10 ms·

Google still is an ads company. It’s not as well diversified as apple (hardware, services, ads) and amazon (cloud, retail, consumer electronics, logistics, heal

Google still is an ads company. It’s not as well diversified as apple (hardware, services, ads) and amazon (cloud, retail, consumer electronics, logistics, healthcare,…etc)

paxys 4y ago
iPhone hardware sales account for 50% of Apple's revenue, and that number goes up significantly when you allocate revenue from Apple Care, services, ads, App Store and more that are directly driven by iPhone. The entire company is reliant on that one device, so not quite as diversified as people think.
- wiremine 4y ago
  True. I think it's also fair to say it's more of an ecosystem than a single product. The switching costs to another similar ecosystem are high.
- matwood 4y ago
  It's better to say Apple is becoming less reliant on selling every iPhone user a new iPhone every year.
- asdajksah2123 4y ago
  Apple can deploy several levers to increase non-iPhone revenue which they haven't yet. First party games. Ads. Increase first party paid app costs (final cut pro goes back to being a pro service). Developer services. All on the mac side. They also have cloud infrastructure they haven't focused on yet, but can potentially be a major source of revenue with the right hires and focus.
MuffinFlavored 4y ago
Is Google trying to be anything other than an ads company? If so, what? I know they are famous for spinning up projects and killing them super quickly. If not, what are they doing? They have 140k+ employees worldwide. Is that what is needed to maintain their core ad business without focusing on growth of any kind (ad related or not)? If not... how many engineers/managers/whatever positions could they afford to "layoff" if we were to see US recessionary pressures/consumer spending pullback?
- colinmhayes 4y ago
  Google is putting a lot of resources into enterprise productivity software with gsuite. Google's strategy there largely revolves around letting students use the software for free and giving away chromebooks to school districts so that ten years from now every college graduate will be more comfortable with gsuite than microsoft office, so a bit of a long game there. This is basically microsoft's entire business, so there's definitely a huge market there. They also have GCP which is chugging along I guess.
  - xapata 4y ago
    To some extent, that was Microsoft's strategy in the 90s and 00s.
  - substation13 4y ago
    They sure missed boat with Teams / Slack.
  - paganel 4y ago
    MS also famously has lots and lots of pretty decent re-sellers all around the world, which re-sellers have their own very deep lists of business contacts. Afaik Google has tried to get something out of the enterprise space for a good 5 years now (I'd say), ever since they launched GCP, but it's just not in their DNA to do and especially to maintain business sales.
    - Andrew_nenakhov 4y ago
      What enterprise would want to buy products from a company infamously known to cancel products left and right?
    - bushbaba 4y ago
      Google has tried at least since 2002. So it's been 20 years. https://en.wikipedia.org/wiki/Google_Search_Appliance https://en.wikipedia.org/wiki/Google_Search_Appliance The Google Search Appliance was a respectable business in of itself. They deprecated it as it wasn't large enough for "Google". It would have been in the ranks of peer unicorn startups given the revenue prior to being killed off.
sanedigital 4y ago
Google is in all of those areas as well, they're just minor plays. Last quarter, ~10% of Google's revenue came from non-advertising Services and ~7% came from Google Cloud. The ~82% that comes from ads is split between Search, YouTube, and the Network. Amazon by comparison is 83% dependent on Amazon retail. Cloud fills the remaining 17%. They're not any better diversified, by revenue.
- mh- 4y ago
  I don't think you can look at Amazon's "dependency" on revenue through that simplistic of a lens. AWS is purported to be much more profitable than their retail operations.
- MuffinFlavored 4y ago
  What are the margins on Amazon's retail revenue after all logistics costs versus the margins on Google's advertising? I'm going to take a guess and say retail probably breaks even (almost by design by Amazon but not sure if it'll ever be more than a 10-20% margin business because by design they are offering traditionally expensive services like fast shipping, very lenient returns at very low cost/price to the end user) whereas advertising is probably... 80% margin? I know there are server costs, engineers to maintain them, but if Google stopped investing in growth as far as diversifying/expanding advertising services goes engineer/developer/management wise... how lean could they run? Could they support Google's current ad offerings with a core team of... 1000 engineers? 500? 200?
  - bushbaba 4y ago
    Amazon doesn't want to show profit in retail. It instead re-invents much of the profit into their logistics and technology. Buying all those 747s for prime air these past few years wasn't cheap. Amazon go wasn't cheap. Alexa sure ain't cheap. That all comes out of the margin of retail. Amazon retail isn't just getting revenue from e-commerce sales. There's multiple diversified business units part of that division. For example people pay for amazon logistics, amazon warehousing, etc.
- master_crab 4y ago

