Hacker News Reader

Comment by ProjectArcturis | Hacker News Reader

Google now seems deep into the enshittification [1] process. Of all the big tech companies, they seemed the most customer-friendly, the least constrained by the need to optimize their money hose. But I guess the economic logic of tying executive compensation to short-term share price simply overwhelmed other considerations. The stock must go up, so revenues must grow, so Google must monetize everything to the maximum extent.

There is (or was, anyway) an opportunity for a very long-term play in which Google or similar companies resist the profit urge, make enough money to cover costs and sock away plenty for moonshots and continued development. Focused on optimizing products for users, rather than for revenue, they could have become the Everything platform.

But I guess now it's time to start looking at different email providers.

[1] https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys

View on HN

Customer-friendly? Maybe if you've never required support or human engagement for any issue. If you have, Google is by far the worst among the big tech companies.

If you have Google Fi, it's surprising how good support it. Create a request and a real person calls you within 5 minutes to help out. They are actually helpful as well.

The best part is you don't go through 15 minutes of robo voice assistance debugging hell.

I have Google Fi and I believe your information is out of date. When it turned from Project Fi to Google Fi there were other changes made, and support turned to absolute crap. Not only that but buying phones from Google Fi is super risky now, as the phones keep getting stolen in transit and then Google refuses to do anything. Even more of an issue is that they've outsourced their phone insurance to another company that denies all claims.

Google Fi is a perfect example of how horrible Google is at customer service. They start new projects with reasonable CS but they simply can not scale it as the service takes on more users- or they drop it on purpose to improve their margins.

I have Google Fi, and I like the support, but I also want to call out that being better than the other telcos is a very low bar.

I was a user of Fi for years and I think you’re misstating the premise here. It’s good customer service, not just good in comparison to telcos.

Yeah, isn't this the company that is notorious for screwing account holders with AI automoderation? Like the Terraria dev that was reportedly locked out of his email while working on a Stadia port.

Except maybe eBay. I wanted to call eBay and ask how I purchase a support contract so I could report a bug in their returns system, but there's no way to contact them for that. But yeah... they're at the same level.

I almost lost ~$10k when selling some NVIDIA GPUs on eBay but the buyer claimed they had "fallen out" of the box.

I had insurance on the box but the buyer wouldn't return the box to Fedex for inspection. (Because it was fraud)

Getting this fixed was excruciating and ended up having to DM people on LinkedIn and guess their internal e-mail addresses to get this resolved. Absolutely horrible!

Just had an excellent experience getting a warranty exchange on my Pixel Watch that stopped taking a charge. Talked to a real person within 2 minutes and the whole call was complete in 18 minutes.

"Seemed" is the operative word here. Past tense, and indefinite.

Atleast Google gives you help to unlock the bootloaders. Not like crap apple walled garden

>the least constrained by the need to optimize their money hose

Not entirely true. They are squeezed left and right by Apple. Google pay Apple per active user as the default search engine. As Apple continue to increase their user base, the higher the total cost for Google to remain default. All while Apple, in the name of privacy and fundamental human right, started a crusade against online ads, mainly targeting Facebook but tactically taking Google along with it. In order for Google and Facebook to keep the same profit margin with declining CPM, they have to place more ads to compensate for it. Which is the whole starting point of enshittification. This may also have some negative side effect on Google image and Android, and more people switching to Apple.

>There is (or was, anyway) an opportunity for a very long-term play in which Google

There was never any long term plan or strategy from Google. Moonshots were like a fun project to work on with zero business planning. Google never had a product mindset. They could have done what you wrote, they could have battled Microsoft for OS dominance, they could have done shit loads of things. But they didn't. I have been watching Google before they even IPO. For vast majority of its life they have always been in a more money ( or capital ) than they know what to do with it.

Put this in to perspective. Alphabet had $282 BILLION in revenue in 2022. I don't know exactly what they will pay in 2023, but in previous years it was somewhere around $10 billion a year.

Google incentivizes it's employees in a certain way. Those employees have a very high expectation of not only income but wealth.

Management has demonstrated an ability to waste an enormous amount of that money (Alphabet/Google is certainly not alone in that regards.) Because they own a monopoly they can get away with it. Because the monopoly is in advertising they don't have to be that exceptional in terms of delivering new and improved products. Because of the stock ownership structure and because they've had tremendous revenue growth for so long they really haven't had to answer to their investors about their failure and waste. In some regards a lot of those investors are asleep and don't really understand what is going on.

However, the managers need to crank the monetization dial to hit whatever incentives are set for them to become wealthy or grow whatever wealth they already have.

This is a bag of tricks (the monetization dial) that has worked well for over a decade. When it runs out, Google's revenue growth will end and employees will no longer get to become wealthy by being employees. Maybe they will suddenly get a lot of capital discipline and experience a second wind like Microsoft appears to have. Maybe they will start looking more like Yahoo. To be determined.

> They are squeezed left and right by Apple. Google pay Apple per active user as the default search engine.

