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My understanding is GS is company that wants to "beat the market" meaning someone else in the market is loosing. And Google's goal is to make the worlds inform

My understanding is GS is company that wants to "beat the market" meaning someone else in the market is loosing. And Google's goal is to make the worlds information available to everyone and show them ads. Google seems more like a everyone wins company.

unshift 16y ago
for every dollar of ads google sells, that's a dollar their competitors don't get. they are as cut throat as anybody else, they just do a better job of making computer people feel good about it. ask their sales department if they're an "everyone wins" company.
- jamesseda 16y ago
  If G-mail didn't exist I would use yahoo. G-mail is much better for me though. I win and Google wins. Yahoo looses. If GS gets in front of Citi on a trade by 2 seconds GS wins and Citi looses, no one else is involved. Unless those two seconds of "efficiency" help someone?
  - yummyfajitas 16y ago
    You are assuming all trades are determined by priority, which is false. If GS got there first, but Citi cuts in line by offering a better price, the customer also wins.
rchi 16y ago
The following is from a talk at the New York Public Library. ERIC SCHMIDT: But in fairness to those people[finance people], had they come to Silicon Valley in 1999 they would have received a far greater payoff during our little bubble. So who are we to criticize the Wall Street folks for having their bubble? It was just a bigger bubble. WALTER ISAACSON: Do you think though that Google creates something that’s more real than somebody on Wall Street creating a financial instrument? ERIC SCHMIDT: To be honest, not really. When I walked into the company, I said, “People pay you for this thing, these little ads?” http://www.nypl.org/sites/default/files/events/live_2009_11_03_capitalism_transcript.pdf http://www.nypl.org/sites/default/files/events/live_2009_11_...
- jbooth 16y ago
  Eh, I don't see how candidness and an eagerness to question his own model by Schmidt changes the value proposition at all. Almost all of the time, an ad click is creating value (or a fractional expected value) where there wasn't some before, unless you have a 0% conversion rate. Meanwhile, a huge chunk of Goldman's activity as I understand it is simply taking the "dumb money" on Wall St. Nibbling the edges, taking pieces of trades by less sophisticated investors. That's not necessarily value creation, and much of the time it can be straight extraction from the rest of the economy. Not that ads won't get there of course - they're well on their way already with various exchanges. But presently, they have to actually be creating other economic value via conversions in order to exist.
VolatileVoid 16y ago
Everyone wants to "beat the market." For every dollar McDonalds gets, Burger King is not. For every dollar Microsoft gets, Apple is not. There are no group hugs unless you work for a non-profit (and even then, for every dollar your non-profit gets, some other, equally deserving non-profit is not).
- eru 16y ago
  This sounds like a very zero-sum model. Do you know, that dollars don't get destroyed by spending them? (And that this doesn't even matter, because it's wealth creation that matters (supply) and not demand?)
  - cynicalkane 16y ago
    I think the point of his comment is to see that viewing trade as zero-sum leads to absurdity.
    - jbooth 16y ago
      Certainly, but assuming it can't be zero-sum leads to absurdity as well. What about high frequency trading? Most of it is zero sum, first one to arb the difference wins. The economy doesn't derive any higher value from it if the difference would've been corrected within a couple seconds (or a few minutes) anyways. It's not the same as buying a burger.
      - eru 16y ago
        Oh, if you by a burger and sum the benefit over, say, Burger King and McDonald's it's probably constant. If you sum the benefits of arbitrage over the high frequency traders, it's possible (close to) constant, too. But the rest of the world can still benefit (or perhaps suffer in the case of a burger).
        jbooth 16y ago
        Hm, I think we're talking past each other although I'd like to hear more exposition on your comment because it doesn't really make sense to me. I was talking more from the perspective of someone who's generating cash. Burger King pays suppliers for meat and whatever (or raises cows in their own operation) and you pay them for a burger. You get a burger, they get cash, pay people, value creation all around. In Wall St, on the other hand, theoretically we should see value creation through efficient routing of capital to the right places and the people who make that happen are rewarded for their effort. In practice, I feel, it's often a video game where they manage to nibble a billion little pieces away from the value-based investors who are actually performing an economic function. So in some scenarios, they're a net drain, rather than part of a robust economy. That's where my zero-sum analogy came in. YMMV.