Google still is an ads company. It’s not as well diversified as apple (hardware, services, ads) and amazon (cloud, retail, consumer electronics, logistics, healthcare,…etc)

paxys 4y ago

iPhone hardware sales account for 50% of Apple's revenue, and that number goes up significantly when you allocate revenue from Apple Care, services, ads, App Store and more that are directly driven by iPhone. The entire company is reliant on that one device, so not quite as diversified as people think.

wiremine 4y ago
True. I think it's also fair to say it's more of an ecosystem than a single product. The switching costs to another similar ecosystem are high.
matwood 4y ago
It's better to say Apple is becoming less reliant on selling every iPhone user a new iPhone every year.
asdajksah2123 4y ago
Apple can deploy several levers to increase non-iPhone revenue which they haven't yet. First party games. Ads. Increase first party paid app costs (final cut pro goes back to being a pro service). Developer services. All on the mac side. They also have cloud infrastructure they haven't focused on yet, but can potentially be a major source of revenue with the right hires and focus.

MuffinFlavored 4y ago

Is Google trying to be anything other than an ads company? If so, what? I know they are famous for spinning up projects and killing them super quickly. If not, what are they doing? They have 140k+ employees worldwide. Is that what is needed to maintain their core ad business without focusing on growth of any kind (ad related or not)? If not... how many engineers/managers/whatever positions could they afford to "layoff" if we were to see US recessionary pressures/consumer spending pullback?

colinmhayes 4y ago
Google is putting a lot of resources into enterprise productivity software with gsuite. Google's strategy there largely revolves around letting students use the software for free and giving away chromebooks to school districts so that ten years from now every college graduate will be more comfortable with gsuite than microsoft office, so a bit of a long game there. This is basically microsoft's entire business, so there's definitely a huge market there. They also have GCP which is chugging along I guess.
- xapata 4y ago
  To some extent, that was Microsoft's strategy in the 90s and 00s.
- substation13 4y ago
  They sure missed boat with Teams / Slack.
- paganel 4y ago
  MS also famously has lots and lots of pretty decent re-sellers all around the world, which re-sellers have their own very deep lists of business contacts. Afaik Google has tried to get something out of the enterprise space for a good 5 years now (I'd say), ever since they launched GCP, but it's just not in their DNA to do and especially to maintain business sales.
  - Andrew_nenakhov 4y ago
    What enterprise would want to buy products from a company infamously known to cancel products left and right?
  - bushbaba 4y ago
    Google has tried at least since 2002. So it's been 20 years. https://en.wikipedia.org/wiki/Google_Search_Appliance https://en.wikipedia.org/wiki/Google_Search_Appliance The Google Search Appliance was a respectable business in of itself. They deprecated it as it wasn't large enough for "Google". It would have been in the ranks of peer unicorn startups given the revenue prior to being killed off.

sanedigital 4y ago

Google is in all of those areas as well, they're just minor plays. Last quarter, ~10% of Google's revenue came from non-advertising Services and ~7% came from Google Cloud. The ~82% that comes from ads is split between Search, YouTube, and the Network. Amazon by comparison is 83% dependent on Amazon retail. Cloud fills the remaining 17%. They're not any better diversified, by revenue.

mh- 4y ago
I don't think you can look at Amazon's "dependency" on revenue through that simplistic of a lens. AWS is purported to be much more profitable than their retail operations.
MuffinFlavored 4y ago
What are the margins on Amazon's retail revenue after all logistics costs versus the margins on Google's advertising? I'm going to take a guess and say retail probably breaks even (almost by design by Amazon but not sure if it'll ever be more than a 10-20% margin business because by design they are offering traditionally expensive services like fast shipping, very lenient returns at very low cost/price to the end user) whereas advertising is probably... 80% margin? I know there are server costs, engineers to maintain them, but if Google stopped investing in growth as far as diversifying/expanding advertising services goes engineer/developer/management wise... how lean could they run? Could they support Google's current ad offerings with a core team of... 1000 engineers? 500? 200?
- bushbaba 4y ago
  Amazon doesn't want to show profit in retail. It instead re-invents much of the profit into their logistics and technology. Buying all those 747s for prime air these past few years wasn't cheap. Amazon go wasn't cheap. Alexa sure ain't cheap. That all comes out of the margin of retail. Amazon retail isn't just getting revenue from e-commerce sales. There's multiple diversified business units part of that division. For example people pay for amazon logistics, amazon warehousing, etc.
master_crab 4y ago