31 ms·

Google, in Rare Stumble, Posts 23% Decline in Profit

145 points by mitchbob 7y ago

m23khan 7y ago
well they have had an amazing run since 2001 - and during that time, they have grown to be a huge enterprise comprising of all services under the Google brand plus others such as Youtube. Extending into OS, some hardware, etc. Still, 23% is a big decline so lets see how they fare from now onwards.
xorand 7y ago
Wait, they spent extra $30 billions in a quarter for research, development and marketing? "Alphabet reported that its revenue rose 20 percent to $40.5 billion for the third quarter, but that profit dropped to $7.07 billion. Profit, which missed Wall Street forecasts, was hurt by rising costs for research and development and marketing, the company said."
- deleted 7y ago
  [deleted]
- skinnymuch 7y ago
  They have many other expenses outside R&D. Their profit dropped 23% according to article. They were never doing $37B in profit a quarter.
jfoster 7y ago
So, what exactly did they spend the gap on? Must be interesting.
rch 7y ago
> Alphabet reported that its revenue rose 20 percent to $40.5 billion for the third quarter, but that profit dropped to $7.07 billion. Profit ... was hurt by rising costs for research and development and marketing, the company said. > Google is spending heavily to hire employees, invest in data centers and pay for marketing of new products like its Pixel smartphones. > Alphabet said it added about 6,500 employees in the quarter, for a total work force of about 114,000 people. > The company also said its tax rate doubled to 18 percent from 9 percent a year ago.
- mywittyname 7y ago
  > The company also said its tax rate doubled to 18 percent from 9 percent a year ago. The article should have expanded on this...why did their tax rate go up if R&D and CapEx increased?
tanilama 7y ago
Guess cost cutting is coming to the research sector. Too bad Google's research sector is actually pretty inspiring.
s3r3nity 7y ago
They also wrote off > $1bn in losses in Uber & Lyft investments - which I was surprised to hear that they were invested in both.
- darkwizard42 7y ago
  I believe Google Capital invested in Uber and then CapitalG invested in Lyft. So, still in the umbrella of Alphabet.
ErikAugust 7y ago
For the paywall: https://beta.trimread.com/articles/311 https://beta.trimread.com/articles/311
pgt 7y ago
Following Google's [ad-blocking restrictions](https://news.ycombinator.com/item?id=20044430 https://news.ycombinator.com/item?id=20044430), I switched from Chrome to Firefox and from Google Search to DuckDuckGo. It's been great so far, browsing in incognito mode by default. Gmail and Docs has been the hardest addiction to kick so far, but I've heard good things about Fastmail. More friends are following suit. It may seem like we developers are in the minority, but the minority rule applies to us: tastemakers make the apps that run in your browser and you install Firefox on your parents' machines at thanksgiving. Windows 10's forced-updates and telemetry are the main things preventing me from buying a Surface for my next machine. But I don't know how I'm going to get off my iPhone - the CPU is just too fast. Remember, you are the market. You can vote with your eyeballs and your employment. Giving up salary is easier said than done, but no other profession has more opportunities to choose a moral employer.
- bufferoverflow 7y ago
  You can turn off Windows telemetry. Forced updates is a good thing. We want fast updates when a vulnerability is found. We see so many unpatched servers online getting pwnd and enslaved into botnets, and this is the only solution.
  - morrbo 7y ago
    I'd prefer to manage my server myself. But thanks for your input about randomly rebooting my server and losing work being "the only solution". Also you can't fully disable telemetry. Even in server 2016 with sconfig you can set it to not be fully off. On windows 10 home edition I don't believe you really have the option without resorting to stuff like shutup10. Honestly your line of thinking is dangerous and misinformed.
    - mips_avatar 7y ago
      You can use a raspberry pi or a configurable router to grab telemetry packets and kill them. Also you honestly want to take the quality updates (security and minor bug fixes) every day someone figures out a new intel exploit and you really want to get the patches to fix those. The feature updates take forever but Microsoft announced they will only push a feature update once your OS is approaching EOS.
tudorw 7y ago
Perhaps they should pay more attention to their core, I see their search product as lacking vision, dated and misaligned with the needs of the user.
- cschmidt 7y ago
  I've become fed up with Google search results lately. They very clearly want to provide me with an "answer" that keeps me on Google, rather than sending me away to the website I'm looking for. I've switched to DDG.
- hn_throwaway_99 7y ago
  I feel like Google Search is barely usable without UBlock Origin. The first page and a half is often ads now, with organic results getting pushed further and further down. This really highlights the true problem of monopoly - even Google itself had much better UI in the early/mid aughts before they had really demolished all competition, now that they are the monopoly it's how can we just squeeze more ad dollars out of each and every search result.
  - pmoriarty 7y ago
    It's ironic that Google search has wound up looking very much like AltaVista did back around 2000 when Google first showed up and ate their lunch because they were able to provide a fast and lean search experience, with no ads!
- garganzol 7y ago
  Not only lacking, but it is degraded from what we had 7 years ago. Back in the days I used to tweak search query a bit and was getting different results. Now when one tweaks a query, they get the same results over and over again, thus rendering any search attempts useless.
  - sylvinus 7y ago
    To be fair, you have to consider that the size of the web has continued to increase exponentially during the past 7 years, plus all the SEO tactics that are getting complex as the stakes are raised. Not an excuse to have a degraded service, but the challenge of just maintaining quality is huge.
nestorD 7y ago
"after a sharp increase in spending for research and development"
- Medicalidiot 7y ago
  I feel like this is good for Google in the long term. I remember when their new CFO took charge a couple years back, she cut a lot of "excess" to make it more profitable, but some of the Google flavor is allowing employees to mess around on pet projects. Gmail is easily the best example of that.
- stelfer 7y ago
  It's important to understand that there's a difference between "R&D" as it lives in most people's minds here, and "R&D" as it presents in financial reporting. The former is associated with hiring PhD's and building labs. The latter is everything not covered by cost of sales. Different companies balance the buckets in different ways at different times. And there are many activities that fall under the latter that most would not associate with the former. Companies that make staples report R&D on their financials too. And companies that fund AI also do a lot of R&D that looks the R&D that goes into making staples.
  - dredmorbius 7y ago
    So are we talking more A/B testing and less qubit development (or other moonshot projects)?
- ekianjo 7y ago
  But NYT only understands a single variable when it comes to make clickbaity headlines.
- etiam 7y ago
  Interesting isn't it? The most exciting option seems to me if something they were trying to do proved to work well enough that they went on to much heavier investment to seize the opportunity. (Beta-bet?)
- jacques_chester 7y ago
ycombonator 7y ago
Firefox is smooth as butter on Mac OS with their latest update. Add unlock origin with default settings and privacy badger. It’s web the way it was intended to be!
mattrp 7y ago
And now we know the real reason for the quantum supremacy paper that wasn’t...

