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I am really surprised they haven't managed to diversify into one other area properly. I used to think that with the number of smart people they have, it was onl

I am really surprised they haven't managed to diversify into one other area properly. I used to think that with the number of smart people they have, it was only a matter of time before they had a strong revenue stream from other than ads. But seems like they are struggling to do that. I guess one issue is that any new revenue stream looks minuscule when compared to ads revenue and hence gets killed off before it has the chance to establish and grow.

scarface74 6y ago
Let’s compare that to the other big tech companies. Facebook - yeah it’s just a social media company at its core, but before mobile really took off, it made money as a platform for games and shortly after its IPO, everyone thought it was doomed and didn’t get mobile. Between their strong pivot into mobile ads and their very smart acquisitions. Now FB has four platforms - FB, Instagram, Messenger, and WhatsApp that all serve different demographics. Apple. During the time that Google has existed, Apple has gone from making most of its money selling computers, to music players and a music store, phones, and now depending on the quarter, phone sales are less than 50% of revenue. Heck the watch and AirPods are each considered to be larger businesses than the iPods were at its peak. Would Google ever invest in a product that only made up 10% of its revenue? Amazon: (Disclaimer: I work at Amazon). Went from a retail store selling its own stuff, to a marketplace, smart speakers, AWS, Amazon Prime Video, and did a lot of successful acquisitions. Microsoft - It’s basically removed it’s focus from Windows to Azure, Office in every imaginable platform, Sql Server even runs on Linux now, and has a successful gaming division.
- baby 6y ago
  You’re missing oculus and portal for facebook. Hardware stuff.
  - scarface74 6y ago
    Neither are successful and profitable.
    - rock_hard 6y ago
      I think the correct answer is more nuanced
      - scarface74 6y ago
        What’s more nuanced than if a product is successful than does it make money? Of course a product doesn’t have to be profitable on its own if you’re selling razor blades at a loss to sell razors. But neither product is doing that.
    - puranjay 6y ago
      That's more to do with the unviability of VR than Oculus itself. If (rather, when) VR becomes viable, Oculus will be front and center - it has cornered mindshare in the space
      - scarface74 6y ago
        People have been saying that VR was right around the corner since the Virtual Boy in the mid 90s. The console market itself is tiny in the grand scheme of things. The PS4 has only sold 102 million units since inception. The VR market won’t even be that big. In contrast, Apple alone sells that many phones over two quarters
        puranjay 6y ago
        I'm not particularly bearish on VR but it's clear that the technology is far, far more mature than anything in the 90s. Hardware sales are anyhow not quite as important as the software that runs on the hardware. The console market might be small, but the gaming market is absolutely massive. Facebook doesn't have to make money off Oculus hardware of it can, like Sony and Microsoft, get people into the ecosystem where $60 games are the norm and microstransactions total billions in revenue.
        scarface74 6y ago
        How many billions did the Microsoft lose before the division became profitable? I believe the breakdown is that Microsoft makes $7 on each third party physical game and $27 on each first party game. I doubt that Sony and Microsoft makes as much on their consoles as Apple makes selling headphones.
- hn_throwaway_99 6y ago
