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Google surpasses $2T market cap
- mrbluecoat 2y agoSo a company can make more than Australia but not be a monopoly? [1] https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(no...
- cherryteastain 2y agoGDP is similar to revenue, not to market cap. Google's revenue is significantly lower than the GDP of Australia.
- deleted 2y ago[deleted]
- adverbly 2y agoActually no: Australia GDP: 1.7T Google annual revenue: 0.3T Australia effectively creates an entire Google every single year.
- bdjsiqoocwk 2y agoNot that it's very relevant, but your comment made me wonder: for the purpose of making these comparisons, does it make more sense to compare GDP to a company's revenue or earnings? Why?
- deleted 2y ago[deleted]
- blackeyeblitzar 2y agoNo company should exist at that size in a society that has a healthy distribution of power and fair competition. These businesses need to be split up ASAP. And if they aren’t, they should be heavily taxed and heavily regulated. If you’re that big and powerful, you are pretty immune to competition since you can eat losses, copy ideas from others, push your services unfairly, bundle things, etc. We need higher taxes and new anti trust laws that actually do something based on size or a lower threshold of market share, even if there’s no evidence of consumer harm. Getting bogged down in lawsuits around old toothless antitrust law is why nothing ever changes. Also, at that size you’re basically like a government service. Companies like this should be held to standards as if they were publicly owned utilities, on topics like pricing or transparency or free speech or whatever.
- exe34 2y agoTax them on revenue. And introduce due process and minimum expectations for services - e.g. if you mess around with banks, you can get a basic account just to survive with. If you mess with Google, you can lose your lifetime worth of emails, contacts, photos, etc.
- carlosjobim 2y agoThey are taxed on revenue.
- exe34 2y agoIn which jurisdictions? The Google tax is still going after profits: https://www.investopedia.com/terms/g/google-tax.asp https://www.investopedia.com/terms/g/google-tax.asp This merely encourages more creativity in accounting.
- carlosjobim 2y ago> In which jurisdictions? The jurisdictions that have sales tax. Sales are revenue.
- deleted 2y ago[deleted]
- VirusNewbie 2y agoIt's amazing that you're the third person on this thread to not understand what market cap is.
- medo-bear 2y agoMarket cap refers to size. The comment you are replying to is talking about size
- apantel 2y agoSo many ads… Edit: but it’s so apt. What that valuation is actually showing you is the value of sitting in between people looking for things and people looking to sell things to people looking for things, and turning that position into an ads engine increasingly at the expense of enabling people to find what they are looking for. The valuation goes up to the extent ads are prioritized over just getting out of the way and giving people what they are looking for.
- winwang 2y agoI agree, but isn't that partially because the ads work? If they didn't, ad revenue would stagnate.
- grobbyy 2y agoWhat's interesting to me are: - market cap - random layoffs - overstaffing - falling competence A lot of frictions build in there. I'm curious how it will play out. I tend to translate market cap for big companies into dollars per person. 8 billion people in the world, so Google expects $250 profit per human being in average to be accurately valued. That feels high, but what do I know?
- Axsuul 2y agoMarket cap is not profit
- nabla9 2y agoTheir P/E is 26. Same as Apple and Meta. Microsoft is 35.
- modeless 2y ago> Google expects $250 profit per human being in average to be accurately valued I don't think your calculation makes sense. You ignored the earnings multiple. Companies are valued at a multiple of yearly earnings. A reasonable multiple is 20, so divide 2 trillion by 20 first, then by 8 billion, and that's $12.50 per person per year. Their current revenues are already over $9 per person per year! Now consider that in addition to search Google owns the single most widely used consumer operating system and web browser, the largest video site, a growing cloud business, the only alternative to Nvidia silicon for AI that's been deployed at scale, and other stuff like Waymo that has the potential to be enormous (it seems like a winner take all market to me, where the winner essentially owns all ground transportation, and Waymo is in the lead by far), plus still the largest AI research program in the world (even if it has had trouble turning that into products so far).
- mlyle 2y agoCompanies’ intrinsic value is the present value of the future cash flows they’ll generate. One way to guess at this is some multiple of current earnings based on what you think growth possibilities and risks are.
- Bostonian 2y agoJust because of inflation you would expect more companies to exceed 1 and 2 trillion dollar market caps over time. Their existence is not a problem to be solved. Google search, maps, email, books, scholar etc. are wonderful services that have created immense value.
- ein0p 2y ago2 trillion dollars worth of value, though? Doubtful.
- NotYourLawyer 2y agoMarket cap has almost nothing to do with value already created. It’s the consensus guess at the discounted value of future cash flows.
- foolswisdom 2y agoFuture cash flows is usually pretty strongly related to the current state of things, but adjusted based on expectations of how it will play out in the future.
- xorcist 2y agoI'd be surprised if a non-negligible fraction of investors actually made that calculation. Most buy for other reasons. Then we have the ginormous index funds who buy when buys are happening. We just collectively decided that the best thing for society is if everyone just buys stocks for their savings. Either directly or through pension funds. And now we're pretty much stuck with that.
