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I respect the Economist’s business columnist (Schumpeter) and tech columnist (Babbage) but this seems to be a case of Schumpeter writing about tech. Leaving as

I respect the Economist’s business columnist (Schumpeter) and tech columnist (Babbage) but this seems to be a case of Schumpeter writing about tech. Leaving aside HN loving the idea of Big Tech being weakened by becoming Relatively Small Tech, I don’t see how this is in Alphabet’s or YouTube’s interest. The article assumes that such a divorce would be simple and it would allow YouTube to focus on taking on TikTok. It sounds like the exact opposite to me. YouTube clearly shares a lot of infrastructure with the rest of Google, especially datacenters and ads. Instead of focusing on high leverage activity like improving product, they would spend their time figuring out how to split datacenters, ads products, internal tooling etc. Almost all of their software stack is maintained internally. They would need to fork it and staff all of these teams. All of this is time wasted, work duplication and cost increases. Most of the rest is questionable claims. Like the claim that a post-divorce YouTube would be able to focus on subscription revenue. You mean like YouTube Premium, a subscription they’ve had for years? They’re not replacing ads with subscription, they need both, so they need to recreate whatever ads infra they were sharing. The only argument that made any sense was that it would buy goodwill with regulators. This is because regulators also like the idea of Relatively Small Tech. I feel like this article was started with that Wall St mentality of “I wish I could invest in YouTube without investing in the rest of it” and it somehow tries to justify the rest the divorce. Really, if I had to think about what YouTube wants to do I’d say they have to beat TikTok at the recommendation game. To do that they need as much data as possible (even if that sounds distasteful to HN), meaning the entire profile that Google has built on each person. In what world does YouTube build better recommendations after voluntarily giving up access to this data? I’m keen to read an argument that argues this is in the best interests of Alphabet and YouTube. Ideally something that goes into specifics rather than vague notions of “focus”.

