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But let’s say the spots are actually only worth $10, in terms of the ability to generate revenue. If you sell them to someone else for $20, you win because you
by comex 9y ago
But let’s say the spots are actually only worth $10, in terms of the ability to generate revenue. If you sell them to someone else for $20, you win because you get more money than the slots were worth. If you sell them to yourself for $20, you don’t lose any money and you can still make $10 (which is more than the slots originally cost you).
However, Google claims it is not doing this:
> As part of the change, Google said it would operate its shopping-ad service as if it were a profitable, standalone business to ensure doesn’t overbid for ads.
Still, “profitable” could be by the slimmest of margins, and Google would still have a strong incentive to keep the “standalone” business going (that is, the profit to their other business), whereas an independent company wouldn’t.
- daveFNbuck 9y agoIf you sell them to yourself for $20, you have your original $100, plus the $10 * 5 dollars in ads, for a total of $150. Because $150 is less than $200, this means that diverting the ads to yourself loses you money.