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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 be

by 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
      Virtually all markets outside of the top wealthy western countries are Android dominated. I’ve lived in UK where iOS is very common but also in Portugal where the average salary is 800 euros and virtually everyone uses android. Most of the world can’t afford iPhones
      - seanmcdirmid 4y ago
        That’s true, but China is 1.4 billion people with not much iPhone penetration either (relatively speaking). That’s 17.5% of the world, so getting to 80% with that handicap (google being blocked in china) seems like a huge problem.
        powerapple 4y ago
        It is not such a big problem as you would imagine. The money comes from businesses, not consumers. As far as I know, the US and EU markets have the highest value consumers, so even Google is outside China, it is making a lot money from Chinese advertisers. The biggest problem for Google is competition from other advertising platforms, I don't remember last time I searched for a product on Google to be honest. I believe the core ad platform for Google is going to be YouTube, it is the only one I am not leaving now.
- jcampbell1 4y ago
  Google pays Apple $10B a quarter as search revenue sharing. Chrome/Android are good deals on an alternative analysis basis.
WilTimSon 4y ago
YouTube may be a business but, if you take away online advertising there, it wouldn't be a successful one. In fact, one of the first things people bring up when discussing YouTube from that standpoint is how much money it loses. If Google wasn't one of the richest corporations in the world, YouTube would have been killed off a long time ago. I'm frankly not even sure that the advertisements are enough to sustain it even now, would have to check the recent data.
gok 4y ago
Android and GCP both hemorrhage money
- Grazester 4y ago
  Android does not. That changed a while ago too.
jamesliudotcc 4y ago
GCP loses money.
onlyrealcuzzo 4y ago
This is like people saying all Apple does is sell iPhones. AirPods would be a fortune 50 business by themselves...
- scarface74 4y ago
  The difference is that Apple’s delineated businesses are extremely profitable. Google not so much aside from ads.
scarface74 4y ago
YouTube is thought to only break even as far as profits. Android makes very little money in the grand scheme of things. It came out during the Oracle trial that Android only had made $17 billion between 2011-2017. On the other hand, they pay Apple $18B+ to be the default search engine on iOS devices. Apple makes far more from Google paying them in mobile than Google makes from Android. GCP is still losing money. Google has no successful profitable business besides advertising and has the focus of a crack addles flea.
- kranke155 4y ago
  If Waymo works this will all sound like gibberish in 5 years. They will have successfully revolutionised the entire world’s transportation, or started the revolution. We also forget DeepMind which is run as an independent company but I believe is Google owned.
  - scarface74 4y ago
    Right, like all of Google’s other profitable businesses not related to search over the past two decades. But I’m sure they will get right this time. Did I mention Google Fiber? They literally abandoned cities and left streets in ruins. https://arstechnica.com/information-technology/2019/02/google-fiber-exits-louisville-after-shoddy-installs-left-exposed-wires-in-roads/ https://arstechnica.com/information-technology/2019/02/googl...
gfaregan 4y ago
Or if the shareholders had any say in it, they could pay a dividend and let the market decide.
jeremyjh 4y ago
They bought YouTube and Android.
- menage 4y ago
  Google bought the seed that became Android. The startup had only been working on the mobile phone OS concept for about a year when Google acquired it in 2005 (originally they'd planned a camera OS). The first public Android phone wasn't released until 2008.
- fshbbdssbbgdd 4y ago
  You could reasonably argue that only things Sergey and Larry didn’t buy is whatever they implemented personally.
- filoleg 4y ago
  They bought Maps too. However, it would be silly to imply that either of those products were nearly as popular and solid/full-featured as they are now, by many magnitudes. Those products today are nothing compared to what they were back then. Even for me, as someone who has been using YouTube since way back then, just randomly seeing screenshots of the old YouTube throws me off and makes me go "is that what it really was back then? it doesn't even look similar at all". And no, I don't mean it in a bad way. Up until about Honeycomb (3.0) or Ice Cream Sandwich (4.0), Android imo felt more like "minimum viable product that technically has feature parity with Apple and some more, but you have to have some really good justification to willingly pick it for any reason other than the price", and the experience of using it felt entirely subpar. The release of 4.0 (or 3.0, i honestly forgot) was when Android started feeling like an actual solid competitor to Apple for the first time, and not just an obvious "second best option".
  - kranke155 4y ago
    Google has a pretty solid acquisition record, and definitely a solid record of investing in the products that do work and really upgrading them. It’s a shame they have cancelled a lot of products, but let’s be honest do they cancel stuff that’s making money or could be making money at scale? Generally not much I think.
pcurve 4y ago
I agree but ultimately those are still advertising :)
phh 4y ago
All those businesses (except GCP) boils back down to ads. They still manage to diversify better than Facebook, because they diversified where they show ads, but it's still pretty much just ads.
deleted 4y ago
[deleted]

