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Comment by alberth | Hacker News Reader

Wow, they are generating ~$1.5M/employee ($220B annualized / 140k employees).

Their efficiency at that kind of scale is insane.

Alphabet has a huge number of contractors that aren't counted in that number.

Previous leaks suggested that they have more contractors than employees: https://www.cnbc.com/2018/07/25/alphabet-google-employed-mor...

OK so 750k per worker. Still pretty impressive!

I’m curious, What work does contractor do ?

The common case is roles outside Google's core competencies, e.g. janitors and cooks.

As you would expect at a company Google's size, there are exceptions to this. Security guards aren't contractors on the MTV campus, but they are on nearly every other site. On the flip side, I've heard anecdotes that some SWEs are temps but I'm not sure of the details there.

They are mostly content moderators, which definitely shouldn't be outside Google's core competencies.

Oil companies have even higher revenue per employees.

Yes and much like tech companies outsource their entire campus staff to contractors, oil companies operate a web of companies that a handle all the hard heavy field work.

A firm like NRG only has 5000 official full time employees but have tens of thousands of oilfield workers, also protects them from legal liability.

What do you think is the ratio of Google non-employee campus staff to Google employees?

No need to think what it is, we know what it is, permanent contractors make up over half its workforce according to leaked documents:

see -https://www.fastcompany.com/90355826/leaked-doc-google-has-1...

And require SIGNIFICANTLY different capital outlay. The comparison is useless.

The question is if they generating this much per employee, why employee does not get 30%? They are okay to charge app developers this much in app store, so why they think the effort of employees is not worth 30%? If I was their employee, I'd quit.

Job market is just a market, and there is no law on how much employer should pay. Employee chose one company over another on an absolute number basis, not on the ratio.

Because Google is among the highest paying employers so employees leaving will never get a substantial raise?

Realistically 10k ads employees are earning $30M each and the other 130k employees are losing $600k each.

it must be great working with you

Please don't cross into personal attack. Regardless of what you feel you owe another commenter, you owe this community better if you're participating in it.

https://news.ycombinator.com/newsguidelines.html

Lol, great explanation.

Maybe they should just get rid of organic results in Search, and just show Ads. Surely that would be more profitable.

With the top four or five results on Google generally being ads, they have essentially already done this.

It really depends on your queries, usually only high commercial intent queries will have these top 4-5 ads.

This is the case

aka "you could be making so much more money if you didn't spend a bunch of your time sleeping, eating and showering".

No, this is a fairly common criticism of public companies: stock markets don't like conglomerates, they value them at a discount [0]. It gives less power to stock holders. Investors should be able to decide whether they want to keep their position in a browser company or a mobile phone OS company instead of Google managers deciding it.

Instead of having one highly profitable company focused on ads that pays out excellent dividends, Google leadership chose to spend it on lots of expensive employees instead.

A good counter argument to this is that if Google didn't do it, then a significant portion of their valuation would vanish due to the issue that in technology, companies which can't transition to newer revenue models perish as technology evolves.

So personally I don't agree with the criticism, but I think it's legitimate.

[0]: https://www.investopedia.com/terms/c/conglomeratediscount.as...

It also doesn't values the leverage owning complete ecosystem gives the company. If Apple decides to split iPhone, iOS, iPad, AppStore, Music/Content in different companies the value will be much lower than of a company together. Total>Σ(parts)

I'm confused by the conglomeration argument... even beyond the innovator's dilemma aspect.

The conglomerate market cap may be less than the sum of its parts at any given instant, but that completely discounts the strategic interplay between subsidiaries that results in substantially larger growth prospects & marketshare capture.

This isn't universally true -- e.g. GE Healthcare & GE Aviation probably have very little overlapping strategic benefit. However, Google Adwords, Adsense, YouTube, Gmail ads, etc all benefit from common infrastructure & distribution. Or in the case of Berkshire, the ability to gobble up new investments relies on the tax-advantaged leverage of the insurance float.

I know you're just being satirical, but this kinds of arguments are brought up quite frequently even in serious debates. But the reality is that:

  1. Ads depends on its cloud and core infrastructures to run its system.
  2. Majority of its revenue directly comes from owned and operated properties, such as Search and YouTube Ads.
  3. Chrome and Android have been key strategical components for being independent from other platforms. Google Ads won't be profitable as is if other OS/browser had 100% market dominance.

If you includes all of them, I think it's more of 6~70k employees rather than 10k.

Ads doesn't depend on GCP at all.

It just runs on the cloud

What stops them from running it in AWS or Azure?

Huge, sophisticated infra investment that trumps anything MS or Amazon have on offer. No, k8s doesn't compare, and neither MS nor Amazon even have the physical machines to handle existing ads and search traffic without a multi-year, 11-figure data center build out.

Cloud infrastructure doesn't necessarily mean only GCP as a product, but all the computing and network resources shared across the fleet.

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