfully diversified their businesses at various times. I'm not sure you could have named two other tech giants that did a better job of diversifying away from their original product lines (which was not Windows for Microsoft, and was not microprocessors for Intel).
Microsoft didn't start out as an operating system company, they diversified into that business. Then they successfully diversified all over again. Windows dominated Microsoft's business for about 15-18 years. That's no longer the case. All profit from Windows could go away tomorrow and they would still be earning around $15 billion per year in net income. They're now a heavily diversified technology conglomerate.
Intel was a business initially built on memory chips, which were their first products. They did an extremely good job of diversifying; had they not they would have disappeared with the memory business.
"While Intel created the first commercially available microprocessor (Intel 4004) in 1971 and one of the first microcomputers in 1972, by the early 1980s its business was dominated by dynamic random-access memory chips."
https://en.wikipedia.org/wiki/Intel
Both Microsoft and Intel very successfully diversified their businesses at various times. I'm not sure you could have named two other tech giants that did a better job of diversifying away from their original product lines (which was not Windows for Microsoft, and was not microprocessors for Intel).
Microsoft didn't start out as an operating system company, they diversified into that business. Then they successfully diversified all over again. Windows dominated Microsoft's business for about 15-18 years. That's no longer the case. All profit from Windows could go away tomorrow and they would still be earning around $15 billion per year in net income. They're now a heavily diversified technology conglomerate.
Intel was a business initially built on memory chips, which were their first products. They did an extremely good job of diversifying; had they not they would have disappeared with the memory business.
"While Intel created the first commercially available microprocessor (Intel 4004) in 1971 and one of the first microcomputers in 1972, by the early 1980s its business was dominated by dynamic random-access memory chips."
https://en.wikipedia.org/wiki/Intel
I assume you're being sarcastic, but Microsoft has done a pretty good job diversifying. Office, Windows, Azure, SQL, Surface, Xbox, even Bing contribute significantly to the bottom line.
and every single one of those was profitable from day 1!
* US ad blocking grew by 48% to reach 45 million active users in 12 months up to June 2015.
* Ad blocking grew by 41% globally in the last 12 months.
* US ad blocking grew by 48% to reach 45 million active users in 12 months up to June 2015.
[1] https://blog.pagefair.com/2015/ad-blocking-report/