4 ms·

As a long term investor, I'm worried with Google. All the bills are paid by ad revenue, a single horse. Then there is this bubble of claims that they have the b

by lalos 8y ago

As a long term investor, I'm worried with Google. All the bills are paid by ad revenue, a single horse. Then there is this bubble of claims that they have the best engineers and work environment yet this has not produced any other business equivalent to the ad business. Then they have a reputation of creating awesome tools that then get killed in years, enterprise customers don't like this unpredictability. Microsoft on the other hand is the master of supporting old platforms, I've seen some really old apps (from the 90s) run on the latest OS's. Enterprise loves this and that is were the money is. The only clear strength I see on Google is that they are masters of advertising and I see how they sell to developers that there way is the way to go. That is a good HR strength since they will always have a pipe of engineers that want to work for them.

bitmapbrother 8y ago
Microsoft's killing of products and services is actually more prolific than Google. In fact, two more products were just killed today (Groove iOS and Groove Android).
oprah2018 8y ago
Imagine how profitable Google (as in the division of Alphabet) would be if they eliminated all the distractions other than the cash cow ad business.
petra 8y ago
Ads are Google's business model, but they make their major money from a few different leading products : Search, ad platform(both internal and external), YouTube, Android.
- staplers 8y ago
  All these Google platforms have lost my decade-long patronage recently due to inability to find what is needed (google thinks it knows me better than myself) and personal-info-commodification.
- nomel 8y ago
  Do you have a reference for these claims? Search and Youtube seem to be ad hosting platforms, and "ad platfom" seems it would be from ads. The Android ad revenue slice seems to be missing from Google.
nostrademons 8y ago
Google's "other revenues" (mostly Cloud and Play) was $14B as of their last 10-K, growing at 40% YoY. That pales in comparison to their advertising revenues, but if you just had an isolated business (not part of Alphabet) with $14B in revenue growing 40%/year, that would be a pretty attractive stock. (For comparison, HP Enterprise has about $28B in revenue with negative growth and is worth $23B. At current growth rates, Alphabet's Cloud segment will surpass HP in revenue in 2-3 years.)
- Eridrus 8y ago
  IIRC Azure is bigger and growing faster than GCP, so valuing MSFT more highly doesn't seem crazy.
derptech 8y ago
Uh, corporate gmail? They have to be making non-ad money off corporate Gsuite products (gmail, calendar, drive:docs/sheets/slides). I've been at companies that have used other forms of internal corporate email, and all of them are worse. Open source/roll-your-own, On-prem Exchange, Cloud-based Office365, what have you... all of them suck.
- devmunchies 8y ago
  lots of companies use google, but I still don't think its even close to their ad revenue. to any curious, you can do `dig example.com MX +short` to see their mail MX records. example: dig stripe.com MX +short
dwoot 8y ago
Interesting. Did you glance at the latest Google I/O? There are a ton of things on the horizon that will continue to keep Google very relevant and generate money. For one, I'd like to point out Waymo. Autonomous transport seems like a pretty big business. From my perspective, Google has the lead in AI right now and it shows in all the products that they're beginning to push out. A lot of engineers work on ads teams. I heard it once before, but search is Google's core. Without search, their ad-serving isn't very profitable. Everything else is a moat around it - Gmail, Drive, Calendar, Chrome. Most media companies are built around the advertising model. I can't say that you're wrong. Enterprise software does generate a lot of revenue and Microsoft does support it fairly well. Microsoft has also had some wins as of late. A lot of Google's revenue comes from ads, but I wouldn't label it a "single horse". It's really a stable of horses if you're counting YouTube #2 most visited site and the other revenues its generating from it's G Suite, people paying for Drive, cloud services, etc. I may be blinded by my bias toward Google products, but it's also crazy that I don't use a single Microsoft product at the moment -- I don't boot my old PC with Windows. I don't own an X-Box. I don't own a Surface. I don't use Word or any of the Office software anymore. I don't use Azure or VS Code as my editor as a software engineer. However, I do know a lot of .NET developers.
- kamaal 8y ago
  >>Enterprise software does generate a lot of revenue Enterprise is just the tip of the iceberg. Almost anybody who can't afford to buy Apple's expensive products(Which is like everybody) has to buy Microsoft. Also with the latest hardware goof ups, the top end customers could be soon going to Microsoft.

