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One split that comes to mind is: 1. Google Search+search ads 2. YouTube 3. Chrome 4. Android 5. Content ads

by aaronbrethorst 7y ago

m0zg 7y ago
Whereupon parts 2 through 5 promptly die out due to insufficient revenue and talent exodus.
- aaronbrethorst 7y ago
  YouTube would be a Fortune 500 company on its own. Mozilla seems to be doing just fine. I'm sure Chrome, Inc. could figure out some way to monetize itself. Android is installed on over 2.5 billion devices worldwide. If they couldn't figure out how to monetize that, then they would have no business being in business. Adsense/Doubleclick/whatever they're calling it right now makes billions of dollars per year. All five parts would be monstrously large, powerful businesses on their own. The fact that they're all smooshed together stifles competition and innovation.
  - m0zg 7y ago
    I kinda doubt YT will be anything if it needs to build and maintain its own infrastructure, run its own datacenters, have its own fiber links, etc. Their cost structure assumes that they get all of those things from Google at a fraction of the cost they'd pay if they had to roll their own or host their stuff in the public cloud. Android could be something, maybe, but if you remove Google's services and AI on the backend it's just a third rate iOS rip-off. Content ads likewise rely on low cost networks, infrastructure, and having everyone's profiles available to them for ads targeting. Remove access to profile and make them fend for themselves, and it's an open question whether they'll survive. I do agree with your last point though: having all these things as a single monolith presents an insurmountable obstacle for other companies to enter the corresponding markets.
    - prepend 7y ago
      I’ve wondered if YouTube could actually build more cheaply using AWS than Google. I don’t think I’ll ever know the answer as it involves super private cost data from Amazon, Google, and Netflix. Traffic stats show YouTube and Netflix [0] pretty close so people are obviously delivering video for profit. [0] https://images.app.goo.gl/AVFevudgSTHhxfM99 https://images.app.goo.gl/AVFevudgSTHhxfM99
      - m0zg 7y ago
        Netflix does not deliver video from AWS, though. They use it to encode and run other infra, but for streaming they use NAS/streaming FreeBSD boxes co-located in ISP datacenters. If they streamed from AWS, Netflix would be out of business already.
        prepend 7y ago
        That’s a good point as the bulk of that transfer isn’t coming from AWS, probably. This still means YouTube doesn’t need google’s infrastructure to stream video.
        m0zg 7y ago
        It does mean a drastically different cost structure, and major difficulties in operating worldwide.
    - fjp 7y ago
      > if you remove Google's services and AI on the backend it's just a third rate iOS rip-off. yes! they would have to improve or die! that's one of the points of anti-monopoly legislation and enforcement
      - aaronbrethorst 7y ago
        Well said. I love it when people unintentionally back into arguments for why a real free market is good by arguing that a not-actually-free market is better.
  - SquareWheel 7y ago
    >Mozilla seems to be doing just fine. They make their money from Google for being the default search provider. Chrome could come to the same deal, but is it really splitting the company up then if they're able to negotiate a deal for big bucks from Google/Alphabet?
  - scarface74 7y ago
    YouTube would be a Fortune 500 company on its own. Every single reliable indicator is that Youtube is still barely profitable. But even then, they make their money from Google ads. Android is installed on over 2.5 billion devices worldwide. If they couldn't figure out how to monetize that, then they would have no business being in business. And it came out in the Oracle trial that Android has only made a $17 billion dollar profit since it existed.
    - aaronbrethorst 7y ago
      Google doesn’t need Android to be incredibly profitable for it to be a strategic asset to their business. In fact, you’re making my point that Google’s monopoly undermines the free market and stifles innovation. If Google had to change a modest fee for Android, I’m sure it would still be hugely popular, rake in billions of dollars more, and provide niches for other competitors to flourish. (Sidebar: I hadn’t seen the “$17 billion profit” figure before. By any reasonable standard, that is a staggering amount of profit.)
      - scarface74 7y ago
        Considering that’s about what Apple makes in one or two quarters of iPhone sales, that type of profit over 7 or 8 years while commanding 3-4x the market share isn’t that great.
Railsify 7y ago
1 generates almost 90% of revenue, the rest of your list are essentially loss leaders.