hodgesrm 4y ago
> Leaving aside HN loving the idea of Big Tech being weakened by becoming Relatively Small Tech, I don’t see how this is in Alphabet’s or YouTube’s interest. What might instead generate more value is to spin out Google Workspaces (aka docs, slides, sheets, drive, etc.) It feels as if their business products are losing out to Microsoft, which IMO offer a greatly inferior collaboration experience for distributed teams. To pick one concrete example Google Drive is poorly suited for storing business documents due to its hostility to hierarchy and poor tools for viewing and search. By contrast Sheets is amazing. We run our business on it. These product deserve a separate, innovative focus that does not treat document management as a search problem.
dageshi 4y ago
I think more fundamentally, youtube is far less vulnerable to the chatgpt garbagisation of the web. SEO crap is already bad, it will likely get much worse. Youtube has actual good content from creators whose opinions I trust. Google would be moronic to give that up, they've spent long enough building it.
- jeffwask 4y ago
  > the chatgpt garbagisation of the web Eh... it's already started on YouTube. There's a whole new genre of movie content that has chatgpt summarize the movie while they play 15 minutes of clips. It's higher effort garbagisation because someone needs to at least do some low effort video editing.
  - echelon 4y ago
    Full video automation is not going to take long. I'm working on systems to automate 100% of video workflows (in a good way). We recently launched a 24/7 news channel: https://fakeyou.com/news https://fakeyou.com/news
    - EForEndeavour 4y ago
      What do you mean "in a good way"? How do you control whether someone using your video workflow automation uses it for good (whatever that is) or not?
      - echelon 4y ago
        How does Adobe assure this? Or any tool maker? Email has problems, yet the good and productive uses vastly outweigh the bad actors. The vast majority of systems humans use have benefit, otherwise they would be unwound by governments (eg. crypto). People want to be creative more than they want to be destructive. The destroyers will be moderated, just as they are in every system. I want a world where every kid can make their own Star Wars or Princess Mononoke and create more than Scorsese's entire career within a single year.
cm277 4y ago
Well, let's start with the idea of “I wish I could invest in YouTube without investing in the rest of it”. Why not? YouTube is a more focused brand, with a world-beating product that's already active in multiple high-growth verticals (entertainment, shorts/vertical video, education, conspiracy theories). As the article says it can compete against both Netflix and TikTok (and probably Udemy, etc.). Aren't these high-growth areas worth investing in? aren't they more high-growth than whatever Google is doing this week? (I don't know, streaming video games to a watch and a new chat application probably). And if you are investing in these areas and this is your only business isn't this "focus" all of a sudden important? (so you can actually compete in these businesses and potentially grow the business more?). I for one like the idea --as well as I think Google needs to be broken up ten years ago. YouTube has scale, a good brand and would probably gain by being less Googley --i.e. iterative and consumer-focused. Not just YouTube, but the internet would be better off with a more focused YouTube (that also has less of your personal data as a bonus).
- jfengel 4y ago
  Is Alphabet lacking cash? Unless a spun-off YouTube were to issue more stock, they don't really care what investors would like. If Alphabet needs money for YouTube investment they can issue more Alphabet stock, and investors can take that deal or not. But I doubt that Alphabet's challenges involve cash flow. It might well be better for the world if Alphabet weren't a conglomerate. But it seems unlikely that it's better for them.
  - jpadkins 4y ago
    Alphabet cash on hand for 2022 was $113.762B, a 18.54% decline from 2021.
    - insane_dreamer 4y ago
      _Only_ $113B? Ouch. /s
- cmeacham98 4y ago
  > Well, let's start with the idea of “I wish I could invest in YouTube without investing in the rest of it”. Why not? The preceding parts of the comment literally explain why not.
heisenbit 4y ago
> They would need to fork it and staff all of these teams I think the worst would be having to split the customer base. Their sales costs would increase a lot and they would loose pricing power. On the social networking front turn a leader into a me-too. This article confuses what these businesses seem on the surface (search+video) and what they really are (selling ads, keeping track of customer identities to do the same).
Aperocky 4y ago
> I wish I could invest in YouTube without investing in the rest of it That's assuming YouTube needs any investment.
luckylion 4y ago
> Instead of focusing on high leverage activity like improving product, they would spend their time figuring out how to split datacenters, ads products, internal tooling etc. You mean like they haven't for the past 5 years? I have no opinion on splitting them up besides "why?", but "Youtube wouldn't innovate on their product any more" is a weird position: Youtube hasn't innovated since it was created, they've only copied from other products (streaming, shorts, music, superchats, channel members), and did so in a mediocre way that's just disappointing.
duxup 4y ago
This reminds me of what I see happen in sports sometimes. Fans decide it is time to trade Player X. Next move is to find someone to replace them ... they then describe someone just like Player X. A YouTube and Google split would setup a situation where they both seem to be a pretty good fit for each other.
- noizejoy 4y ago
  In sports, you need to replace players, because they age out of their prime. It might be interesting to apply similar thinking to technology.