  I don't really see the difference between Facebook and Google. I mean besides the search engine Google has Android, YouTube, all their ad network stuff (Doubleclick, AdSense, etc.) In fact, the only 2 areas I think Google has really underperformed are: 1. The cloud. I'm a big fan of GCP, and I think in many ways it's easier to use than AWS, but Google still doesn't understand enterprise support and what big business customers value. I think a lot of this is just because Google doesn't have customer support in their DNA, and they had so much custom tech for so long (most big businesses want to use a relational DB, not Datastore). 2. Business applications. I feel like Sheets and Doc should have taken a much bigger chunk out of MS Office revenue than they have, but again enterprise support just isn't in their culture and hence G Suite lags.
  - scarface74 6y ago
    According to information that came out during the Oracle lawsuit, Android had only made Google around $22 Billion in profit from inception through 2016 (https://www.reuters.com/article/us-oracle-google-lawsuit-idUSKCN0UZ2W9 https://www.reuters.com/article/us-oracle-google-lawsuit-idU...). Google pays Apple a reported $8 billion a year to be the default search engine on iOS. Apple makes more on a Google from mobile than Google makes from Android. In other words, all of the money that Google makes from Android isn’t enough to pay Apple for it to be the default search engine. Youtube is still thought you be at best slightly above break even in terms of profitability. What happens to the ad network between ad blocking and businesses keep realizing that you can do better targeting with Facebook?
    - hn_throwaway_99 6y ago
      That $22 billion number (which basically sounds like it was just a number made up from Oracle's lawyers, never confirmed by Google) from the article you posted is definitely not comparing apples-to-apples. I can guarantee that being in control of the world's dominant mobile OS, and all the default Google search engine installs, Google Maps installs, etc. that entails, is worth much more in terms of mobile ad revenue than any directly-attributed OS revenue.
lalos 6y ago
I would assume bad leadership, even Amazon that has reportedly dubious work life balance has been able to pivot/grow but Bezos is able to lead by example and they have a lot of interesting 'ethos'. Then you have cases like Microsoft and Apple which have been around for way longer and have weathered multiple storms and computing eras. Google and Facebook just have ads, have not worked on their trustworthiness (ironically we even see posts about how real/fake are the ad engagements to this date) therefore they are stuck even if they are able to pay the salaries of the so called 'smartest' engineers (who are willing to join a one trick pony company). Microsoft built that trust by maintaining Office for the whole enterprise world (which granted, is a boring endeavor to be fixing bugs that 2-3 companies that use Excel hit but it pays long term dividends) and Apple built that trust by building easy to use consumer products that just work. Disclaimer, mostly talking about revenue streams and not products.
- scarface74 6y ago
  I keep hearing about Amazon’s bad work life balance. I have a friend who worked at Amazon in Seattle on the business side (not software development ) and he said it was brutal. I work remotely on the consulting side. It’s about the same work life balance as I’ve had my entire career. It’s actually better than my last two jobs. At those, I had to be the “adult supervision” trying to overall their processes while juggling releasing a product and for my last job, trying to figure out ways to cut costs and increase efficiencies post Covid. I’m just a much better paid peon now. My experimentations causing a large AWS bill is not exactly a problem now....
rorytbyrne 6y ago
Anyone interested in this concept should read The Innovator's Dilemma. It covers the idea innovation suffocation within big organizations very well and is just an overall fantastic book.