I don't know if I would call that squeezed. They aren't required to be the default search engine. They run the bigger global platform (Android) and I would guess they get to be the default there for free?

Their financial model is similar to a TV or newspaper.

Imagine you create a newspaper, you start out showing no ads, lots of people buy it, it is all good.

Then you raise money from investors to grow, and they start asking for more revenue. So you add one advertisement.

Then the investors want out, so you have to IPO...more ads. Then you have to keep the share price up because execs want options, and your HR consultant tells you that the "top" execs need to see a rising share price (as if you need a "top" exec to add more ads to a webpage)...more ads.

The ability to add more advertisements is limited by the space in the newspaper, but there is almost no marginal cost associated with adding more ads. So it looks like very clean growth, very strong economics.

This is basically how Google and Facebook work. Their revenue growth looks puzzling because they seem to achieve very consistent, very predictable revenue growth with no extra resources. The reason why is that they can add more ads to a page very easily, and can control their level of revenue growth so they can keep employees/investors happy (in that order). It is true that they have also achieved some pricing growth but that advantage has been capped (and is largely a function of their monopolistic position, i.e. Doubleclick allows Google to play both sides). Most of their growth has been increasing ads per page.

There is no way for them to function as public companies in this environment (again, I would say the situation with employees is actually taken more seriously than investors) without making their product worse. They won't stop before the product collapses.

And the end game [for the newspaper] is to get rid of articles, puzzles, cartoons, letters from readers, get rid of subscriptions and go 100% advertisement. It is entirely possible for google to go there. Search being free is really half way there already.

>The ability to add more advertisements is limited by the space in the newspaper, but there is almost no marginal cost associated with adding more ads.

You are also limited by potentially causing users to stop buying the newspaper. Google will be matching the metrics to see if users actually use the app less when adding more ads. It's possibile there will be no statistically significant difference and consumers are okay with the new ad level. If they start leaving Google can revert the change.

When users start leaving, they will not return if changes are reverted because they will have lost their goodwill. It would take more than a reduced ad load for me to go back, for example.

As I said, there is almost no chance that they reverse before the product is killed because they are optimizing for revenue, not user growth (and when you take this at the margin, increasing ads per page is the only way).

I have never seen a company stop before this point either. The institutional imperative to continue gaming the numbers is overwhelming.

>Most of their growth has been increasing ads per page

Hasn't most of their growth come from a growing number of internet users?

Yes, that is correct. The assumption in the example is that users are flattish, and you need to "do something" to get marginal growth.

In the early days, you saw very real pricing growth (due to better targeting) and volume growth due to user growth. Over the last ten years or so, I believe that a lot of the growth has been greater ad density, and ad density is much more important for controlling financial results...which is the key point when it comes to exec behaviour. Execs can't turn on user growth, they can add more ads to a product if they see numbers coming in light.

If the user has no money his eye balls aren't worth much.

But the user does have money everywhere. India's GDP has long surpassed that of the UK and is quickly approaching that of Germany.

I'm getting old sorry. I didn't know India had such wild growth in internet connections. They went from 4% coverage in 2007 to 48.7% in 2022. woah!

Japan CPC $1.32 CPM $0.38 United States CPC $1.09 CPM $0.22 Poland CPC $0.26 CPM $0.06 India CPC $0.25 CPM $0.13

funny numbers! 1.09/0.22 = 4.95 while 0.25/0.13 = 1.93 !?! Apparently Indian eyeballs are really expensive!

Fun stuff, thanks.

> But I guess now it's time to start looking at different email providers.

Already moved to Proton personally, I was OK with Google G-Suite or whatever the hell it's called these days when it was free, because I was trading my data for a pretty good service, but then they wanted to slap a price tag on it simply because they could, and to me that was a clear signal it was time to get out.

I'm not paying for Google to monetise my data.

Protons spam filter isn't as good, the keyboard shortcuts are taking some getting used to (really wish they would implement a "Gmail-like keyboard shortcuts" option), and message search could be improved (I'm sure it will), but besides those I don't miss a thing, and knowing that my privacy is respected is by itself worth the price tag.

I wanted to like Proton, even paid for it, but their apps are _bad_. I switched over to Fastmail after a year.

They are kicking things up a notch recently in my opinion!

Am I naive to think that when you make $226 million in a year like Pichai that money should stop being your major driving force and that your reputation is more important? Like what else could he buy? But his reputation is taking severe hits. Maybe I just don't understand ultra rich people though. Maybe money is everything.

Part (and I do mean part) of the explanation is that people’s expectations around peer group and lifestyle changes. He’s probabaly looking at Larry Ellison and feeling poor, and that he needs to have (make up a number) $1b in the bank to support his lifestyle (planes, houses, hobbies, philanthropic giving, etc.). I bet if you asked in 2004 (pre-google) what the comparable number was, it was like $20-40m…

What type of lifestyle does $1 billion make available that is not already affordable with $200 million?