  - duxup 4y ago
    “Sure he is still playing well but Aron Judge is using an out of date version of React router.”
madrox 4y ago
I'm reminded by calls for Apple to buy Nintendo. It focuses on a very specific upside while ignoring or hand-waving away all the challenges that would likely kill what makes these companies work.
- sircastor 4y ago
  I see the same kind of thing for Apple to buy Disney. In the abstract, the money and some shared goals make sense, but the reality would be a very challenging struggle to combine two ideologically different companies.
  - 8note 4y ago
    I'd see Disney as buying Nintendo, rather than Apple doing something with either of them. Both Disney and Nintendo operate on brands and content IP. Both keep releasing the same content but updated to dedicated fanbases
    - madrox 4y ago
      I once advocated at this when at Disney, but the truth is that Nintendo has no interest in selling to anyone and they don't have to
jimnotgym 4y ago
I have no idea about the utility of divesting YouTube but on this point... >YouTube clearly shares a lot of infrastructure with the rest of Google, especially datacenters and ads. I don't see this as a particularly thorny problem. Normally in a divestiture. Newcorp would just sign a 5 year infrastructure deal with Alphabet, and a 5 year deal for it's ad space. That is plenty of time to resolve any lingering issues. I wouldn't be surprised to see Alphabet divest some business, however I think it is unlikely to be for tech reasons. It is more likely to be financial engineering, as growth stalls and share prices need protecting.
- danpalmer 4y ago
  The problem is there’s no clear split. Some infra is owned and developed by YouTube teams, some by Google teams, and it’s hard to figure out the balance and usage and so on. I’m some case you might have a service used by a Google product, operated as a platform by a YouTube team, that uses Google Cloud services, and runs on Google infrastructure. And the SREs may be “paid for” with YouTube budgets. Who pays who? And how much? It’s not as clean as, say, treating these things all like cloud services provided by an infrastructure provider.
make3 4y ago
I feel like one of the only ways Youtube can be profitable is by having integration and being a first class citizen Google cloud's infrastructure & tech.
bloodyplonker22 4y ago
Additionally, it's not quite right when the author compares YouTube to TikTok as direct competitors. I have used YouTube to learn an insanely great amount of new things which range from programming to car and home repairs. You cannot do this on TikTok.
- zamnos 4y ago
  Yes you can. There are tons of "home hacks" and "car hacks" videos. Hell, the whole "kia boys" auto theft phenomenon is driven by teens learning how to boost late model kias via tiktok. (https://www.inquirer.com/news/kia-boyz-challenge-tiktok-philadelphia-car-thefts-20230222.html https://www.inquirer.com/news/kia-boyz-challenge-tiktok-phil...) As far as programmings tips, just yesterday I learned about Python's casefold() function, which superceeds lower() for comparing internationalized strings. "Strasse".lower() != "Straße".lower() "Strasse".casefold() == "Straße".casefold() https://www.tiktok.com/@indentlyreels/video/7200305938614586630 https://www.tiktok.com/@indentlyreels/video/7200305938614586... (If you want that sort of content, watch the video in your tiktok app to prime the algorithm to surface more similar content to you.) Also in case you weren't aware, Tiktok now also supports longer videos - https://www.theverge.com/2022/2/28/22954525/tiktok-maximum-video-length-10-minutes https://www.theverge.com/2022/2/28/22954525/tiktok-maximum-v...
valley_guy_12 4y ago
Just as a point of interest, AIUI the names "Schumpeter" and "Babbage" are "house names", not the real names of the people who write the columns. Any given column might be written by anyone, and it would still use the same house name. Shumpeter and Babbage are the last names of famous people in fields related to the columns topics.
- kqr2 4y ago
  https://en.wikipedia.org/wiki/Robert_X._Cringely https://en.wikipedia.org/wiki/Robert_X._Cringely is another interesting example, however in this case, Mark Stephens actually took over the pseudonym after he left InfoWorld: After a financial disagreement in 1995, Stephens was dismissed from InfoWorld and was promptly sued by IDG to prevent him from continuing to use the Cringely trademark. A settlement was reached out of court that allowed him to use the name, so long as he did not contribute to competing technology magazines
  - astrange 4y ago
    That's not just a guy's name? Was I confusing him with Robert Scoble the whole time? …Robert Scoble was accused of sexual assault and later converted to Islam? https://en.wikipedia.org/wiki/Robert_Scoble https://en.wikipedia.org/wiki/Robert_Scoble I'm learning so much from Wikipedia today.
tehlike 4y ago
Spin off doesn't always imply spinning of infra or codebase. They could license each other their infra and libraries.
pmontra 4y ago
> YouTube clearly shares a lot of infrastructure with the rest of Google That's the least of the problems. If there is the will to spinoff YouTube they can agree to rent that infrastructure and the people running it for, let's say, five years and see what happens next. No software will move, nobody will change desk or laptop. Paychecks will come from the same company. Then they'll gradually figure out if they want their own infrastructure in case the goals of the two companies get in the way of each other and YouTube has little leverage against Google.
- zeven7 4y ago
  They use the same repo. And everything related (internal libs, code review system, issue tracking, code search, etc) comprises a lot of the shared infrastructure. Are you suggesting "renting a space in the repo"? I guess it's possible, but would be weird and could have crazy risks depending on how hard you try to push on the "independent" angle.

