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Alphabet Announces Second Quarter 2018 Results [pdf]
- tozeur 8y ago$5B in EU fines. Ouch.
- nugget 8y agoI don't think they care as much about the fine as they do about potential changes to their business models being imposed on them going forward.
- samfisher83 8y agoIt hurt, but they still made 3 bil. If they have to pay 5 billion once a year to ensure they have a monopoly I don't that that is a bad trade for them.
- adventured 8y agoParticularly with a 20%+ growth rate and their pile of cash. An annual $5 billion EU envy tax is already meaningless. The EU can't stop the US tech machine from continuing to expand, it's already too late. While they focus on fines and hold a defensive posture, the US companies are consuming the planet ex China.
- pineaux 8y agoIt's still very possible for nations to block out companies. China does it with great succes and as a result they have created their own safe hatchery for applications and hardware to grow strong before jumping into the global market, which is just 6x bigger anyway...
- zaarn 8y agoThe EU will def not sit idly by and hand out 4 billion € fines if it doesn't hurt, the current one was only about 40% of the legal maximum they could have handed out (ie, about 10 billion €), and if Google doesn't play ball they'll get out the big toys.
- Flammy 8y ago> If they have to pay 5 billion once a year to ensure they have a monopoly I don't that is a bad trade for them. That exact logic/approach is why we're seeing larger are larger fines, EU basically saying 'shape up, you can't ignore us.'
- amelius 8y agoIt may become worthwhile to spend on the order of $1B on lobbying though.
- candiodari 8y agoAnd legal. Are either of those fines final yet ? But I find for both of those fines the stated reason from the EU very hard to believe. Does anyone miss "shopping comparison sites" ? I sure as hell don't ... And the android search choice ? Really ? None of the other search engines support google assistant, and that's the only searching I do on android. Presumably that would never work without close collaboration between all search engines, and ... that's just not going to happen. Nor does iPhone allow you to switch search providers (nor, for that matter, does the redmi or even the amazon phone), so ... hmmm ... both of these "anti competitive actions" are really the norm in the marketplace. If firefox starts coming with an actually good "mozilla assistant" (Mozique ? heh), then perhaps we can start talking about this.
- microdrum 8y agoYou're right. Only one entity can take their monopoly away: the U.S. Department of Justice. The fine is just a fine.
- megaremote 8y agoThe fines are going to keep getting larger though.
- 394549 8y ago> It hurt, but they still made 3 bil. If they have to pay 5 billion once a year to ensure they have a monopoly I don't that that is a bad trade for them. Why would the fine be annual? Fines aren't a tax you pay so you can continuously break the law. I would imagine if Google doesn't remedy the specific behaviors the EU has issues with, the EU will move on to more severe sanctions.
- lazharichir 8y agoStrong headcount growth versus other FANG-like companies.
- AznHisoka 8y agoIs that something that's usually rewarded by Wall Street? I would think being more efficient (ie. making more money with less employees) would be viewed as more successful.
- lazharichir 8y agoMay show, especially with such a strong company, intended growth and development within new territories which in turn, can mean new opportunities (Cloud, Waymo, etc.)
- albertgoeswoof 8y agoYes it is, people are an asset in a growth company and not a liability. The ability for Alphabet to survive is to continue to innovate and go into new areas, and that always needs more, new, people. Also if Google has X % of the top new grads joining that’s X % who aren’t joining their competitors etc
- rimliu 8y agoThere is a principle (some claim it holds true in pretty much every case) that in a company of N people only square root of N are doing all the work. So if you are a 4 person company you need to hire 12 more to double your output. if you are a company with 10 000 employees you will need to hire 30 000 more to double your output :)
- olliej 8y agoDumb question I’m too lazy to effectively google: what is FANG? (Assuming we’re not talking vampires)
- tonysdg 8y agoFacebook, Amazon, Netflix, Google
- mudil 8y agoMass surveillance of billions of people pays off handsomely. Google and Facebook are the only two businesses that prosper on ads, while your local newspapers, specialized websites, and journalism in general are dying.
- TekMol 8y agoI'm not sure it's the surveillance that makes Google earn so much. I would think the main reason is that search traffic is so valuable to advertisers.
- mudil 8y agoTheir whole business model is a targeting advertisement, and targeting comes from the snooping: what you do, what you eat, what you read, where you are.
