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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 t
by tommoor 11y ago
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 :)
- adventured 11y agoThey 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.
- omarchowdhury 11y agoAdvertising will just change form.
- diffraction 11y agoI 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.
- empath75 11y agoThat would bring an antitrust lawsuit against them pretty quickly, I think.
- newjersey 11y agoThis is probably the worst thing about being influential and/or wealthy. Nobody would sue opera if they did it.
- thedufer 11y agoDoes 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.
- Jordrok 11y agoI agree, but let's be fair here. Porn brings much more value to the world than Taboola and Outbrain could ever hope for.
- partiallypro 11y ago> 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.
- ZeroGravitas 11y agoThis 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.
- wstrange 11y agoCloud. 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.
- empath75 11y agoIf the ads business goes to shit, the cloud business takes a beating, also.
- arthurcolle 11y agoCloud is basically SaaS which is the antithesis of the advertisement model. But okay, I guess you must know better.
- 1123581321 11y agoI 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.
- funkyy 11y agoAnd 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.
- olalonde 11y ago> 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.
- declan 11y agoYup. 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.
- 50CNT 11y agoThought 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.
- f_allwein 11y agoSelf 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.
- prostoalex 11y agoIf 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?
- jfoster 11y agoThe 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.
- semi-extrinsic 11y agoYour 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"?
- home_boi 11y agoAre there ad blockers for mobile? I feel like Google has already solved the ad blocker problem with Android.
- eva1984 11y agoThey just need add google ads into Google Now...that's it. Unless you strip the whole framework, you can not possibly block it.
- dingaling 11y ago> 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.
- mgnacl 11y agoFirefox + ublock origin works fine for me.
- simula67 11y agoCloud 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_quarter/ http://www.theregister.co.uk/2016/01/28/amazons_numbers_for_... [2] http://www.wsj.com/articles/alphabet-reports-rising-profits-at-core-google-businesses-1454361634 http://www.wsj.com/articles/alphabet-reports-rising-profits-... [3] https://en.wikipedia.org/wiki/List_of_Google_products https://en.wikipedia.org/wiki/List_of_Google_products
- alaskamiller 11y agoa) 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.
- mark_l_watson 11y ago+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.
- hibikir 11y agoBusiness 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'
- maxxxxx 11y agoIt 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.
- CydeWeys 11y agoAlphabet 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.
- maxxxxx 11y agoSorry, 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.
- themartorana 11y agoThe 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...
- trhway 11y agoAmazon 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).