- NotYourLawyer 2y agoWell, that's not actually the stock price. But it is a rough floor on the stock price. Meme stocks can get bid up into crazy territory and stay there arbitrarily long. But if a stock goes way below its fundamental value, someone will buy the company at that discount.
- fakrona 2y ago[flagged]
- ChrisArchitect 2y agoRelated: Google Earning Q1 2024 [pdf] https://news.ycombinator.com/item?id=40162354 https://news.ycombinator.com/item?id=40162354
- d--b 2y ago> its announcement of a first-ever cash dividend of 20 cents per share Ok so there has never been a dividend payment so far, so all the money investors get out from Google is from new investors that get in? Is that even allowed?
- kaashif 2y agoNo, the money for the dividend comes from Google's profits. Google is a very profitable company.
- papercrane 2y agoAll the money investors have gotten from Google has been in capital gains (i.e. buying low, selling high). There's nothing illegal or nefarious about that. In fact, it's extremely common, most stock investors gains will be from the underlying equity increasing in value. Dividends are just distributions that the company pays from it's available cash.
- coding123 2y agoOur national debt is so much that we need to give half a Google to China each year
- dukeyukey 2y agoChina only owns about $800 billion is US treasuries, so a one-time payment of 40% of Google should do.
- diob 2y agoTo be fair, debt isn't an indicator of anything but credit being used to build something now (aka an investment in the future). So we should be focusing on what that debt is being used to fund, more than the debt itself. In my opinion at least. Overall I agree though, the debt is massive and isn't actually being used to better anything within the USA.
- zamadatix 2y agoChina owns < half a Google of US debt (i.e. ~0.84T). I think you conflated that with yearly debt payments instead.
- lokar 2y agoOther nations holding us debt is a natural result of both the trade deficit and the USD being the world reserve currency. There is nothing really special or sinister about china holding US bonds.
- wslh 2y agoI bet there will be short peaks in the next years. Basically, ads declining and we discover they are a kind of scam for most companies (we don't know the real algorithm to handle the inventory) and/or legal actions around the world (e.g. Europe).
- echelon 2y agoI can't wait to use Google's own research on AI for content identification to strip out all ads forever. Even inline ads and submarine / subliminal advertising can be detected and excised.
- wslh 2y agoThe open source LLMs are working fine for image recognition. We have used the technology internally. For example, someone took a selfie in front of a mirror and the description as a result of the prompt also recognized that there was a mirror image there.
- bluedino 2y agoI wonder what % is from ads that are straight garbage. AI generated celebrity voices, information on how to get the latest "stimulus" money, marketing schemes involving things like audiobooks or real estate, health scams...
- cloudking 2y agoI've noticed an increase in really poor AI generated dubbed video ads, it's an interesting problem, they are not flagging these very well.
- pennomi 2y agoDo they have an incentive to stop those ads? They get paid to run them after all. This is the perpetual problem with scammy advertising - the ad network would lose money if they controlled it, so they don’t try very hard.
- mehulashah 2y agoGoogle is doing what the street wants, which is a proxy for shareholders. The increase in ads revenue, the first ever dividends, and the layoffs. These are the tools that the leadership have, and mostly short-term. The long-term innovations haven’t really taken hold. So, this may be the flame burning the brightest before it goes out.
- patrickaljord 2y agoThey still have one of the best AI tech now and for the foreseeable future (despite their woke filters) and a decent cloud platform. And of course as you say they have Ads but also Android. I do feel like they could do 100x better but I think they're still relevant innovation wise (and financially obviously).
- mehulashah 2y agoThey certainly have a ton of relevant technology and product. But, much of that hasn’t taken hold — translated into large ever-growing, profitable businesses. Android, Chrome, etc are all mechanisms for their ads business and are not new innovations. AI is definitely new, but the jury is out.
- mehulashah 2y agoWhile the cloud is an asset, I believe that it’s not innovative. Google Cloud is a distant third — they’re largely following. It exists because clouds require a certain scale and completeness, and they have the money to invest. Again, the jury is still out here.
- wenc 2y agoI know Shopify uses GCP. I'm curious, folks who use GCP, how is it?
- mehulashah 2y agoThere are plenty of customers using Google Cloud. It made $9.6B last quarter, that’s 28% increase from the prior year, and operating margin of 9.4%. In contrast, AWS made $24.2B, with 13% growth, and operating margin of 30%. The point is that Google is buying the growth, which eventually runs out. While that’s a reasonable business strategy — it’s not the same as innovating a new business.
- xyst 2y agoLayoffs are paying off, congratulations. I guess. Trading the core of the business (or whatever is left of it - ie, "do no evil") in exchange for short term gains. Maybe we will see more "Project Nimbus" initiatives. Maybe a collaboration with North Korean, or Russian governments. Maybe this time they will sell out for $10B+ or more.