Hacker News Reader

Comment by whitepaint | Hacker News Reader

Do people forget the powerhouses that Youtube, Android, GCP, Gmail, Chrome, Google Maps, Chromebooks are (plus gazillion smaller companies like Waymo that have insane potential)?

People have been predicting the downfall of Google for a very long time now and yet they have never been bigger growing every year at astounding rates.

View on HN

Google bought YouTube in ~2006. If Ruth Porat saw the amount that it bled in its first two years, they would have canceled it then too. GCP is questionable, they're falling behind.

I think the issue is that Google, at the high level, is incapable of thinking long term. It wants to see runaway success in a quarter or two.

Not predicting a downfall but just to give you some perspective: 80% of Google's revenue is from advertising. They only disclose net income for three very wide segments: Services, cloud and other bets. Only three services - that is search, youtube and google play - are profitable. GCP, maps, Chromebooks, Waymo, G Suite (that includes Gmail, Drive, etc) are a net loss.

The comment above is saying that Google can't invest for the long-term and requires runaway success in a product or two.

Your argument (that Google currently has a portfolio of products that are a net loss) shows that they at least try. In particular, GCP and Waymo are really long-term and strategic investments.

Do you have any source for Youtube being profitable? They've only been starting publishing revenue for it recently, but as of Q1 2020 they were still hiding profits [0]

Some analysts I follow (I think Ben Thompson was in this camp) have been long speculating that it was actually operating at a loss.

[0] https://www.cnbc.com/2020/02/03/google-still-isnt-telling-us...

They started reporting both of those in the last quarter.

Youtube is profitable, GCP isn't.

https://abc.xyz/investor/static/pdf/2020Q4_alphabet_earnings...

I feel your comment only supports the points in the article.

I would say that YouTube, GMail, and Google Maps are all direct funnels into the Adsense machine.

Android, Chrome, and Chromebooks see success only as instruments to have infrastructure to more efficiently push users to use the Google products to direct data into the Adsense machine.

Any Google product that does not sufficiently funnel user data into the Adsense machine is canned. GCP exists as a covinient way to make some side money on their existing infrastructure.

I think only Waymo is the true outlier in this case, but I think that lives as it's own thing, given that's under Alphabet instead of Google proper.

I think people love to look at the products they've discontinued, and they have discontinued a lot, but they fail to point out all the products that have stuck around. I think it's likely a result of a company trying a lot of things rather than a company that can't focus like the author implies. People don't talk about Facebooks failed products like email, dating, phone, beacon, portal etc.

Portal has failed? That's a shame.

Is that likely due to a lot of those niche Facebook products simply launching to very little hype? Or simply only launching to a very select audience for essentially testing purposes?

I remember hype around the Facebook Phone and Facebook Email, but that's about it really. Email didn't really feel like a death either as the rest of Messenger continued to evolve to what it became today.

I feel that Google has messed up its Stadia offering big time by overselling the cloud gaming features and trying to do a lot too soon (stadia exclusive games etc.) but I was hoping that Stadia succeeds. The concept of cloud as computing platform to play games rather than locally owned consoles just makes sense to me and Google was in a unique position to implement as they have data center infrastructure in place along with experience delivering consumer facing products. Now I'm thinking if Xbox started at Google instead of at Microsoft then it would have been killed too soon and we would only have Playstation as a kind of monopoly in higher end gaming. I don't think Google would be so patient to keep investing for years to nurture that biz.

I don't think so, people are def aware of these projects. The problem is the stuff you mentioned (at least YT, gmail chrome, maps) are in a pretty rough spot.

And while Waymo might have an insane potential, it is just that, a potential.

Youtube and chrome are still largely dominating their market. Can you expand on those?

YouTube was a $15B business in 2019. Given that Google pays Firefox about $400M for search engine priority for its 4% market share, owning Chrome saves Google about $6B a year in payments for its 60% share. I bet that both maps and google apps for business (of which email is a core piece) are also quite profitable, depending on how cost accounting is done.

Why do you say they are in a "pretty rough spot"?

Also, Waymo became untouchable. A lot of Google's valuation rests on pixie dust promises of transformative potential of future AI. Admitting that it won't happen anytime soon and culling Waymo would take a lot of Silicon Valley ecosystem with it.

But all those things are just vectors for gathering personal data and serving ads.

Those are all great products with excellent IP, but outside of GCP (and maybe a next-gen bet on Waymo), none contribute to revenue lines outside of advertising. In a way, this argument only further underscores the article's point.

I do wonder about GCP. Microsoft and Amazon make money on their cloud computing, while Google is losing billions on GCP every year.

They said the costs are increasing due to the data centers they are building. Their revenues have been increasing at a steady tick and if you check their blog they seem to have a steady stream of new customers

https://cloud.google.com/press-releases

I was just under the impression that Google would utilize their existing infrastructure as Amazon did initially. If you have to build the whole thing upfront, it becomes a huge investment. The difference between AWS and GCP was contrasted pretty well by the Economist last week: Each year Google loses more money on GCP than Amazon has ever lost.

If that's true, then Google can't really compete with AWS.

Here is the Techcrunch article after the latest earnings

"Google Cloud lost $5.6 billion in Google’s fiscal year 2020, which ended December 31. That’s on $13 billion of revenue"

"On the one hand, losses are mounting, up from $4.3 billion in 2018 and $4.6 billion in 2019, but revenue is also seeing strong growth, up from $5.8 billion in 2018 and $8.9 billion in 2019. What we’re seeing here, more than anything else, is Google investing heavily in its cloud business"

"includes all of its cloud infrastructure and platform services, as well as Google Workspace (which you probably still refer to as G Suite). And that’s exactly where Google is making a lot of investments right now. Data centers, after all, don’t come cheap, and Google Cloud launched four new regions in 2020 and started work on others. That’s on top of its investment in its core services and a number of acquisitions."

https://techcrunch.com/2021/02/02/google-cloud-lost-5-6b-in-...

Reply on news.ycombinator.com