4 ms·

Well, as I stated above, I believe it unfair and misleadingly reductive to simplify a business down to its monetisation strategy. They are primarily a search c

by adwf 10y ago

Well, as I stated above, I believe it unfair and misleadingly reductive to simplify a business down to its monetisation strategy. They are primarily a search company that makes money from ads. They could probably make money other ways, but not as much. The product is always what people use. There is a simple test for this: Without ads, people would still use search - Google would lose money hand over fist, but people would still use it. Without search on the other hand, no-one is looking at ads. Therefore the product is search. If you are overly reductive about companies you end up talking absurdities. Newspapers are just ad companies. TV shows are just ad companies. Sports teams are just ad companies. Just because the monetisation is indirect, doesn't mean that ads are what they are...

sandworm101 10y ago
>> I believe it unfair and misleadingly reductive to simplify a business down to its monetisation strategy. They are primarily a search company that makes money from ads. Except that Alphabet is publicly traded (GOOGL). They exist for no other reason than to keep shareholders happy. They are a company that makes money. They'd sell chickens if that would turn higher profits. While circuitous at times, every aspect of the company that isn't generating funds only exists to somehow support those that do.
- adwf 10y ago
  That's exactly my point. If you get excessively reductive about any business you essentially boil it down to "they make money". Saying Google is an "ad company" is almost as useless as saying they're a "company". If you want to distinguish their industry from others to analyse them, ie. their products, their method of doing things, their reaction to market conditions, etc. then calling them an ad company helps no-one. You reduce them down from search company -> ad company -> company, to the point where the reduction becomes meaningless. It just serves no purpose to state that they are an advertising company, you could say the same thing about a sports team. Their product is search, the monetisation is ads. Just like no-one is watching their favourite football team for the beer ads, no-one is using search, maps, email or their phone for ads.
- dgacmu 10y ago
  It's really more accurate to say that Google is a company whose goal is, and I quote, "to organize the world's information and make it universally accessible and useful" -- and to do so while being revenue-positive so they can keep operating. This interpretation leads to better predictive value about Google's likely behavior. They probably wouldn't sell chickens. They might well offer subscription / ad free versions of their products (see YouTube red, contributor) to keep the revenue flowing via a different monetization strategy. (They're paying my bills this year but this is purely my opinion from watching the company for a while).
  - sandworm101 10y ago
    Going by the articles that created the company... "The purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. "
    - dgacmu 10y ago
      I know - but that's standard boilerplate verbiage used in almost every company's delaware filings. Again, I think it's worth going by whatever description of the company has the best predictive power. For example, Facebook has exactly the same language in their filing: https://www.sec.gov/Archives/edgar/data/1326801/000119312512175673/d287954dex33.htm https://www.sec.gov/Archives/edgar/data/1326801/000119312512... But it's much more predictive to go by their mission statement, even though facebook too monetizes by ads and has given themselves permission to do anything. "to give people the power to share and make the world more open and connected. " - it's fairly descriptive. Facebook is more likely to buy a messaging app (Whatsapp) that lets people communicate than to sell chickens. I wouldn't call FB an advertising company either, even though 85% of their revenue comes from ... advertising. It's a boring, content-low descriptor that lumps many different companies into the same bin. I suspect that FB, too, if they thought there was money in it, would happily pivot to offering users a paid, ad-free subscription service. In contrast, they probably wouldn't pivot to running ads on billboards.

by adwf 10y ago

sandworm101 10y ago

>> I believe it unfair and misleadingly reductive to simplify a business down to its monetisation strategy. They are primarily a search company that makes money from ads. Except that Alphabet is publicly traded (GOOGL). They exist for no other reason than to keep shareholders happy. They are a company that makes money. They'd sell chickens if that would turn higher profits. While circuitous at times, every aspect of the company that isn't generating funds only exists to somehow support those that do.

adwf 10y ago
That's exactly my point. If you get excessively reductive about any business you essentially boil it down to "they make money". Saying Google is an "ad company" is almost as useless as saying they're a "company". If you want to distinguish their industry from others to analyse them, ie. their products, their method of doing things, their reaction to market conditions, etc. then calling them an ad company helps no-one. You reduce them down from search company -> ad company -> company, to the point where the reduction becomes meaningless. It just serves no purpose to state that they are an advertising company, you could say the same thing about a sports team. Their product is search, the monetisation is ads. Just like no-one is watching their favourite football team for the beer ads, no-one is using search, maps, email or their phone for ads.
dgacmu 10y ago
It's really more accurate to say that Google is a company whose goal is, and I quote, "to organize the world's information and make it universally accessible and useful" -- and to do so while being revenue-positive so they can keep operating. This interpretation leads to better predictive value about Google's likely behavior. They probably wouldn't sell chickens. They might well offer subscription / ad free versions of their products (see YouTube red, contributor) to keep the revenue flowing via a different monetization strategy. (They're paying my bills this year but this is purely my opinion from watching the company for a while).
- sandworm101 10y ago
  Going by the articles that created the company... "The purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. "
  - dgacmu 10y ago
    I know - but that's standard boilerplate verbiage used in almost every company's delaware filings. Again, I think it's worth going by whatever description of the company has the best predictive power. For example, Facebook has exactly the same language in their filing: https://www.sec.gov/Archives/edgar/data/1326801/000119312512175673/d287954dex33.htm https://www.sec.gov/Archives/edgar/data/1326801/000119312512... But it's much more predictive to go by their mission statement, even though facebook too monetizes by ads and has given themselves permission to do anything. "to give people the power to share and make the world more open and connected. " - it's fairly descriptive. Facebook is more likely to buy a messaging app (Whatsapp) that lets people communicate than to sell chickens. I wouldn't call FB an advertising company either, even though 85% of their revenue comes from ... advertising. It's a boring, content-low descriptor that lumps many different companies into the same bin. I suspect that FB, too, if they thought there was money in it, would happily pivot to offering users a paid, ad-free subscription service. In contrast, they probably wouldn't pivot to running ads on billboards.