scarface74 6y ago

Let’s compare that to the other big tech companies. Facebook - yeah it’s just a social media company at its core, but before mobile really took off, it made money as a platform for games and shortly after its IPO, everyone thought it was doomed and didn’t get mobile. Between their strong pivot into mobile ads and their very smart acquisitions. Now FB has four platforms - FB, Instagram, Messenger, and WhatsApp that all serve different demographics. Apple. During the time that Google has existed, Apple has gone from making most of its money selling computers, to music players and a music store, phones, and now depending on the quarter, phone sales are less than 50% of revenue. Heck the watch and AirPods are each considered to be larger businesses than the iPods were at its peak. Would Google ever invest in a product that only made up 10% of its revenue? Amazon: (Disclaimer: I work at Amazon). Went from a retail store selling its own stuff, to a marketplace, smart speakers, AWS, Amazon Prime Video, and did a lot of successful acquisitions. Microsoft - It’s basically removed it’s focus from Windows to Azure, Office in every imaginable platform, Sql Server even runs on Linux now, and has a successful gaming division.

baby 6y ago
You’re missing oculus and portal for facebook. Hardware stuff.
- scarface74 6y ago
  Neither are successful and profitable.
  - rock_hard 6y ago
    I think the correct answer is more nuanced
    - scarface74 6y ago
      What’s more nuanced than if a product is successful than does it make money? Of course a product doesn’t have to be profitable on its own if you’re selling razor blades at a loss to sell razors. But neither product is doing that.
  - puranjay 6y ago
    That's more to do with the unviability of VR than Oculus itself. If (rather, when) VR becomes viable, Oculus will be front and center - it has cornered mindshare in the space
    - scarface74 6y ago
      People have been saying that VR was right around the corner since the Virtual Boy in the mid 90s. The console market itself is tiny in the grand scheme of things. The PS4 has only sold 102 million units since inception. The VR market won’t even be that big. In contrast, Apple alone sells that many phones over two quarters
      - puranjay 6y ago
        I'm not particularly bearish on VR but it's clear that the technology is far, far more mature than anything in the 90s. Hardware sales are anyhow not quite as important as the software that runs on the hardware. The console market might be small, but the gaming market is absolutely massive. Facebook doesn't have to make money off Oculus hardware of it can, like Sony and Microsoft, get people into the ecosystem where $60 games are the norm and microstransactions total billions in revenue.
        scarface74 6y ago
        How many billions did the Microsoft lose before the division became profitable? I believe the breakdown is that Microsoft makes $7 on each third party physical game and $27 on each first party game. I doubt that Sony and Microsoft makes as much on their consoles as Apple makes selling headphones.
hn_throwaway_99 6y ago
I don't really see the difference between Facebook and Google. I mean besides the search engine Google has Android, YouTube, all their ad network stuff (Doubleclick, AdSense, etc.) In fact, the only 2 areas I think Google has really underperformed are: 1. The cloud. I'm a big fan of GCP, and I think in many ways it's easier to use than AWS, but Google still doesn't understand enterprise support and what big business customers value. I think a lot of this is just because Google doesn't have customer support in their DNA, and they had so much custom tech for so long (most big businesses want to use a relational DB, not Datastore). 2. Business applications. I feel like Sheets and Doc should have taken a much bigger chunk out of MS Office revenue than they have, but again enterprise support just isn't in their culture and hence G Suite lags.
- scarface74 6y ago
  According to information that came out during the Oracle lawsuit, Android had only made Google around $22 Billion in profit from inception through 2016 (https://www.reuters.com/article/us-oracle-google-lawsuit-idUSKCN0UZ2W9 https://www.reuters.com/article/us-oracle-google-lawsuit-idU...). Google pays Apple a reported $8 billion a year to be the default search engine on iOS. Apple makes more on a Google from mobile than Google makes from Android. In other words, all of the money that Google makes from Android isn’t enough to pay Apple for it to be the default search engine. Youtube is still thought you be at best slightly above break even in terms of profitability. What happens to the ad network between ad blocking and businesses keep realizing that you can do better targeting with Facebook?
  - hn_throwaway_99 6y ago
    That $22 billion number (which basically sounds like it was just a number made up from Oracle's lawyers, never confirmed by Google) from the article you posted is definitely not comparing apples-to-apples. I can guarantee that being in control of the world's dominant mobile OS, and all the default Google search engine installs, Google Maps installs, etc. that entails, is worth much more in terms of mobile ad revenue than any directly-attributed OS revenue.

lalos 6y ago

I would assume bad leadership, even Amazon that has reportedly dubious work life balance has been able to pivot/grow but Bezos is able to lead by example and they have a lot of interesting 'ethos'. Then you have cases like Microsoft and Apple which have been around for way longer and have weathered multiple storms and computing eras. Google and Facebook just have ads, have not worked on their trustworthiness (ironically we even see posts about how real/fake are the ad engagements to this date) therefore they are stuck even if they are able to pay the salaries of the so called 'smartest' engineers (who are willing to join a one trick pony company). Microsoft built that trust by maintaining Office for the whole enterprise world (which granted, is a boring endeavor to be fixing bugs that 2-3 companies that use Excel hit but it pays long term dividends) and Apple built that trust by building easy to use consumer products that just work. Disclaimer, mostly talking about revenue streams and not products.

scarface74 6y ago
I keep hearing about Amazon’s bad work life balance. I have a friend who worked at Amazon in Seattle on the business side (not software development ) and he said it was brutal. I work remotely on the consulting side. It’s about the same work life balance as I’ve had my entire career. It’s actually better than my last two jobs. At those, I had to be the “adult supervision” trying to overall their processes while juggling releasing a product and for my last job, trying to figure out ways to cut costs and increase efficiencies post Covid. I’m just a much better paid peon now. My experimentations causing a large AWS bill is not exactly a problem now....

rorytbyrne 6y ago

Anyone interested in this concept should read The Innovator's Dilemma. It covers the idea innovation suffocation within big organizations very well and is just an overall fantastic book.