hodgesrm 4y ago

> Leaving aside HN loving the idea of Big Tech being weakened by becoming Relatively Small Tech, I don’t see how this is in Alphabet’s or YouTube’s interest. What might instead generate more value is to spin out Google Workspaces (aka docs, slides, sheets, drive, etc.) It feels as if their business products are losing out to Microsoft, which IMO offer a greatly inferior collaboration experience for distributed teams. To pick one concrete example Google Drive is poorly suited for storing business documents due to its hostility to hierarchy and poor tools for viewing and search. By contrast Sheets is amazing. We run our business on it. These product deserve a separate, innovative focus that does not treat document management as a search problem.

dageshi 4y ago

I think more fundamentally, youtube is far less vulnerable to the chatgpt garbagisation of the web. SEO crap is already bad, it will likely get much worse. Youtube has actual good content from creators whose opinions I trust. Google would be moronic to give that up, they've spent long enough building it.

jeffwask 4y ago
> the chatgpt garbagisation of the web Eh... it's already started on YouTube. There's a whole new genre of movie content that has chatgpt summarize the movie while they play 15 minutes of clips. It's higher effort garbagisation because someone needs to at least do some low effort video editing.
- echelon 4y ago
  Full video automation is not going to take long. I'm working on systems to automate 100% of video workflows (in a good way). We recently launched a 24/7 news channel: https://fakeyou.com/news https://fakeyou.com/news
  - EForEndeavour 4y ago
    What do you mean "in a good way"? How do you control whether someone using your video workflow automation uses it for good (whatever that is) or not?
    - echelon 4y ago
      How does Adobe assure this? Or any tool maker? Email has problems, yet the good and productive uses vastly outweigh the bad actors. The vast majority of systems humans use have benefit, otherwise they would be unwound by governments (eg. crypto). People want to be creative more than they want to be destructive. The destroyers will be moderated, just as they are in every system. I want a world where every kid can make their own Star Wars or Princess Mononoke and create more than Scorsese's entire career within a single year.

cm277 4y ago

Well, let's start with the idea of “I wish I could invest in YouTube without investing in the rest of it”. Why not? YouTube is a more focused brand, with a world-beating product that's already active in multiple high-growth verticals (entertainment, shorts/vertical video, education, conspiracy theories). As the article says it can compete against both Netflix and TikTok (and probably Udemy, etc.). Aren't these high-growth areas worth investing in? aren't they more high-growth than whatever Google is doing this week? (I don't know, streaming video games to a watch and a new chat application probably). And if you are investing in these areas and this is your only business isn't this "focus" all of a sudden important? (so you can actually compete in these businesses and potentially grow the business more?). I for one like the idea --as well as I think Google needs to be broken up ten years ago. YouTube has scale, a good brand and would probably gain by being less Googley --i.e. iterative and consumer-focused. Not just YouTube, but the internet would be better off with a more focused YouTube (that also has less of your personal data as a bonus).

jfengel 4y ago
Is Alphabet lacking cash? Unless a spun-off YouTube were to issue more stock, they don't really care what investors would like. If Alphabet needs money for YouTube investment they can issue more Alphabet stock, and investors can take that deal or not. But I doubt that Alphabet's challenges involve cash flow. It might well be better for the world if Alphabet weren't a conglomerate. But it seems unlikely that it's better for them.
- jpadkins 4y ago
  Alphabet cash on hand for 2022 was $113.762B, a 18.54% decline from 2021.
  - insane_dreamer 4y ago
    _Only_ $113B? Ouch. /s
cmeacham98 4y ago
> Well, let's start with the idea of “I wish I could invest in YouTube without investing in the rest of it”. Why not? The preceding parts of the comment literally explain why not.

heisenbit 4y ago

> They would need to fork it and staff all of these teams I think the worst would be having to split the customer base. Their sales costs would increase a lot and they would loose pricing power. On the social networking front turn a leader into a me-too. This article confuses what these businesses seem on the surface (search+video) and what they really are (selling ads, keeping track of customer identities to do the same).

Aperocky 4y ago

> I wish I could invest in YouTube without investing in the rest of it That's assuming YouTube needs any investment.

luckylion 4y ago

> Instead of focusing on high leverage activity like improving product, they would spend their time figuring out how to split datacenters, ads products, internal tooling etc. You mean like they haven't for the past 5 years? I have no opinion on splitting them up besides "why?", but "Youtube wouldn't innovate on their product any more" is a weird position: Youtube hasn't innovated since it was created, they've only copied from other products (streaming, shorts, music, superchats, channel members), and did so in a mediocre way that's just disappointing.

duxup 4y ago

This reminds me of what I see happen in sports sometimes. Fans decide it is time to trade Player X. Next move is to find someone to replace them ... they then describe someone just like Player X. A YouTube and Google split would setup a situation where they both seem to be a pretty good fit for each other.

noizejoy 4y ago
In sports, you need to replace players, because they age out of their prime. It might be interesting to apply similar thinking to technology.
- duxup 4y ago
  “Sure he is still playing well but Aron Judge is using an out of date version of React router.”

madrox 4y ago

I'm reminded by calls for Apple to buy Nintendo. It focuses on a very specific upside while ignoring or hand-waving away all the challenges that would likely kill what makes these companies work.

