7 ms·

Many years ago, as an intern at Google, one of my mentors said to me "Google found a hose that money pours out of, and it's name is 'online advertising'. All we

by mabbo 4y ago

Many years ago, as an intern at Google, one of my mentors said to me "Google found a hose that money pours out of, and it's name is 'online advertising'. All we do now is improve that hose and desperately search for another one". I would love to see Waymo become another hose. I'd love to see it launch in my city (whenever the laws are amended to allow such things). (Yes, I know arguably they've had a few other successes.)

mbesto 4y ago
> I would love to see Waymo become another hose. Waymo is just another way to add more water to the hose. More leisure time not focusing on the road = more eyeballs. What percent of our lives do we spend driving?[0] "Our best guess? Six percent of our waking hours are spent in a car, en route. There are 4.12 million miles of road in the United States, and that’s a lot of ground for the 222 million drivers in this country to cover." [0] - https://short-facts.com/how-many-hours-does-the-average-american-spend-driving/ https://short-facts.com/how-many-hours-does-the-average-amer...
- mrshadowgoose 4y ago
  It's both. Moving people and things (Waymo Via[1] is their autonomous trucking and delivery subdivision) via roadways is worth (in revenue) hundreds of billions of dollars in the U.S. alone. Even capturing a fraction of that market, and carving out profit (by displacing expensive, accident-prone and sleep-needing humans), is a money hose on its own. [1] https://waymo.com/waymo-via/ https://waymo.com/waymo-via/
- dougmwne 4y ago
  I disagree. There’s a ton of profit margin on the table selling driverless rideshares and licensing the tech to other automakers. While Google will be able to serve a few ads during the ride, that will amount to a few cents of ad revenue vs. several dollars of transportation services. Tesla is already setting a price for full self driving that does not even work or exist at 15k, so the actual retail price could easily be tens of thousands, absolutely dwarfing the 5 year ad revenue per user, let alone the incremental increase from a few extra hours of screen time a week.
  - Beaver117 4y ago
    I'm not an expert but I doubt there's really a ton of profit in rides. Uber, Lyft, even taxi companies are barely profitable after many years. With the amount of money and time spent on making self driving work I'm not sure they'll ever make their money back.
    - brianwawok 4y ago
      You realize like 60% of the Uber / lyft fee goes to the driver? Now imagine there is no driver… the math sure changes
      - neon_electro 4y ago
        I'm begging you to read up on the actual experiences of drivers for Lyft & Uber - there are dedicated subreddits. Lyft and Uber are not leaving 60% of the money on the table to the drivers. https://www.reddit.com/r/lyftdrivers/ https://www.reddit.com/r/lyftdrivers/ https://www.reddit.com/r/uberdrivers/ https://www.reddit.com/r/uberdrivers/
        brianwawok 4y ago
        Are you including tips and recruitment fee and driver bonuses?
        neon_electro 4y ago
        Absolutely. No competent accounting would exclude those.
        yunwal 4y ago
        Nobody is saying it’s a livable wage for a human. In many competitive markets drivers spend more time driving around looking for a ride than making money. But it’s still a huge cost to Uber/Lyft to pay people even if they’re paying a pittance.
BurningFrog 4y ago
The current Google is not good at inventing world changing tech. The rational thing would be to keep doing what they're best at. But somehow that's not how things work.
- visarga 4y ago
  I believe that the current ad revenue model is facing a challenge due to the shift from a search-based approach to a dialogue-based one. People are more likely to use a local model to filter the web and communicate in a Q&A format. This means that fewer ads will be visible, making it more difficult for businesses to generate revenue in this new paradigm. Why search when you can ask directly for the answer? BTW, local models underperform GPT-3 but they can still perform decently (eg. FLAN T5, GPT NeoX)
  - warkdarrior 4y ago
    And you think AI models could not provide answers appropriately biased towards an advertiser? Organic ad content is the future.
    - visarga 4y ago
      No kind of ads will work if your LM is skipping them. I am thinking along the lines of having an OS-LM or a browser-LM, should be a standard component.
- kranke155 4y ago
  You mean the same google that owns DeepMind, one the premiere AI companies on the planet?
  - BurningFrog 4y ago
    OK, that's actually something real impressive they've done! Didn't think of it. It's not much of a business though. At least not yet.
deleted 4y ago
[deleted]
inglor 4y ago
Google has YouTube, Android, gmail, GCP and a bunch of other big businesses. I have a ton of criticism about Google but they've been able to diversify a lot better than I expected and I totally understand why companies with big cash "hoses" like you describe are making these sort of 'long shot but highly profitable' investments.
- wpietri 4y ago
  Their top 3 revenue sources are ads, ads, and ads. (Respectively ads on their own properties, "Google Network" ads, and YouTube ads.) That's more than 80% of their revenue. GCP is 7.5% of their total revenue. Details here: https://www.oberlo.com/statistics/how-does-google-make-money https://www.oberlo.com/statistics/how-does-google-make-money One of the interesting questions for me is where the profits come in. Android definitely started as a loss leader so that they didn't get shut out of the mobile advertising market. But I could believe that it's in the black now due to the Apple-like model of charging a slice of everything that goes through the phone. Google Cloud is definitely not profitable yet, but they claim they will get there: https://accelerationeconomy.com/cloud-wars/google-cloud-has-absolute-line-of-sight-to-profitability/ https://accelerationeconomy.com/cloud-wars/google-cloud-has-...
  - wongarsu 4y ago
    Android probably pays for itself right now. But its primary purpose is forcing about 70% of phones sold globally to have Google apps pre-installed. And mobile ads, as you said.
    - seanmcdirmid 4y ago
      Is that true though? The Chinese market is huge, and even if most phones are running Android, they aren’t including google apps. But if we exclude Chinese android phones, I would guess that Google doesn’t hit that 70% mark.
      - kranke155 4y ago

by mabbo 4y ago

mbesto 4y ago

> I would love to see Waymo become another hose. Waymo is just another way to add more water to the hose. More leisure time not focusing on the road = more eyeballs. What percent of our lives do we spend driving?[0] "Our best guess? Six percent of our waking hours are spent in a car, en route. There are 4.12 million miles of road in the United States, and that’s a lot of ground for the 222 million drivers in this country to cover." [0] - https://short-facts.com/how-many-hours-does-the-average-american-spend-driving/ https://short-facts.com/how-many-hours-does-the-average-amer...

