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> This is absolutely about survival. You grow or you die. How? With that argument, neither Facebook nor any other ad networks would already be dead since Googl

> This is absolutely about survival. You grow or you die. How? With that argument, neither Facebook nor any other ad networks would already be dead since Google basically owns the space already, but they are not, they are also pulling in huge profits, just not as huge as Google, but they are still well off.

simonh 5y ago
The others are surviving because they are growing too. If they stall out and stop growing, they will become a smaller and smaller slice of the pie as the rest of it grows around them. They would become less and less relevant, and therefore find it harder to get new business. In a high growth business there is no stable static strategy. Staying the same is functionally equivalent to shrinking, in terms of scale effects and relevance, as the rest of the market dwarfs you. As long as you keep growing, you can keep relevant. If facebook had a $1tn ad business and Google still had $200bn, would Google's business actually be the same as it is now? Would they still be able to hire the cream of graduates? Would they find it as easy to replace lost business from natural attrition with new clients? Would they find it as easy to launch new ad products and get attention for them?
- capableweb 5y ago
  Do you have sort of research/statistics that backs up your statements or are you just echoing what you've heard others say about these "high growth businesses"?
  - WoahNoun 5y ago
    It's basic math. If you are 20% of the industry right now and stay the same size while the industry grows 10x, you become 2% of the industry and a essentially a non-factor. You've yahoo'd yourself.
    - capableweb 5y ago
      Basic math right, so if you're 20% of the industry, earning 20% of the industry profits at that scale, and the industry grows 10x, then you have a smaller piece of the industry but your earnings remain the same as the profits grew as well.
      - simonh 5y ago
        I don't have statistics but it's, frankly, blindingly obvious. In a rapidly growing market, staying still as a business isn't a static situation because the landscape around you is changing. You're shrinking in relevance to customers. Even if your margins stay the same, your competitors margins are going down as they scale up, which means they will undercut you on price and you won't be able to do anything about it. The premise of this discussion is static revenue, but you can't assume that. You'll have to work harder and harder just to stand still, until it becomes unsustainable. You might be able top sustain a business by focusing on a niche specialist market segment, but at that point you're not recognisably Google anymore. As for greed, that's an incredibly naïve way to view it. Nobody creates a long term business plan that aims for irrelevance.

simonh 5y ago

The others are surviving because they are growing too. If they stall out and stop growing, they will become a smaller and smaller slice of the pie as the rest of it grows around them. They would become less and less relevant, and therefore find it harder to get new business. In a high growth business there is no stable static strategy. Staying the same is functionally equivalent to shrinking, in terms of scale effects and relevance, as the rest of the market dwarfs you. As long as you keep growing, you can keep relevant. If facebook had a $1tn ad business and Google still had $200bn, would Google's business actually be the same as it is now? Would they still be able to hire the cream of graduates? Would they find it as easy to replace lost business from natural attrition with new clients? Would they find it as easy to launch new ad products and get attention for them?

capableweb 5y ago
Do you have sort of research/statistics that backs up your statements or are you just echoing what you've heard others say about these "high growth businesses"?
- WoahNoun 5y ago
  It's basic math. If you are 20% of the industry right now and stay the same size while the industry grows 10x, you become 2% of the industry and a essentially a non-factor. You've yahoo'd yourself.
  - capableweb 5y ago
    Basic math right, so if you're 20% of the industry, earning 20% of the industry profits at that scale, and the industry grows 10x, then you have a smaller piece of the industry but your earnings remain the same as the profits grew as well.
    - simonh 5y ago
      I don't have statistics but it's, frankly, blindingly obvious. In a rapidly growing market, staying still as a business isn't a static situation because the landscape around you is changing. You're shrinking in relevance to customers. Even if your margins stay the same, your competitors margins are going down as they scale up, which means they will undercut you on price and you won't be able to do anything about it. The premise of this discussion is static revenue, but you can't assume that. You'll have to work harder and harder just to stand still, until it becomes unsustainable. You might be able top sustain a business by focusing on a niche specialist market segment, but at that point you're not recognisably Google anymore. As for greed, that's an incredibly naïve way to view it. Nobody creates a long term business plan that aims for irrelevance.