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Don’t forget that Waymo will always be a much lower margin business than search! Setting aside the decades of R&D expense, those cars require purchasing, mainte

Don’t forget that Waymo will always be a much lower margin business than search! Setting aside the decades of R&D expense, those cars require purchasing, maintenance, warehousing, etc.

hadlock 1y ago
Autonomous cars won't sue you, never sleep, don't go on strike, don't sleep 8 hours a day, keep driving when the car needs obvious repairs.
- edm0nd 1y ago
  >Autonomous cars won't sue you but the companies that own them will or their insurance carriers.
- next_xibalba 1y ago
  All that may be true. Human drivers are not the point of comparison. The search business is. Waymo will still always be a lower margin business than search for the reasons I enumerated. Waymo may end up being great business. But it is unlikely to exceed what search is/was. For that reason, press X to doubt GP's claim that Alphabet is undervalued. "IT'S PRICED IN" [1] [1] https://www.reddit.com/r/wallstreetbets/comments/eberem/everything_is_priced_in/ https://www.reddit.com/r/wallstreetbets/comments/eberem/ever...
  - hadlock 1y ago
    It's unlikely to exceed what search was, but transit is a much more reliable bet for continued revenue. I don't think anyone is betting on ad revenue being reliable at Google long term anymore.
crazygringo 1y ago
But the market is so, so much bigger. And the margins will likely stay high for a long time while there are few competitors, and their main competition is human drivers. Not having to pay drivers is an enormous source of profit.
- next_xibalba 1y ago
  As big as search!? Doubtful. The entire globe is unlikely to be the addressable market. China will never let Waymo in. India will undoubtedly field multiple worthy competitors. Europe is hostile to technological progress and even more-so to American tech cos. In most parts of the world, Waymo is unlikely to be able to deliver a positive gross margin business given the per-capita-income of most places. It could be a big business. In fact, I hope it is. Lives will be saved. But there is still a lot to be worked out, and the margins will never be as sweet as those of search.
  - lmm 1y ago
    Who pays for search though? Sure it's 100% margin, but it's 100% of not much.
minwcnt5 1y ago
I think the plan is that other entities will own and maintain the cars. That's why they're working with partners like Uber and Avis.
- next_xibalba 1y ago
  One of the main reasons to vertically integrate is to expand margins by squeezing cost out of the value chain. My point still stands: Waymo will never have margins as good as search.

Don’t forget that Waymo will always be a much lower margin business than search! Setting aside the decades of R&D expense, those cars require purchasing, maintenance, warehousing, etc.

hadlock 1y ago

Autonomous cars won't sue you, never sleep, don't go on strike, don't sleep 8 hours a day, keep driving when the car needs obvious repairs.

edm0nd 1y ago
>Autonomous cars won't sue you but the companies that own them will or their insurance carriers.
next_xibalba 1y ago
All that may be true. Human drivers are not the point of comparison. The search business is. Waymo will still always be a lower margin business than search for the reasons I enumerated. Waymo may end up being great business. But it is unlikely to exceed what search is/was. For that reason, press X to doubt GP's claim that Alphabet is undervalued. "IT'S PRICED IN" [1] [1] https://www.reddit.com/r/wallstreetbets/comments/eberem/everything_is_priced_in/ https://www.reddit.com/r/wallstreetbets/comments/eberem/ever...
- hadlock 1y ago
  It's unlikely to exceed what search was, but transit is a much more reliable bet for continued revenue. I don't think anyone is betting on ad revenue being reliable at Google long term anymore.

crazygringo 1y ago

But the market is so, so much bigger. And the margins will likely stay high for a long time while there are few competitors, and their main competition is human drivers. Not having to pay drivers is an enormous source of profit.

next_xibalba 1y ago
As big as search!? Doubtful. The entire globe is unlikely to be the addressable market. China will never let Waymo in. India will undoubtedly field multiple worthy competitors. Europe is hostile to technological progress and even more-so to American tech cos. In most parts of the world, Waymo is unlikely to be able to deliver a positive gross margin business given the per-capita-income of most places. It could be a big business. In fact, I hope it is. Lives will be saved. But there is still a lot to be worked out, and the margins will never be as sweet as those of search.
- lmm 1y ago
  Who pays for search though? Sure it's 100% margin, but it's 100% of not much.

minwcnt5 1y ago

I think the plan is that other entities will own and maintain the cars. That's why they're working with partners like Uber and Avis.

next_xibalba 1y ago
One of the main reasons to vertically integrate is to expand margins by squeezing cost out of the value chain. My point still stands: Waymo will never have margins as good as search.