sircastor 4y ago
I see the same kind of thing for Apple to buy Disney. In the abstract, the money and some shared goals make sense, but the reality would be a very challenging struggle to combine two ideologically different companies.
- 8note 4y ago
  I'd see Disney as buying Nintendo, rather than Apple doing something with either of them. Both Disney and Nintendo operate on brands and content IP. Both keep releasing the same content but updated to dedicated fanbases
  - madrox 4y ago
    I once advocated at this when at Disney, but the truth is that Nintendo has no interest in selling to anyone and they don't have to

jimnotgym 4y ago

I have no idea about the utility of divesting YouTube but on this point... >YouTube clearly shares a lot of infrastructure with the rest of Google, especially datacenters and ads. I don't see this as a particularly thorny problem. Normally in a divestiture. Newcorp would just sign a 5 year infrastructure deal with Alphabet, and a 5 year deal for it's ad space. That is plenty of time to resolve any lingering issues. I wouldn't be surprised to see Alphabet divest some business, however I think it is unlikely to be for tech reasons. It is more likely to be financial engineering, as growth stalls and share prices need protecting.

danpalmer 4y ago
The problem is there’s no clear split. Some infra is owned and developed by YouTube teams, some by Google teams, and it’s hard to figure out the balance and usage and so on. I’m some case you might have a service used by a Google product, operated as a platform by a YouTube team, that uses Google Cloud services, and runs on Google infrastructure. And the SREs may be “paid for” with YouTube budgets. Who pays who? And how much? It’s not as clean as, say, treating these things all like cloud services provided by an infrastructure provider.

make3 4y ago

I feel like one of the only ways Youtube can be profitable is by having integration and being a first class citizen Google cloud's infrastructure & tech.

bloodyplonker22 4y ago

Additionally, it's not quite right when the author compares YouTube to TikTok as direct competitors. I have used YouTube to learn an insanely great amount of new things which range from programming to car and home repairs. You cannot do this on TikTok.

zamnos 4y ago
Yes you can. There are tons of "home hacks" and "car hacks" videos. Hell, the whole "kia boys" auto theft phenomenon is driven by teens learning how to boost late model kias via tiktok. (https://www.inquirer.com/news/kia-boyz-challenge-tiktok-philadelphia-car-thefts-20230222.html https://www.inquirer.com/news/kia-boyz-challenge-tiktok-phil...) As far as programmings tips, just yesterday I learned about Python's casefold() function, which superceeds lower() for comparing internationalized strings. "Strasse".lower() != "Straße".lower() "Strasse".casefold() == "Straße".casefold() https://www.tiktok.com/@indentlyreels/video/7200305938614586630 https://www.tiktok.com/@indentlyreels/video/7200305938614586... (If you want that sort of content, watch the video in your tiktok app to prime the algorithm to surface more similar content to you.) Also in case you weren't aware, Tiktok now also supports longer videos - https://www.theverge.com/2022/2/28/22954525/tiktok-maximum-video-length-10-minutes https://www.theverge.com/2022/2/28/22954525/tiktok-maximum-v...

valley_guy_12 4y ago

Just as a point of interest, AIUI the names "Schumpeter" and "Babbage" are "house names", not the real names of the people who write the columns. Any given column might be written by anyone, and it would still use the same house name. Shumpeter and Babbage are the last names of famous people in fields related to the columns topics.

kqr2 4y ago
https://en.wikipedia.org/wiki/Robert_X._Cringely https://en.wikipedia.org/wiki/Robert_X._Cringely is another interesting example, however in this case, Mark Stephens actually took over the pseudonym after he left InfoWorld: After a financial disagreement in 1995, Stephens was dismissed from InfoWorld and was promptly sued by IDG to prevent him from continuing to use the Cringely trademark. A settlement was reached out of court that allowed him to use the name, so long as he did not contribute to competing technology magazines
- astrange 4y ago
  That's not just a guy's name? Was I confusing him with Robert Scoble the whole time? …Robert Scoble was accused of sexual assault and later converted to Islam? https://en.wikipedia.org/wiki/Robert_Scoble https://en.wikipedia.org/wiki/Robert_Scoble I'm learning so much from Wikipedia today.

tehlike 4y ago

Spin off doesn't always imply spinning of infra or codebase. They could license each other their infra and libraries.

pmontra 4y ago

> YouTube clearly shares a lot of infrastructure with the rest of Google That's the least of the problems. If there is the will to spinoff YouTube they can agree to rent that infrastructure and the people running it for, let's say, five years and see what happens next. No software will move, nobody will change desk or laptop. Paychecks will come from the same company. Then they'll gradually figure out if they want their own infrastructure in case the goals of the two companies get in the way of each other and YouTube has little leverage against Google.

zeven7 4y ago
They use the same repo. And everything related (internal libs, code review system, issue tracking, code search, etc) comprises a lot of the shared infrastructure. Are you suggesting "renting a space in the repo"? I guess it's possible, but would be weird and could have crazy risks depending on how hard you try to push on the "independent" angle.