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A lot of people seem to be chalking this one up in the “memetic imitation among tech execs” column. However, in the case of Google, I’m not so sure. Google is

A lot of people seem to be chalking this one up in the “memetic imitation among tech execs” column. However, in the case of Google, I’m not so sure. Google is an advertising business. And advertising revenue is extremely sensitive to changes in the economy (Companies cut ad spending when there isn’t as much demand to soak up). In the last recession Google was still rapidly stealing ad share from old media, but now they’ve won the game and are the market. So this one makes complete sense to me. I’m sure everyone still thinks Google only hires engineers, but they actually employ A TON of ad sales people.

DrBazza 4y ago
This all happened in the dotcom crash - all the companies shed staff. It happened again during the credit-crunch. It (used to?) happens in reverse every year in the banks - everyone watched Goldmans pay out bonus before xmas and then adjust their bonuses accordingly. Business always watches what the other guy does.
88 4y ago
Just a theory but in a downturn I could see a lot of companies increasing their ad spend as they lose existing customers and find they need to work harder to acquire new ones. Obviously this doesn’t apply to advertising which is just gratuitous brand building.
- somedude895 4y ago
  It applies to Google. Their main revenue still comes from Search Engine Advertising, which is a really good customer acquisition channel. But the reason ad spends decrease during downturns is that people consume less, so there's no point in advertising when nobody's buying.
- bigcloud1299 4y ago
  This is opposite. Marketing budget is second to be cut first being building (space expansion). The R&D budget however goes up mid recession. Here is how the cuts work R&D, space expansion, marketing, parties, raises, new product building, warehouses,
anothernewdude 4y ago
They've had all sorts of chances to expand that business, but have repeatedly shut down popular projects to the point where people hesitate before adopting new Google tools because they might get shut down with little warning.
citrin_ru 4y ago
Advertising revenue is sensitive but number of engineer Google needs is not proportional to amount of ads they show. It's not like Amazon where if people order less they need less workers at fulfillment centers and less track drivers. And Google still profitable and can afford to keep headcount as an investment into future. Or they have no plans which spans more than a quarter?
- BurningFrog 4y ago
  Google can afford to spend many billions on any unprofitable cause they wish, instead of maximising profit. I don't think they should. But if they did, I'd hope they'd focus on more worthy causes than paying US engineers $300k/year.
  - citrin_ru 4y ago
    Why a project they invested in would suddenly become unprofitable for all foreseeable future? They expect recession to last decades? It more looks like public companies value short term profit (the next quarterly report) more than a long term development and Google is no longer immune to this.
- mikymoothrowa 4y ago
  only a very small fraction of people getting laid off are engineers.
saos 4y ago
> Google is an advertising business. And advertising revenue is extremely sensitive to changes in the economy Very true
notfromhere 4y ago
It’s memetic because google is insanely profitable.
twelve40 4y ago
I think throughout their existence they tried hard to be more than that. If they settled to be just an advertising business, then easy, you become an equivalent of Lamar Advertising, you post an equivalent of billboards for over a hundred years, perhaps run a few servers and settle for that. An advertising company doesn't need to try to break into cloud computing business and do all these things that Google is actually trying to do (whatever the degree of success).
FearlessNebula 4y ago
> they actually employ A TON of ad sales people Why? Don’t customers submit their own ads to Google?
- thebryant 4y ago
  I mean, if you can pay 150k to employ a salesperson to bring in an extra 400k of revenue, why wouldn't you? Of course, the math kind of goes the other way once you're projecting that your salesperson is only going to bring in 100k due to economic circumstances...
- majani 4y ago
  Yes, but there are a lot of ad agencies that try to do Google ads on behalf of clients for huge fees. I'm sure part of Google sales people's jobs is to try and either drive such agencies out of business or get the agencies to spend more on Google.

DrBazza 4y ago

This all happened in the dotcom crash - all the companies shed staff. It happened again during the credit-crunch. It (used to?) happens in reverse every year in the banks - everyone watched Goldmans pay out bonus before xmas and then adjust their bonuses accordingly. Business always watches what the other guy does.

88 4y ago

Just a theory but in a downturn I could see a lot of companies increasing their ad spend as they lose existing customers and find they need to work harder to acquire new ones. Obviously this doesn’t apply to advertising which is just gratuitous brand building.

somedude895 4y ago
It applies to Google. Their main revenue still comes from Search Engine Advertising, which is a really good customer acquisition channel. But the reason ad spends decrease during downturns is that people consume less, so there's no point in advertising when nobody's buying.
bigcloud1299 4y ago
This is opposite. Marketing budget is second to be cut first being building (space expansion). The R&D budget however goes up mid recession. Here is how the cuts work R&D, space expansion, marketing, parties, raises, new product building, warehouses,

anothernewdude 4y ago

They've had all sorts of chances to expand that business, but have repeatedly shut down popular projects to the point where people hesitate before adopting new Google tools because they might get shut down with little warning.

citrin_ru 4y ago

Advertising revenue is sensitive but number of engineer Google needs is not proportional to amount of ads they show. It's not like Amazon where if people order less they need less workers at fulfillment centers and less track drivers. And Google still profitable and can afford to keep headcount as an investment into future. Or they have no plans which spans more than a quarter?

BurningFrog 4y ago
Google can afford to spend many billions on any unprofitable cause they wish, instead of maximising profit. I don't think they should. But if they did, I'd hope they'd focus on more worthy causes than paying US engineers $300k/year.
- citrin_ru 4y ago
  Why a project they invested in would suddenly become unprofitable for all foreseeable future? They expect recession to last decades? It more looks like public companies value short term profit (the next quarterly report) more than a long term development and Google is no longer immune to this.
mikymoothrowa 4y ago
only a very small fraction of people getting laid off are engineers.

saos 4y ago

> Google is an advertising business. And advertising revenue is extremely sensitive to changes in the economy Very true

notfromhere 4y ago

It’s memetic because google is insanely profitable.

twelve40 4y ago

I think throughout their existence they tried hard to be more than that. If they settled to be just an advertising business, then easy, you become an equivalent of Lamar Advertising, you post an equivalent of billboards for over a hundred years, perhaps run a few servers and settle for that. An advertising company doesn't need to try to break into cloud computing business and do all these things that Google is actually trying to do (whatever the degree of success).

FearlessNebula 4y ago

> they actually employ A TON of ad sales people Why? Don’t customers submit their own ads to Google?

thebryant 4y ago
I mean, if you can pay 150k to employ a salesperson to bring in an extra 400k of revenue, why wouldn't you? Of course, the math kind of goes the other way once you're projecting that your salesperson is only going to bring in 100k due to economic circumstances...
majani 4y ago
Yes, but there are a lot of ad agencies that try to do Google ads on behalf of clients for huge fees. I'm sure part of Google sales people's jobs is to try and either drive such agencies out of business or get the agencies to spend more on Google.