- TekMol 8y agoNot true. Their main business is auctioning off ads on their search result pages. That auction is mostly keyword-based and not interest-based.
- bitmapbrother 8y agoI think you're confused. Google generates the majority of their revenue from ad targeting. Snooping and spying are performed by your government and paid for by your tax dollars.
- corv 8y agoNot only web searches. Tracking Google Maps journeys, YouTube, Google Analytics across most of the web, a major portion of global email communications, Hangouts, Google Drive, etc, the list goes on and on. Immensely valuable data that is able to predict trends and behaviour of both businesses and people in many instances
- sctb 8y agoYou've been posting mainly inflammatory comments about Google and Facebook. Could you please try switching it up? > Please don't use Hacker News primarily for political or ideological battle. This destroys intellectual curiosity, so we ban accounts that do it. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- MarkMc 8y ago26% revenue growth for such a large company is astounding. Google's growth machine seems to have lasted much longer than people expected.
- lazharichir 8y agoYep, and they are doing their thing in new territories, with their stronghold (ad) still going up, and technology changing allows for even further opportunities there (voice, home, and so on).
- DEADBEEFC0FFEE 8y agoAd delivery still has some optimising opportunities, so still grow to be had there. Better ad placement means more valuable ads.
- panarky 8y ago26% is a crazy high growth rate for a company with 89,000 employees. Even more amazing is that it's actually accelerating: Q2 2018 vs. 2017 +26% Q2 2017 vs. 2016 +21% Q2 2016 vs. 2015 +21% Q2 2015 vs. 2014 +11% Q2 2014 vs. 2013 +21% Q2 2013 vs. 2012 +11% I don't think I've ever seen this with another big company. Truly astounding.
- Johnie 8y agoPatrick Pichette always had a saying internally that 20% is the magic number. If you can keep growing 20% YoY, investors will let you do whatever you want.
- std_throwaway 8y agoI fear the times when they can't achieve those 20% and the winds start to change massively.
- zjaffee 8y agoI think a big part of it is how over the past few years, the internet has truly gone mainstream in a way that it hadn't prior, namely the ad spend online, is starting to catch up with the time spent online as compared to other platforms such as TV, print, ect.
- tequila_shot 8y agoHonest question: First time reading quarter results. How do I interpret these results?
- deleted 8y ago[deleted]
- jacques_chester 8y agoRevenue: sales recorded. This might or might not represent cash coming through the door in this quarter, but it represents that there is an agreement for cash and goods/services to change hands. Operating income: Money left over after you subtract the costs of operating the business and making the sale. In a manufacturing firm, for example, you would subtract the cost of the materials in the goods sold. For Google they are deducting things like the running costs of data centres and wages for staff. Operating margin: You can think of this as raw profitability. Given the things management has direct, somewhat immediate control over, how good is the company at taking in more money than they spend? Net income: Take the Operating Income and then subtract taxes, interest payments, depreciation of assets and the like. These are all expenses, but not expenses directly connected to current activities. In the rest of the figures they give metrics that are intended to help analysts understand the dynamics of the business that lead to the financials. So for example they showed how different categories contribute to the bottom line. They also show headcount, which can be seen as a leading signal of intention and ability to grow the business. That operating income has grown even with a very large headcount growth is impressive. ---- I am not a lawyer, accountant or financial advisor, don't rely on this as professional or investment advice.
- fermienrico 8y agoI’ve always wondered this - why do internet comments have to explicitly say “I’m not a lawyer and this is not a legal advice”? I think that it’s pretty obvious and needless. What’s the consequence of not having a disclaimer? Internet has a lot of noise and it is the responsibility of the reader. I never understood why people have to say this. Same goes for “I am not a Doctor”. Are there any legal ramifications to: A) Comment has legal terminology and kind of sounds like legal advice but has no disclaimer. B) What if someone falsefully claims they’re a Lawyer and puts out a comment on the internet? I am bothered by this since the dawn of the internet and never understood it.
- MaysonL 8y agoInterestingly, they found it necessary to present income with and without including 2017's $2.7B and 2018's $5B in fines.
- theDoug 8y agoNot speaking for my employer, and only an highly amateur accountant. I believe this is done because the appeals process is not yet final. As to whether they "found it necessary," it may be a requirement, or to frame expectations into future quarters when inevitably these numbers finally persist or reverse.