by inglor 4y ago

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
    Virtually all markets outside of the top wealthy western countries are Android dominated. I’ve lived in UK where iOS is very common but also in Portugal where the average salary is 800 euros and virtually everyone uses android. Most of the world can’t afford iPhones
    - seanmcdirmid 4y ago
      That’s true, but China is 1.4 billion people with not much iPhone penetration either (relatively speaking). That’s 17.5% of the world, so getting to 80% with that handicap (google being blocked in china) seems like a huge problem.
      - powerapple 4y ago
        It is not such a big problem as you would imagine. The money comes from businesses, not consumers. As far as I know, the US and EU markets have the highest value consumers, so even Google is outside China, it is making a lot money from Chinese advertisers. The biggest problem for Google is competition from other advertising platforms, I don't remember last time I searched for a product on Google to be honest. I believe the core ad platform for Google is going to be YouTube, it is the only one I am not leaving now.
jcampbell1 4y ago
Google pays Apple $10B a quarter as search revenue sharing. Chrome/Android are good deals on an alternative analysis basis.

WilTimSon 4y ago

YouTube may be a business but, if you take away online advertising there, it wouldn't be a successful one. In fact, one of the first things people bring up when discussing YouTube from that standpoint is how much money it loses. If Google wasn't one of the richest corporations in the world, YouTube would have been killed off a long time ago. I'm frankly not even sure that the advertisements are enough to sustain it even now, would have to check the recent data.

gok 4y ago

Android and GCP both hemorrhage money

Grazester 4y ago
Android does not. That changed a while ago too.

jamesliudotcc 4y ago

GCP loses money.

onlyrealcuzzo 4y ago

This is like people saying all Apple does is sell iPhones. AirPods would be a fortune 50 business by themselves...

scarface74 4y ago
The difference is that Apple’s delineated businesses are extremely profitable. Google not so much aside from ads.

scarface74 4y ago

YouTube is thought to only break even as far as profits. Android makes very little money in the grand scheme of things. It came out during the Oracle trial that Android only had made $17 billion between 2011-2017. On the other hand, they pay Apple $18B+ to be the default search engine on iOS devices. Apple makes far more from Google paying them in mobile than Google makes from Android. GCP is still losing money. Google has no successful profitable business besides advertising and has the focus of a crack addles flea.

kranke155 4y ago
If Waymo works this will all sound like gibberish in 5 years. They will have successfully revolutionised the entire world’s transportation, or started the revolution. We also forget DeepMind which is run as an independent company but I believe is Google owned.
- scarface74 4y ago
  Right, like all of Google’s other profitable businesses not related to search over the past two decades. But I’m sure they will get right this time. Did I mention Google Fiber? They literally abandoned cities and left streets in ruins. https://arstechnica.com/information-technology/2019/02/google-fiber-exits-louisville-after-shoddy-installs-left-exposed-wires-in-roads/ https://arstechnica.com/information-technology/2019/02/googl...

gfaregan 4y ago

Or if the shareholders had any say in it, they could pay a dividend and let the market decide.

jeremyjh 4y ago

They bought YouTube and Android.

menage 4y ago
Google bought the seed that became Android. The startup had only been working on the mobile phone OS concept for about a year when Google acquired it in 2005 (originally they'd planned a camera OS). The first public Android phone wasn't released until 2008.
fshbbdssbbgdd 4y ago
You could reasonably argue that only things Sergey and Larry didn’t buy is whatever they implemented personally.
filoleg 4y ago
They bought Maps too. However, it would be silly to imply that either of those products were nearly as popular and solid/full-featured as they are now, by many magnitudes. Those products today are nothing compared to what they were back then. Even for me, as someone who has been using YouTube since way back then, just randomly seeing screenshots of the old YouTube throws me off and makes me go "is that what it really was back then? it doesn't even look similar at all". And no, I don't mean it in a bad way. Up until about Honeycomb (3.0) or Ice Cream Sandwich (4.0), Android imo felt more like "minimum viable product that technically has feature parity with Apple and some more, but you have to have some really good justification to willingly pick it for any reason other than the price", and the experience of using it felt entirely subpar. The release of 4.0 (or 3.0, i honestly forgot) was when Android started feeling like an actual solid competitor to Apple for the first time, and not just an obvious "second best option".
- kranke155 4y ago
  Google has a pretty solid acquisition record, and definitely a solid record of investing in the products that do work and really upgrading them. It’s a shame they have cancelled a lot of products, but let’s be honest do they cancel stuff that’s making money or could be making money at scale? Generally not much I think.

pcurve 4y ago

I agree but ultimately those are still advertising :)

phh 4y ago

All those businesses (except GCP) boils back down to ads. They still manage to diversify better than Facebook, because they diversified where they show ads, but it's still pretty much just ads.

deleted 4y ago

[deleted]