145 points by mitchbob 7y ago

well they have had an amazing run since 2001 - and during that time, they have grown to be a huge enterprise comprising of all services under the Google brand plus others such as Youtube. Extending into OS, some hardware, etc. Still, 23% is a big decline so lets see how they fare from now onwards.

xorand 7y ago

Wait, they spent extra $30 billions in a quarter for research, development and marketing? "Alphabet reported that its revenue rose 20 percent to $40.5 billion for the third quarter, but that profit dropped to $7.07 billion. Profit, which missed Wall Street forecasts, was hurt by rising costs for research and development and marketing, the company said."

deleted 7y ago
[deleted]
skinnymuch 7y ago
They have many other expenses outside R&D. Their profit dropped 23% according to article. They were never doing $37B in profit a quarter.

jfoster 7y ago

So, what exactly did they spend the gap on? Must be interesting.

rch 7y ago

> Alphabet reported that its revenue rose 20 percent to $40.5 billion for the third quarter, but that profit dropped to $7.07 billion. Profit ... was hurt by rising costs for research and development and marketing, the company said. > Google is spending heavily to hire employees, invest in data centers and pay for marketing of new products like its Pixel smartphones. > Alphabet said it added about 6,500 employees in the quarter, for a total work force of about 114,000 people. > The company also said its tax rate doubled to 18 percent from 9 percent a year ago.

mywittyname 7y ago
> The company also said its tax rate doubled to 18 percent from 9 percent a year ago. The article should have expanded on this...why did their tax rate go up if R&D and CapEx increased?

tanilama 7y ago

Guess cost cutting is coming to the research sector. Too bad Google's research sector is actually pretty inspiring.

s3r3nity 7y ago

They also wrote off > $1bn in losses in Uber & Lyft investments - which I was surprised to hear that they were invested in both.

darkwizard42 7y ago
I believe Google Capital invested in Uber and then CapitalG invested in Lyft. So, still in the umbrella of Alphabet.