One split that comes to mind is: 1. Google Search+search ads 2. YouTube 3. Chrome 4. Android 5. Content ads

m0zg 7y ago

Whereupon parts 2 through 5 promptly die out due to insufficient revenue and talent exodus.

aaronbrethorst 7y ago
YouTube would be a Fortune 500 company on its own. Mozilla seems to be doing just fine. I'm sure Chrome, Inc. could figure out some way to monetize itself. Android is installed on over 2.5 billion devices worldwide. If they couldn't figure out how to monetize that, then they would have no business being in business. Adsense/Doubleclick/whatever they're calling it right now makes billions of dollars per year. All five parts would be monstrously large, powerful businesses on their own. The fact that they're all smooshed together stifles competition and innovation.
- m0zg 7y ago
  I kinda doubt YT will be anything if it needs to build and maintain its own infrastructure, run its own datacenters, have its own fiber links, etc. Their cost structure assumes that they get all of those things from Google at a fraction of the cost they'd pay if they had to roll their own or host their stuff in the public cloud. Android could be something, maybe, but if you remove Google's services and AI on the backend it's just a third rate iOS rip-off. Content ads likewise rely on low cost networks, infrastructure, and having everyone's profiles available to them for ads targeting. Remove access to profile and make them fend for themselves, and it's an open question whether they'll survive. I do agree with your last point though: having all these things as a single monolith presents an insurmountable obstacle for other companies to enter the corresponding markets.
  - prepend 7y ago
    I’ve wondered if YouTube could actually build more cheaply using AWS than Google. I don’t think I’ll ever know the answer as it involves super private cost data from Amazon, Google, and Netflix. Traffic stats show YouTube and Netflix [0] pretty close so people are obviously delivering video for profit. [0] https://images.app.goo.gl/AVFevudgSTHhxfM99 https://images.app.goo.gl/AVFevudgSTHhxfM99
    - m0zg 7y ago
      Netflix does not deliver video from AWS, though. They use it to encode and run other infra, but for streaming they use NAS/streaming FreeBSD boxes co-located in ISP datacenters. If they streamed from AWS, Netflix would be out of business already.
      - prepend 7y ago
        That’s a good point as the bulk of that transfer isn’t coming from AWS, probably. This still means YouTube doesn’t need google’s infrastructure to stream video.
        m0zg 7y ago
        It does mean a drastically different cost structure, and major difficulties in operating worldwide.
  - fjp 7y ago
    > if you remove Google's services and AI on the backend it's just a third rate iOS rip-off. yes! they would have to improve or die! that's one of the points of anti-monopoly legislation and enforcement
    - aaronbrethorst 7y ago
      Well said. I love it when people unintentionally back into arguments for why a real free market is good by arguing that a not-actually-free market is better.
- SquareWheel 7y ago
  >Mozilla seems to be doing just fine. They make their money from Google for being the default search provider. Chrome could come to the same deal, but is it really splitting the company up then if they're able to negotiate a deal for big bucks from Google/Alphabet?
- scarface74 7y ago
  YouTube would be a Fortune 500 company on its own. Every single reliable indicator is that Youtube is still barely profitable. But even then, they make their money from Google ads. Android is installed on over 2.5 billion devices worldwide. If they couldn't figure out how to monetize that, then they would have no business being in business. And it came out in the Oracle trial that Android has only made a $17 billion dollar profit since it existed.
  - aaronbrethorst 7y ago
    Google doesn’t need Android to be incredibly profitable for it to be a strategic asset to their business. In fact, you’re making my point that Google’s monopoly undermines the free market and stifles innovation. If Google had to change a modest fee for Android, I’m sure it would still be hugely popular, rake in billions of dollars more, and provide niches for other competitors to flourish. (Sidebar: I hadn’t seen the “$17 billion profit” figure before. By any reasonable standard, that is a staggering amount of profit.)
    - scarface74 7y ago
      Considering that’s about what Apple makes in one or two quarters of iPhone sales, that type of profit over 7 or 8 years while commanding 3-4x the market share isn’t that great.

Railsify 7y ago

1 generates almost 90% of revenue, the rest of your list are essentially loss leaders.