unshift 16y ago

for every dollar of ads google sells, that's a dollar their competitors don't get. they are as cut throat as anybody else, they just do a better job of making computer people feel good about it. ask their sales department if they're an "everyone wins" company.

jamesseda 16y ago
If G-mail didn't exist I would use yahoo. G-mail is much better for me though. I win and Google wins. Yahoo looses. If GS gets in front of Citi on a trade by 2 seconds GS wins and Citi looses, no one else is involved. Unless those two seconds of "efficiency" help someone?
- yummyfajitas 16y ago
  You are assuming all trades are determined by priority, which is false. If GS got there first, but Citi cuts in line by offering a better price, the customer also wins.

rchi 16y ago

The following is from a talk at the New York Public Library. ERIC SCHMIDT: But in fairness to those people[finance people], had they come to Silicon Valley in 1999 they would have received a far greater payoff during our little bubble. So who are we to criticize the Wall Street folks for having their bubble? It was just a bigger bubble. WALTER ISAACSON: Do you think though that Google creates something that’s more real than somebody on Wall Street creating a financial instrument? ERIC SCHMIDT: To be honest, not really. When I walked into the company, I said, “People pay you for this thing, these little ads?” http://www.nypl.org/sites/default/files/events/live_2009_11_03_capitalism_transcript.pdf http://www.nypl.org/sites/default/files/events/live_2009_11_...

jbooth 16y ago
Eh, I don't see how candidness and an eagerness to question his own model by Schmidt changes the value proposition at all. Almost all of the time, an ad click is creating value (or a fractional expected value) where there wasn't some before, unless you have a 0% conversion rate. Meanwhile, a huge chunk of Goldman's activity as I understand it is simply taking the "dumb money" on Wall St. Nibbling the edges, taking pieces of trades by less sophisticated investors. That's not necessarily value creation, and much of the time it can be straight extraction from the rest of the economy. Not that ads won't get there of course - they're well on their way already with various exchanges. But presently, they have to actually be creating other economic value via conversions in order to exist.

VolatileVoid 16y ago

Everyone wants to "beat the market." For every dollar McDonalds gets, Burger King is not. For every dollar Microsoft gets, Apple is not. There are no group hugs unless you work for a non-profit (and even then, for every dollar your non-profit gets, some other, equally deserving non-profit is not).

eru 16y ago
This sounds like a very zero-sum model. Do you know, that dollars don't get destroyed by spending them? (And that this doesn't even matter, because it's wealth creation that matters (supply) and not demand?)
- cynicalkane 16y ago
  I think the point of his comment is to see that viewing trade as zero-sum leads to absurdity.
  - jbooth 16y ago
    Certainly, but assuming it can't be zero-sum leads to absurdity as well. What about high frequency trading? Most of it is zero sum, first one to arb the difference wins. The economy doesn't derive any higher value from it if the difference would've been corrected within a couple seconds (or a few minutes) anyways. It's not the same as buying a burger.
    - eru 16y ago
      Oh, if you by a burger and sum the benefit over, say, Burger King and McDonald's it's probably constant. If you sum the benefits of arbitrage over the high frequency traders, it's possible (close to) constant, too. But the rest of the world can still benefit (or perhaps suffer in the case of a burger).
      - jbooth 16y ago
        Hm, I think we're talking past each other although I'd like to hear more exposition on your comment because it doesn't really make sense to me. I was talking more from the perspective of someone who's generating cash. Burger King pays suppliers for meat and whatever (or raises cows in their own operation) and you pay them for a burger. You get a burger, they get cash, pay people, value creation all around. In Wall St, on the other hand, theoretically we should see value creation through efficient routing of capital to the right places and the people who make that happen are rewarded for their effort. In practice, I feel, it's often a video game where they manage to nibble a billion little pieces away from the value-based investors who are actually performing an economic function. So in some scenarios, they're a net drain, rather than part of a robust economy. That's where my zero-sum analogy came in. YMMV.