4 ms·

Google has the same problems Microsoft has always had. They have one huge cash cow that funds the entire company, and everything else is peripheral (a first wor

by simonh 5y ago

Google has the same problems Microsoft has always had. They have one huge cash cow that funds the entire company, and everything else is peripheral (a first world problem of course). Arguably MS now has more than one, but they've existed twice as long as Google and it's taken many decades to get to that point. It never really mattered if PlayForSure, Zune, Bing, Windows Phone etc were big successes or not, the company was absolutely fine anyway. XBOX is a success, but the massive billon+ write off they suffered back in the day means even now overall it's probably not made a profit, and if so not much. IE has floundered for over a decade. They do have many successful products but most of them could die and it wouldn't matter. It's the same with Google. As long as they're awash in a torrent of search advertising money nothing else matters. Like Micorosoft they do have some successful non-core products. Chrome, Android, GMail, Google Docs, Chromebooks. However all of those could drop stone dead and they'd be A-Okay. This is why Amazon is so impressive to me. Bezos built two world class mega-businsses simultaneously from scratch. I can't think of a single other example of this anywhere.

maccard 5y ago
They're not quite at the same scale as amazon, but many of the Korean/Japanese behemoth companies have enormously succesful businesses in multiple areas. Samsung, Sony, Yamaha for example.
- simonh 5y ago
  The Zaibatsu/Keiretsu took many generations to get where they are now, and relied on heavy political patronage and financial muscle to grow over protracted periods of time. None of their founders built multiple global businesses from scratch in a single lifetime, let alone simultaneously. They're also very much artificial constructs, in the sense at this point they are as much political as economic artefacts. The Chaebol are more recent in their modern form but followed the same model.
NicoJuicy 5y ago
> They have one huge cash cow that funds the entire company Office, windows, Azure/development, Xbox/gaming are all integrated and cash cows.
- zeusk 5y ago
  Surface, Dynamics/PowerBI, Research, NeXT (Hololens)
  - simonh 5y ago
    All utterly peripheral, they could wither and die and have no noticeable impact on the bottom line, which is exactly the point I'm making.
    - zeusk 5y ago
      Surface is already ~$8B of revenue/year business, not sure how or why you think a business of that size is unnoticeable or nobody would notice that if it were to wither away. Not sure how specific revenue figures I'm allowed to express here publicly but Dynamics and Hololens have also been big cashcows lately. Research, sure it isn't a direct revenue generating group but their patents portfolio is immense. Heck, even LinkedIn is $10B/year business now. Maybe you're living under a rock?
      - simonh 5y ago
        They’re nice businesses, but losing them would not substantially change or harm the company the way losing Windows or Azure would. The way losing AWS would harm Amazon, losing Search Ads would harm Google, losing iPhone would harm Apple. If Microsoft lost XBox or LinkedIN they’d walk it off. That’s the point I’m making.
- simonh 5y ago
  I addressed XBox specifically. They wrote off $1.5Bn over the XBox 360 red rings of death issue. It's possible they might have recouped that since, with inflation and interest adjustment, but doubtful. Windows and Azure are the tent poles I was thinking of when I said they had more than one now. I tend to see Windows and Office as fundamentally the same business though, along with development tools, in the same way that I think it's unreasonable to consider Apple's applications business separately from MacOS. Split Office from Windows and I think it would struggle, certainly it wouldn't have got to where it is now. It's an add-on to the Windows business. On it's own it wouldn't be industry dominating the way Windows, AWS, Google Search, etc are. It's a good business but not industry shaping, not anymore anyway.
AJ007 5y ago
One contrast between Microsoft and Google is that Microsoft doesn’t repeatedly break working products and confuse everyone with changing names around yearly. Microsoft has a long history of failures from Bob to the Zune, but their core stuff, including Windows, Office, Visual Studio, is solid. Bob didn’t destroy Windows. Occasionally the products go off course, like Windows ME, but they seem to correct fairly quickly. It certainly has been disappointing watching rock solid software from Google just disintegrate over the past decade. If it wasn’t for the iOS Mail app, I suspect gmail would be completely botched by now. Another consideration to the Verge article, how much money has Google spent doing all of this wild stuff just to their messaging products? I would guess well over $10b. Organizationally Google’s management layers should be gutted. From the CEO to middle management, the company is run by people who couldn’t operate an average company lacking a high margin cashflow cow.

by simonh 5y ago

maccard 5y ago

They're not quite at the same scale as amazon, but many of the Korean/Japanese behemoth companies have enormously succesful businesses in multiple areas. Samsung, Sony, Yamaha for example.

simonh 5y ago
The Zaibatsu/Keiretsu took many generations to get where they are now, and relied on heavy political patronage and financial muscle to grow over protracted periods of time. None of their founders built multiple global businesses from scratch in a single lifetime, let alone simultaneously. They're also very much artificial constructs, in the sense at this point they are as much political as economic artefacts. The Chaebol are more recent in their modern form but followed the same model.

NicoJuicy 5y ago

> They have one huge cash cow that funds the entire company Office, windows, Azure/development, Xbox/gaming are all integrated and cash cows.

zeusk 5y ago
Surface, Dynamics/PowerBI, Research, NeXT (Hololens)
- simonh 5y ago
  All utterly peripheral, they could wither and die and have no noticeable impact on the bottom line, which is exactly the point I'm making.
  - zeusk 5y ago
    Surface is already ~$8B of revenue/year business, not sure how or why you think a business of that size is unnoticeable or nobody would notice that if it were to wither away. Not sure how specific revenue figures I'm allowed to express here publicly but Dynamics and Hololens have also been big cashcows lately. Research, sure it isn't a direct revenue generating group but their patents portfolio is immense. Heck, even LinkedIn is $10B/year business now. Maybe you're living under a rock?
    - simonh 5y ago
      They’re nice businesses, but losing them would not substantially change or harm the company the way losing Windows or Azure would. The way losing AWS would harm Amazon, losing Search Ads would harm Google, losing iPhone would harm Apple. If Microsoft lost XBox or LinkedIN they’d walk it off. That’s the point I’m making.
simonh 5y ago
I addressed XBox specifically. They wrote off $1.5Bn over the XBox 360 red rings of death issue. It's possible they might have recouped that since, with inflation and interest adjustment, but doubtful. Windows and Azure are the tent poles I was thinking of when I said they had more than one now. I tend to see Windows and Office as fundamentally the same business though, along with development tools, in the same way that I think it's unreasonable to consider Apple's applications business separately from MacOS. Split Office from Windows and I think it would struggle, certainly it wouldn't have got to where it is now. It's an add-on to the Windows business. On it's own it wouldn't be industry dominating the way Windows, AWS, Google Search, etc are. It's a good business but not industry shaping, not anymore anyway.

AJ007 5y ago

One contrast between Microsoft and Google is that Microsoft doesn’t repeatedly break working products and confuse everyone with changing names around yearly. Microsoft has a long history of failures from Bob to the Zune, but their core stuff, including Windows, Office, Visual Studio, is solid. Bob didn’t destroy Windows. Occasionally the products go off course, like Windows ME, but they seem to correct fairly quickly. It certainly has been disappointing watching rock solid software from Google just disintegrate over the past decade. If it wasn’t for the iOS Mail app, I suspect gmail would be completely botched by now. Another consideration to the Verge article, how much money has Google spent doing all of this wild stuff just to their messaging products? I would guess well over $10b. Organizationally Google’s management layers should be gutted. From the CEO to middle management, the company is run by people who couldn’t operate an average company lacking a high margin cashflow cow.