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Google and Facebook are propping open the internet advertising door, against the forces of technological progress. Google only controls Chrome so that they can

Google and Facebook are propping open the internet advertising door, against the forces of technological progress. Google only controls Chrome so that they can ensure it never incorporates real ad-blocking. Google controls Firefox by bribing Mozilla with a tiny slice of its advertising winnings. Facebook plays second-fiddle, but has its own influence as the second largest ad network. Larry Page and Mark Zuckerberg are smart and must realize what they're doing is wrong. They must simply not know how to replace their advertising revenue with something legitimate and future proof. In both cases they're (arguably) one-hit wonders. Google is still Google Search and Facebook's social network is still just a social network. You can buy Oculus or clone iOS but if your only plan is to stick ads on everything, you're not making any real progress. They both have a single-point-of-failure in their businesses. I predict this single point is going to fail catastrophically in the surprisingly-near future.

guyzero 9y ago
Advertising as a business is nearly 200 years old. Seems pretty future-proof.
- staunch 9y ago
  1. Internet advertising is 20 years old, which is the business model that is at risk. 2. It doesn't make sense to suggest that the future will be like the past, particularly in the modern world of rapidly accelerating technological progress.
  - Retra 9y ago
    Why would internet advertising be at risk? Are people going to stop looking at media over the internet?
  - hndamien 9y ago
    I personally think Facebook would do well as a crypto bank on an open protocol, rather than their own coin.
- bduerst 9y ago
  Yep. As technology changes, so do the mediums by which advertising takes place (i.e. print -> radio -> TV -> online -> social). As long as there are imperfect markets and unequal distribution of information, there will be advertising. How that advertising is performed will continue to change drastically over time.
quickthrower2 9y ago
Google loves ad blocking: of competitors ads.
bitmapbrother 9y ago
>They both have single-points-of-failure in their businesses. Non-advertising revenue from Google combined with revenue from Verily and the other Alphabet companies was $15.5 billion in 2017, accounting for about 14 percent of total revenue, compared to $10.9 billion, or 12 percent, in 2016. >They both have single-points-of-failure in their businesses. I predict this single point is going to fail catastrophically in the surprisingly-near future. Strange how your predictions of catastrophic failure, in the near future, somehow missed all of the other companies that have single-points-of-failure in their businesses.
- staunch 9y ago
  1. Are you suggesting that Google doesn't have a SPOF? All of their other businesses, which cost hundreds of billions investment to create, generate just ~$15 billion/year in revenue. They will never be ROI positive and if they lost 76% of revenue the company would likely collapse. 2. What other central companies have at-risk anti-technology SPOF business models? Google/Facebook will likely take down the entire internet advertising industry when they fail. What else is like this?
  - bitmapbrother 9y ago
    I very much doubt that Google's other businesses "cost hundreds of billions [of] investment to create". Google also has more than 100+ billion in the bank so they could easily sustain their operations and scale back if that SPOF ever happened. Additionally, they would focus on maximizing their other revenue steams such as Android, Google Cloud Platform, Nest, Waymo, Verily Life Sciences, DeepMind, GV, CapitalG. >What other central companies have at-risk anti-technology SPOF business models? Any other business in which the majority of their profits are dependent on a single revenue stream. It's only the true conglomerates, like Samsung, that could easily react to a SPOF because of how their diversified portfolio of businesses are and non reliant on one core business for their annual revenue.
- jacksmith21006 9y ago
  The difference is ads is a business model versus a product. So say a TV channel only had one popular that would be a concentration. Google not only has search but also has YouTube and I would guess others also contributing.
yourapostasy 9y ago
As long as consumers’ media interaction channels are steadily showing growth on channels that Google et al deliver through, then I expect the SPOF to continue developing into a moat through network effect building. People’s preferences can change very slowly, and choice of media especially for social reasons looks like one of those cases. It is changing rapidly at the margins, but look how many are turning on a TV for the football game this Sunday.

guyzero 9y ago

Advertising as a business is nearly 200 years old. Seems pretty future-proof.

staunch 9y ago
1. Internet advertising is 20 years old, which is the business model that is at risk. 2. It doesn't make sense to suggest that the future will be like the past, particularly in the modern world of rapidly accelerating technological progress.
- Retra 9y ago
  Why would internet advertising be at risk? Are people going to stop looking at media over the internet?
- hndamien 9y ago
  I personally think Facebook would do well as a crypto bank on an open protocol, rather than their own coin.
bduerst 9y ago
Yep. As technology changes, so do the mediums by which advertising takes place (i.e. print -> radio -> TV -> online -> social). As long as there are imperfect markets and unequal distribution of information, there will be advertising. How that advertising is performed will continue to change drastically over time.

quickthrower2 9y ago

Google loves ad blocking: of competitors ads.

bitmapbrother 9y ago

>They both have single-points-of-failure in their businesses. Non-advertising revenue from Google combined with revenue from Verily and the other Alphabet companies was $15.5 billion in 2017, accounting for about 14 percent of total revenue, compared to $10.9 billion, or 12 percent, in 2016. >They both have single-points-of-failure in their businesses. I predict this single point is going to fail catastrophically in the surprisingly-near future. Strange how your predictions of catastrophic failure, in the near future, somehow missed all of the other companies that have single-points-of-failure in their businesses.

staunch 9y ago
1. Are you suggesting that Google doesn't have a SPOF? All of their other businesses, which cost hundreds of billions investment to create, generate just ~$15 billion/year in revenue. They will never be ROI positive and if they lost 76% of revenue the company would likely collapse. 2. What other central companies have at-risk anti-technology SPOF business models? Google/Facebook will likely take down the entire internet advertising industry when they fail. What else is like this?
- bitmapbrother 9y ago
  I very much doubt that Google's other businesses "cost hundreds of billions [of] investment to create". Google also has more than 100+ billion in the bank so they could easily sustain their operations and scale back if that SPOF ever happened. Additionally, they would focus on maximizing their other revenue steams such as Android, Google Cloud Platform, Nest, Waymo, Verily Life Sciences, DeepMind, GV, CapitalG. >What other central companies have at-risk anti-technology SPOF business models? Any other business in which the majority of their profits are dependent on a single revenue stream. It's only the true conglomerates, like Samsung, that could easily react to a SPOF because of how their diversified portfolio of businesses are and non reliant on one core business for their annual revenue.
jacksmith21006 9y ago
The difference is ads is a business model versus a product. So say a TV channel only had one popular that would be a concentration. Google not only has search but also has YouTube and I would guess others also contributing.

yourapostasy 9y ago

As long as consumers’ media interaction channels are steadily showing growth on channels that Google et al deliver through, then I expect the SPOF to continue developing into a moat through network effect building. People’s preferences can change very slowly, and choice of media especially for social reasons looks like one of those cases. It is changing rapidly at the margins, but look how many are turning on a TV for the football game this Sunday.