ErikAugust 7y ago

For the paywall: https://beta.trimread.com/articles/311 https://beta.trimread.com/articles/311

pgt 7y ago

Following Google's [ad-blocking restrictions](https://news.ycombinator.com/item?id=20044430 https://news.ycombinator.com/item?id=20044430), I switched from Chrome to Firefox and from Google Search to DuckDuckGo. It's been great so far, browsing in incognito mode by default. Gmail and Docs has been the hardest addiction to kick so far, but I've heard good things about Fastmail. More friends are following suit. It may seem like we developers are in the minority, but the minority rule applies to us: tastemakers make the apps that run in your browser and you install Firefox on your parents' machines at thanksgiving. Windows 10's forced-updates and telemetry are the main things preventing me from buying a Surface for my next machine. But I don't know how I'm going to get off my iPhone - the CPU is just too fast. Remember, you are the market. You can vote with your eyeballs and your employment. Giving up salary is easier said than done, but no other profession has more opportunities to choose a moral employer.

bufferoverflow 7y ago
You can turn off Windows telemetry. Forced updates is a good thing. We want fast updates when a vulnerability is found. We see so many unpatched servers online getting pwnd and enslaved into botnets, and this is the only solution.
- morrbo 7y ago
  I'd prefer to manage my server myself. But thanks for your input about randomly rebooting my server and losing work being "the only solution". Also you can't fully disable telemetry. Even in server 2016 with sconfig you can set it to not be fully off. On windows 10 home edition I don't believe you really have the option without resorting to stuff like shutup10. Honestly your line of thinking is dangerous and misinformed.
  - mips_avatar 7y ago
    You can use a raspberry pi or a configurable router to grab telemetry packets and kill them. Also you honestly want to take the quality updates (security and minor bug fixes) every day someone figures out a new intel exploit and you really want to get the patches to fix those. The feature updates take forever but Microsoft announced they will only push a feature update once your OS is approaching EOS.

tudorw 7y ago

Perhaps they should pay more attention to their core, I see their search product as lacking vision, dated and misaligned with the needs of the user.

cschmidt 7y ago
I've become fed up with Google search results lately. They very clearly want to provide me with an "answer" that keeps me on Google, rather than sending me away to the website I'm looking for. I've switched to DDG.
hn_throwaway_99 7y ago
I feel like Google Search is barely usable without UBlock Origin. The first page and a half is often ads now, with organic results getting pushed further and further down. This really highlights the true problem of monopoly - even Google itself had much better UI in the early/mid aughts before they had really demolished all competition, now that they are the monopoly it's how can we just squeeze more ad dollars out of each and every search result.
- pmoriarty 7y ago
  It's ironic that Google search has wound up looking very much like AltaVista did back around 2000 when Google first showed up and ate their lunch because they were able to provide a fast and lean search experience, with no ads!
garganzol 7y ago
Not only lacking, but it is degraded from what we had 7 years ago. Back in the days I used to tweak search query a bit and was getting different results. Now when one tweaks a query, they get the same results over and over again, thus rendering any search attempts useless.
- sylvinus 7y ago
  To be fair, you have to consider that the size of the web has continued to increase exponentially during the past 7 years, plus all the SEO tactics that are getting complex as the stakes are raised. Not an excuse to have a degraded service, but the challenge of just maintaining quality is huge.

nestorD 7y ago

"after a sharp increase in spending for research and development"

Medicalidiot 7y ago
I feel like this is good for Google in the long term. I remember when their new CFO took charge a couple years back, she cut a lot of "excess" to make it more profitable, but some of the Google flavor is allowing employees to mess around on pet projects. Gmail is easily the best example of that.
stelfer 7y ago
It's important to understand that there's a difference between "R&D" as it lives in most people's minds here, and "R&D" as it presents in financial reporting. The former is associated with hiring PhD's and building labs. The latter is everything not covered by cost of sales. Different companies balance the buckets in different ways at different times. And there are many activities that fall under the latter that most would not associate with the former. Companies that make staples report R&D on their financials too. And companies that fund AI also do a lot of R&D that looks the R&D that goes into making staples.
- dredmorbius 7y ago
  So are we talking more A/B testing and less qubit development (or other moonshot projects)?
ekianjo 7y ago
But NYT only understands a single variable when it comes to make clickbaity headlines.
etiam 7y ago
Interesting isn't it? The most exciting option seems to me if something they were trying to do proved to work well enough that they went on to much heavier investment to seize the opportunity. (Beta-bet?)
jacques_chester 7y ago

ycombonator 7y ago

Firefox is smooth as butter on Mac OS with their latest update. Add unlock origin with default settings and privacy badger. It’s web the way it was intended to be!

mattrp 7y ago

And now we know the real reason for the quantum supremacy paper that wasn’t...