by lalos 8y ago

bitmapbrother 8y ago

Microsoft's killing of products and services is actually more prolific than Google. In fact, two more products were just killed today (Groove iOS and Groove Android).

oprah2018 8y ago

Imagine how profitable Google (as in the division of Alphabet) would be if they eliminated all the distractions other than the cash cow ad business.

petra 8y ago

Ads are Google's business model, but they make their major money from a few different leading products : Search, ad platform(both internal and external), YouTube, Android.

staplers 8y ago
All these Google platforms have lost my decade-long patronage recently due to inability to find what is needed (google thinks it knows me better than myself) and personal-info-commodification.
nomel 8y ago
Do you have a reference for these claims? Search and Youtube seem to be ad hosting platforms, and "ad platfom" seems it would be from ads. The Android ad revenue slice seems to be missing from Google.

nostrademons 8y ago

Google's "other revenues" (mostly Cloud and Play) was $14B as of their last 10-K, growing at 40% YoY. That pales in comparison to their advertising revenues, but if you just had an isolated business (not part of Alphabet) with $14B in revenue growing 40%/year, that would be a pretty attractive stock. (For comparison, HP Enterprise has about $28B in revenue with negative growth and is worth $23B. At current growth rates, Alphabet's Cloud segment will surpass HP in revenue in 2-3 years.)

Eridrus 8y ago
IIRC Azure is bigger and growing faster than GCP, so valuing MSFT more highly doesn't seem crazy.

derptech 8y ago

Uh, corporate gmail? They have to be making non-ad money off corporate Gsuite products (gmail, calendar, drive:docs/sheets/slides). I've been at companies that have used other forms of internal corporate email, and all of them are worse. Open source/roll-your-own, On-prem Exchange, Cloud-based Office365, what have you... all of them suck.

devmunchies 8y ago
lots of companies use google, but I still don't think its even close to their ad revenue. to any curious, you can do `dig example.com MX +short` to see their mail MX records. example: dig stripe.com MX +short

dwoot 8y ago

Interesting. Did you glance at the latest Google I/O? There are a ton of things on the horizon that will continue to keep Google very relevant and generate money. For one, I'd like to point out Waymo. Autonomous transport seems like a pretty big business. From my perspective, Google has the lead in AI right now and it shows in all the products that they're beginning to push out. A lot of engineers work on ads teams. I heard it once before, but search is Google's core. Without search, their ad-serving isn't very profitable. Everything else is a moat around it - Gmail, Drive, Calendar, Chrome. Most media companies are built around the advertising model. I can't say that you're wrong. Enterprise software does generate a lot of revenue and Microsoft does support it fairly well. Microsoft has also had some wins as of late. A lot of Google's revenue comes from ads, but I wouldn't label it a "single horse". It's really a stable of horses if you're counting YouTube #2 most visited site and the other revenues its generating from it's G Suite, people paying for Drive, cloud services, etc. I may be blinded by my bias toward Google products, but it's also crazy that I don't use a single Microsoft product at the moment -- I don't boot my old PC with Windows. I don't own an X-Box. I don't own a Surface. I don't use Word or any of the Office software anymore. I don't use Azure or VS Code as my editor as a software engineer. However, I do know a lot of .NET developers.

kamaal 8y ago
>>Enterprise software does generate a lot of revenue Enterprise is just the tip of the iceberg. Almost anybody who can't afford to buy Apple's expensive products(Which is like everybody) has to buy Microsoft. Also with the latest hardware goof ups, the top end customers could be soon going to Microsoft.