mrshadowgoose 4y ago
It's both. Moving people and things (Waymo Via[1] is their autonomous trucking and delivery subdivision) via roadways is worth (in revenue) hundreds of billions of dollars in the U.S. alone. Even capturing a fraction of that market, and carving out profit (by displacing expensive, accident-prone and sleep-needing humans), is a money hose on its own. [1] https://waymo.com/waymo-via/ https://waymo.com/waymo-via/
dougmwne 4y ago
I disagree. There’s a ton of profit margin on the table selling driverless rideshares and licensing the tech to other automakers. While Google will be able to serve a few ads during the ride, that will amount to a few cents of ad revenue vs. several dollars of transportation services. Tesla is already setting a price for full self driving that does not even work or exist at 15k, so the actual retail price could easily be tens of thousands, absolutely dwarfing the 5 year ad revenue per user, let alone the incremental increase from a few extra hours of screen time a week.
- Beaver117 4y ago
  I'm not an expert but I doubt there's really a ton of profit in rides. Uber, Lyft, even taxi companies are barely profitable after many years. With the amount of money and time spent on making self driving work I'm not sure they'll ever make their money back.
  - brianwawok 4y ago
    You realize like 60% of the Uber / lyft fee goes to the driver? Now imagine there is no driver… the math sure changes
    - neon_electro 4y ago
      I'm begging you to read up on the actual experiences of drivers for Lyft & Uber - there are dedicated subreddits. Lyft and Uber are not leaving 60% of the money on the table to the drivers. https://www.reddit.com/r/lyftdrivers/ https://www.reddit.com/r/lyftdrivers/ https://www.reddit.com/r/uberdrivers/ https://www.reddit.com/r/uberdrivers/
      - brianwawok 4y ago
        Are you including tips and recruitment fee and driver bonuses?
        neon_electro 4y ago
        Absolutely. No competent accounting would exclude those.
      - yunwal 4y ago
        Nobody is saying it’s a livable wage for a human. In many competitive markets drivers spend more time driving around looking for a ride than making money. But it’s still a huge cost to Uber/Lyft to pay people even if they’re paying a pittance.

BurningFrog 4y ago

The current Google is not good at inventing world changing tech. The rational thing would be to keep doing what they're best at. But somehow that's not how things work.

visarga 4y ago
I believe that the current ad revenue model is facing a challenge due to the shift from a search-based approach to a dialogue-based one. People are more likely to use a local model to filter the web and communicate in a Q&A format. This means that fewer ads will be visible, making it more difficult for businesses to generate revenue in this new paradigm. Why search when you can ask directly for the answer? BTW, local models underperform GPT-3 but they can still perform decently (eg. FLAN T5, GPT NeoX)
- warkdarrior 4y ago
  And you think AI models could not provide answers appropriately biased towards an advertiser? Organic ad content is the future.
  - visarga 4y ago
    No kind of ads will work if your LM is skipping them. I am thinking along the lines of having an OS-LM or a browser-LM, should be a standard component.
kranke155 4y ago
You mean the same google that owns DeepMind, one the premiere AI companies on the planet?
- BurningFrog 4y ago
  OK, that's actually something real impressive they've done! Didn't think of it. It's not much of a business though. At least not yet.

deleted 4y ago

[deleted]

inglor 4y ago

Google has YouTube, Android, gmail, GCP and a bunch of other big businesses. I have a ton of criticism about Google but they've been able to diversify a lot better than I expected and I totally understand why companies with big cash "hoses" like you describe are making these sort of 'long shot but highly profitable' investments.

wpietri 4y ago
Their top 3 revenue sources are ads, ads, and ads. (Respectively ads on their own properties, "Google Network" ads, and YouTube ads.) That's more than 80% of their revenue. GCP is 7.5% of their total revenue. Details here: https://www.oberlo.com/statistics/how-does-google-make-money https://www.oberlo.com/statistics/how-does-google-make-money One of the interesting questions for me is where the profits come in. Android definitely started as a loss leader so that they didn't get shut out of the mobile advertising market. But I could believe that it's in the black now due to the Apple-like model of charging a slice of everything that goes through the phone. Google Cloud is definitely not profitable yet, but they claim they will get there: https://accelerationeconomy.com/cloud-wars/google-cloud-has-absolute-line-of-sight-to-profitability/ https://accelerationeconomy.com/cloud-wars/google-cloud-has-...
- wongarsu 4y ago
  Android probably pays for itself right now. But its primary purpose is forcing about 70% of phones sold globally to have Google apps pre-installed. And mobile ads, as you said.
  - seanmcdirmid 4y ago
    Is that true though? The Chinese market is huge, and even if most phones are running Android, they aren’t including google apps. But if we exclude Chinese android phones, I would guess that Google doesn’t hit that 70% mark.
    - kranke155 4y ago