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This article is aggressively awful. His entire premise: "According to the company’s 2013 financial filings, 83 percent of Google’s revenue came from ads, abou

This article is aggressively awful. His entire premise: "According to the company’s 2013 financial filings, 83 percent of Google’s revenue came from ads, about 7 percent from Motorola (which is now gone), and 10 percent from everything else. In other words, when you add up all the revenue from Google Apps (Gmail, Docs, Drive, Maps, etc.) together with the Android and other mobile businesses, and then add Chromebooks, Chromecast, Chromeboxes, and everything hardware and everything Chrome, Google Developers Network, Google+, Google cars, Google robots and drones, Google Glass and other wearables, Google Cloud, and everything else in the Google world, you get $5 billion or 10 percent of Google’s revenue." is completely wrong because Google's ad revenue cannot be separated from its products outside of Search. Google+, Gmail, Docs, Drive, Maps, Android and Chrome are all designed to add to their ad revenue. Saying that Google's ad revenue is the vast majority of their non-Motorola revenue, therefore Google's non-Search products must not be adding much to the bottom line is to conflate Google's advertising businesss with their Search product, when Search is one of their many products that lead to their advertising revenue. Once you destroy this premise, this whole notion that Search is the only thing Google does well (or makes a lot of money from) becomes obviously absurd. Gmail, Google Maps, Android, Youtube and Chrome are all market leaders in absolutely gigantic markets. Edit: The synergy between many of Google's products and advertising should be obvious. They all capture information about the user, which improves their ability to display "relevant" ads or at least ads that advertisers will pay more money for. They also prevent other dominant players in that space from getting a foothold in advertising. Chrome and Android ensure that Google's various services are not a disadvantage on the web and in mobile computing respectively and may gradually be used to advantage their services over competitors'. Edit2: jjoonathan, your point regarding Amazon and competitive threats they face is correct, but it has very little to do with the article, which is taking Google's successful position for granted and asking how they got there. And the idea that Gmail, Maps, Android and Chrome haven't helped and won't help in the future is fairly absurd. Edit3: Multiple downvotes seem a little fishy, as does this article getting voted to the top of Hacker News. Edit4: Another thing the article is ignoring is that Google's continued dominance in search and web advertising is a massive accomplishment that was not at all guaranteed from its initial success. And its massive investment in engineering that the author sees as excess I'm sure has a lot to do with how it was able to sustain that dominance.

jjoonathan 12y ago
Google has some very impressive moats, but the real question is how much protection they actually provide. Business-idea-space is super high dimensional. You can't just walk the perimeter and say "yep, the moat protects us from all viable routes of assault." Specifically, if all the valuable searches start going through Amazon how quickly can Gmail, Google Maps, Android, and Chrome make up the missing revenue? Of the products you listed, Youtube is the only one that I think is really orthogonal in the sense that it could bring in significant revenue if google's core product were disrupted. Perhaps maps and docs as well, to a much lesser extent. Gmail and chrome exist in competitive enough market spaces that I don't see them being able to stand on their own at all. It's the familiar old adage about backup systems: interdependencies lead to concerted failures. A nuclear reactor with 500 backup systems that all depend on having a stable electrical supply isn't safe at all.
- arfliw 12y ago
  Android could. If they spun that off into it's own company it would be worth tens of billions, minimum. It's headed toward a mobile OS monopoly. It would be difficult to overstate how valuable that is. AdSense could as well. They roll that into 'advertising' but it has nothing to do with search or any of G's products - and it's a huge chunk of their advertising revenue. Even if search lost all of its marketshare overnight they would still bring in many billions every year via AdSense. (AdSense is their ad network where they display ads on 3rd party sites, acting as a middleman between publishers and advertisers).
  - jjoonathan 12y ago
    > Android could I honestly don't know enough about the Android business to comment. > AdSense has nothing to do with search I think you're focusing far too much on the technology and not nearly enough on the power that comes with being king of search. What if Amazon or Facebook manage to come up with a truly compelling business offering that competes with the open internet (the former by controlling logistical infrastructure, the latter by controlling social infrastructure, and both by reducing payment friction)? A shift would happen where the purchase point moves from the "open internet" (which is really Google's walled garden) to Amazon/Facebook territory. Suddenly AdSense becomes less attractive than a Amazon/Facebook affiliate alternative and webmasters everywhere switch to the option that pays better. I sincerely hope this doesn't happen, but I don't think it's particularly far-fetched.

jjoonathan 12y ago

Google has some very impressive moats, but the real question is how much protection they actually provide. Business-idea-space is super high dimensional. You can't just walk the perimeter and say "yep, the moat protects us from all viable routes of assault." Specifically, if all the valuable searches start going through Amazon how quickly can Gmail, Google Maps, Android, and Chrome make up the missing revenue? Of the products you listed, Youtube is the only one that I think is really orthogonal in the sense that it could bring in significant revenue if google's core product were disrupted. Perhaps maps and docs as well, to a much lesser extent. Gmail and chrome exist in competitive enough market spaces that I don't see them being able to stand on their own at all. It's the familiar old adage about backup systems: interdependencies lead to concerted failures. A nuclear reactor with 500 backup systems that all depend on having a stable electrical supply isn't safe at all.

arfliw 12y ago
Android could. If they spun that off into it's own company it would be worth tens of billions, minimum. It's headed toward a mobile OS monopoly. It would be difficult to overstate how valuable that is. AdSense could as well. They roll that into 'advertising' but it has nothing to do with search or any of G's products - and it's a huge chunk of their advertising revenue. Even if search lost all of its marketshare overnight they would still bring in many billions every year via AdSense. (AdSense is their ad network where they display ads on 3rd party sites, acting as a middleman between publishers and advertisers).
- jjoonathan 12y ago
  > Android could I honestly don't know enough about the Android business to comment. > AdSense has nothing to do with search I think you're focusing far too much on the technology and not nearly enough on the power that comes with being king of search. What if Amazon or Facebook manage to come up with a truly compelling business offering that competes with the open internet (the former by controlling logistical infrastructure, the latter by controlling social infrastructure, and both by reducing payment friction)? A shift would happen where the purchase point moves from the "open internet" (which is really Google's walled garden) to Amazon/Facebook territory. Suddenly AdSense becomes less attractive than a Amazon/Facebook affiliate alternative and webmasters everywhere switch to the option that pays better. I sincerely hope this doesn't happen, but I don't think it's particularly far-fetched.