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Google's advertising business is really profitable so anything else is secondary. Amazon came at it from a business angle. They had a ton of spare resources tha

Google's advertising business is really profitable so anything else is secondary. Amazon came at it from a business angle. They had a ton of spare resources that they only needed once in a while and figured out a way to make use of them.

randomsilence 5y ago
>They had a ton of spare resources Is this true? There was the story about the resources they need for Christmas shopping that went unused for the rest of the year. But recently somebody mentioned here (I don't remember where) that AWS was a separate business and that Amazon itself initially didn't use any resources from AWS.
- FranGro78 5y ago
  That’s correct, the multi year project was known internally as MAWS - Move to AWS.
- dastbe 5y ago
  building a public cloud is more or less a rebuild of any infrastructure you currently have. it would be just unwise for a company to build their private cloud with the same trade offs as public cloud. so while there’s the ideal state of running amazon on a large multi tenant cloud, there was absolutely no safe and reasonable path to making that happen by extending the existing infra. it would’ve also hampered aws by forcing them to focus way too large way too early.
pid-1 5y ago
amazon.com also was really profitable when AWS was launched. IDK, at this point I think we can just agree Google is bad at diversifying. The day their ad business dies, they're done.
- kortilla 5y ago
  It was profitable, but nothing like Google’s margins. It was still just a glorified Walmart with delivery (i.e. not much of a moat).
- emodendroket 5y ago
  The fear that they were plateauing was a major motivator. Google doesn’t really face that.
- oblio 5y ago
  That could take a ton of time to die off and they could still pivot. But they're the least diversified, after Facebook, agreed.
- ec109685 5y ago
  Amazon.com wasn’t really profitable. They ran at low margins for years. In 2006, their profit was like 500m against 10B in revenue.
  - jethro_tell 5y ago
    Because they were using all profit to build out EC2, fulfilment centers and fullfilment tech. It wasn't that there wasn't profit because the margins were low, there wasn't profit because they were pouring it all into different verticals and building moats. So yeah they weren't profitable but they weren't just scraping by either. I think that's one of those things that people miss when they compare a not-so-profitable startup to Amazon. The size, scale, and huge number of product markets that Amazon plays in is really pretty astounding for a company that is only 25 years old.
nevir 5y ago
> They had a ton of spare resources that they only needed once in a while and figured out a way to make use of them. Not actually the case. AWS was a completely independent stack (from hardware on up) - we couldn't use it internally for quite some time (years); and even then, only in a limited fashion (e.g. only S3 for some time)
jeffbee 5y ago
Bingo. There are two facts you need to understand Google's relationship with GCP. Cloud margins are the worst margins of anything at Google, so if there has to be a choice on where to spend money, it can only go to Cloud begrudgingly, or as part of some long game. Second thing you need to know is Google's internal workloads are way, way bigger than you are imagining. So if you see a headline that Google invested $100 billion in datacenters, don't imagine that all, most, or even a lot of that went toward GCP capacity. They spend that money on search, advertising, and letting an AI play ten million years of StarCraft.

randomsilence 5y ago

>They had a ton of spare resources Is this true? There was the story about the resources they need for Christmas shopping that went unused for the rest of the year. But recently somebody mentioned here (I don't remember where) that AWS was a separate business and that Amazon itself initially didn't use any resources from AWS.

FranGro78 5y ago
That’s correct, the multi year project was known internally as MAWS - Move to AWS.
dastbe 5y ago
building a public cloud is more or less a rebuild of any infrastructure you currently have. it would be just unwise for a company to build their private cloud with the same trade offs as public cloud. so while there’s the ideal state of running amazon on a large multi tenant cloud, there was absolutely no safe and reasonable path to making that happen by extending the existing infra. it would’ve also hampered aws by forcing them to focus way too large way too early.

pid-1 5y ago

amazon.com also was really profitable when AWS was launched. IDK, at this point I think we can just agree Google is bad at diversifying. The day their ad business dies, they're done.

kortilla 5y ago
It was profitable, but nothing like Google’s margins. It was still just a glorified Walmart with delivery (i.e. not much of a moat).
emodendroket 5y ago
The fear that they were plateauing was a major motivator. Google doesn’t really face that.
oblio 5y ago
That could take a ton of time to die off and they could still pivot. But they're the least diversified, after Facebook, agreed.
ec109685 5y ago
Amazon.com wasn’t really profitable. They ran at low margins for years. In 2006, their profit was like 500m against 10B in revenue.
- jethro_tell 5y ago
  Because they were using all profit to build out EC2, fulfilment centers and fullfilment tech. It wasn't that there wasn't profit because the margins were low, there wasn't profit because they were pouring it all into different verticals and building moats. So yeah they weren't profitable but they weren't just scraping by either. I think that's one of those things that people miss when they compare a not-so-profitable startup to Amazon. The size, scale, and huge number of product markets that Amazon plays in is really pretty astounding for a company that is only 25 years old.

nevir 5y ago

> They had a ton of spare resources that they only needed once in a while and figured out a way to make use of them. Not actually the case. AWS was a completely independent stack (from hardware on up) - we couldn't use it internally for quite some time (years); and even then, only in a limited fashion (e.g. only S3 for some time)

jeffbee 5y ago

Bingo. There are two facts you need to understand Google's relationship with GCP. Cloud margins are the worst margins of anything at Google, so if there has to be a choice on where to spend money, it can only go to Cloud begrudgingly, or as part of some long game. Second thing you need to know is Google's internal workloads are way, way bigger than you are imagining. So if you see a headline that Google invested $100 billion in datacenters, don't imagine that all, most, or even a lot of that went toward GCP capacity. They spend that money on search, advertising, and letting an AI play ten million years of StarCraft.