- megaremote 8y agoWell, they always highlight one off charges, it is very common.
- todipa 8y agoFines are becoming a common expense, they should list them as a cost of doing business. They aren't tax deductible for US purposes so you are taxed on pre-fine income.
- projektfu 8y agoPerhaps they should take a quarterly charge in anticipation of future fines.
- breakupgoogle 8y agoRight, then set the fines at double that. With a minimum. DO wish US regulators would wake up at some point, but their bribes (sorry, lobbying dollars) are paid on time.
- ChuckMcM 8y agoAnyone else notice that both the operating margin was down 2 points and other bets capex was down 10x?
- puzzle 8y agoNest now being part of Google might explain the latter? If that's the case, one wonders where all the new revenue for Other bets comes from.
- philipodonnell 8y agoRevenue up 26% YOY (good but expected). Big one for me is advertising segment revenue as % of total segment revenue, down to 86.3% from 87.4%, which is good, they have got to diversify away from ads eventually. Disappointing to see the "other bets" still at a paltry $145M and losses are growing faster. Also no mentioned whatsoever of cloud performance. Employee count up 15% but < NI growth. (does anyone know if this includes temporary staffing for things like streetview drivers?) Wow, that was a big fine though.
- lazharichir 8y agoAs a user of GCP, they are moving with new useful products every few weeks. And it's a lot clearer as an offering than the top competitor. Perhaps fewer settings, but much easier to get your head around it. A lot of developers use it as a go-to, let's see how companies react over the next years. And Google Cloud Next '18 from tomorrow, so surely few announcements to come.
- mathattack 8y agoAre you an individual user or corporate? Their reputation for large enterprises has been not enough handholding to accompany the complexity. (Relative to IBM/AWS/Oracle) I’m curious about your experience.
- topicseed 8y agoBoth, but small company. But I agree with you, although thry are slowly attracting very large accounts — thanks to discounts surely, but at least they get some names, which will get some names as ROI. Well worth the huge discounts, if it all pans out.
- mathattack 8y agoI assume over the long haul they will be the low cost producer. They need to learn to sell and support in a higher touch manner to bring in the large corporates.
- JumpCrisscross 8y agoHad to chuckle at their breaking out earnings into "including fines" and "excluding fines" categories.
- jacques_chester 8y agoIt's intended to show an underlying trend of continued growth. That's the story they want Wall St to absorb.
- JumpCrisscross 8y ago> an underlying trend of continued growth I understand the reasoning, and frankly agree with it. It's just funny. I don't remember banks, post-crisis, breaking their numbers out so overtly. Usually it was "less one-time charges" or something similarly circuitous.
- jacques_chester 8y agoThis is sort of why GAAP and IFRS are constantly-evolving reporting standards: companies always want to present the best-possible version of events and investors always want to know the bad news.
- acchow 8y agoIf they continue their behavior, we would expect fines to continue growth as well.
- whatyoucantsay 8y agoIt is showing an underlying trend of continued growth, but the sharpest growth segment is that of the fines! The growth in fines will likely continue, given their sheer size and the GDPR. YouTube's continued movement away from being a "dumb pipe" and towards a curatorial role may also become a point of regulatory concern.
- ironfootnz 8y agoSuch an amazing grown rate. I'm speechless.
- gravity_123 8y agoEvery quarter they hire ~4000 employees, majority of them engineers and product managers. In q3 they expect even more due to new grads joining. Does anyone know how this looks compared to other big companies like amazon,microsoft,facebook, etc?
- mrep 8y agoAmazon, Microsoft, and Google have all been hiring crazy amounts of people for the cloud as it is growing so fast.
- module0000 8y agoAlphabet earnings caused all-time-highs to be set(again) on the NQ immediately upon their release. The Nasdaq is in defying-reality territory currently. Exciting times for futures traders.
- lgleason 8y agoInteresting. If you look at the Operating income with fines they are actually down from last year. If you look at it without fines it's 14% growth... Given the increased scrutiny and the regulatory headwinds I think the with fines is probably a more accurate number. If you want to split it you could call it stagnant. They are hiring a lot of people, but from from I've heard and seen the hiring standards have been reduced from what they used to be. A lot of the spending is to make Wall Street think they have something beyond search but it is still the cash cow the keeps it going...
- mooreds 8y agoWould love to have seen the breakout between different types of advertising.