Mega-yachts and associated maintenance, larger private jets and associated maintenance, naming any given building or school etc. in the world after yourself

I'd classify those things as ways of showing off your reputation, not improving your quality of life. Once your yacht is of a certain size, the only reason to make it bigger is to demonstrate how much wealthier you are than other yacht owners.

And that's fine, but I wish we lived in a society where "runs a company that doesn't mistreat users" (or treats employees well, or helps the planet, etc) was clearly more important to someone's reputation than the size of their yacht.

> Once your yacht is of a certain size, the only reason to make it bigger is to demonstrate how much wealthier you are than other yacht owners.

This may or may not be the opinion of people in the position to actually assess it. It can be the difference between being able to go to a place you want to go or not, based on range or seaworthiness. It can be the difference between having an amenity on the craft or not.

You’ve already missed the point - it doesn’t matter. It’s that peoples’ expectations change.

(Yes there are diminishing marginal returns etc., but once you’re used to X, 50% of X feels painful, even if 50% of X is still an extremely luxurious lifestyle)

> but once you’re used to X, 50% of X feels painful, even if 50% of X is still an extremely luxurious lifestyle

Let's say that X is your favorite food. If you already have 100x the amount you could ever eat, a 50% reduction won't feel painful at all, because you'll still have far more than you could ever eat.

I'd posit that at a certain point, you have more of everything than you could ever use, except for things that demonstrate your wealth to others. The naming rights to buildings are one example—they don't actually increase your quality of life in any way, they just show how wealthy you are.

Maybe I was wrong about the threshold for this, and it's actually higher than $200 million dollars, but it can't be that far off...

A few divorces.

Or a mistress or three.

A big yacht with a helipad in the Seychelles, and another in the Bahamas.

And you have to crew the yachts - usually more crew than passengers.

And a helicopter, and a private jet.

Those'll chew up 300 mill easily.

Yeah, I think compensation is a kind of score that the ruling class competes on.

It's not about whether they are happier, are making the world better, or have enough. It's only about having more at all costs.

The CEO just executes the will of the board, who in turn execute the will of shareholders (types A and B shareholders, specifically, for Alphabet) who are mostly focused on delivering maximum returns. If you look at the voting power of Alphabet shareholders, it is dominated (~60%) by Sergey Brin and Larry Page.

It is humorous to see posts laying the blame for increased ads on Gmail at the CEO's doorstep. What is Gmail's split of ad revenue compared to Search or YouTube? A hundredth of a percent?

Remember that these bigcos have tens of thousands of salaried employees, and those employees all get stock options. A bigco CEO might no longer be motivated by personal gain, nor by public reputation; but rather, by private reputation, within their own company, among their employees.

After all, their employees — especially the executives — are the group of people a CEO is surrounded by every working day. So, assuming they're neither a sociopath nor an Effective Altruist, why wouldn't they feel a strong empathetic desire to "help" the people right in front of them?

And presuming they want to help those people, why wouldn't they then conclude that the best, most scalable way they have to do that, is to make sure that those people are all set for life by holding high-value amounts of company stock; and that the most comparative-advantage-y way the CEO has of accomplishing that, is to make the share price go up?

Or, to put that another way: a pirate captain doesn't go home once they're personally rich. They made a (perhaps unstated) agreement with their crew: they won't go home until everyone is rich, and they can all comfortably retire. Until then, they'll continue to exploit others for their own gain.

>Am I naive to think that when you make $226 million in a year like Pichai that money should stop being your major driving force and that your reputation is more important?

Perhaps it is, but your reputation among which group? HN users or the other billionaires that you're hanging out with?

When you get that high up in a corp., your North Star is “shareholder value”, and you’re probably right to do that.

I wouldn’t want to and won’t if I was ever lucky enough to have the opportunity.

But what are the alternatives?

The alternative I was envisioning was similar to what Costco does on the retail side. Nearly every other retailer aims to maximize profits from their customers. Costco tries to offer the lowest prices it possibly can. This has huge implications for how the company is structured and where it uses its energy. Imagine a tech company that focused entirely on making the user experience as good as it possibly could, rather than one trying to extract as much money as they can this quarter.

Crashing your company does not create shareholder value.

Some people just don't care about things like that. They might pretend to care because that might get them what they want, but they see actually caring to be a weakness.

It's not about Pichai personally. By design, a company must deliver value to it's shareholders.

Wouldn’t half of that go to tax, though?

Poor Pichai would only end up with a meager $113 million after tax, so sad.

No. Just under 1/3 would go to taxes.

I was shocked the last time I used Google without an adblocker. The first 4-5 search results were ads. I had to scroll to get to the first actual result. There also seems to be less effort to distinguish ads from regular links.

I wonder which genius adsense manager thought "hey we could double our revenue if we show 4 ads instead of 2, user experience be damned".

I find it darkly amusing that the first five ad results are usually the same as the first five “natural” results. Which I click on depends on if if I hate them more than google.

Lol yup! "Should I make this company pay 25 cents to Google?"

> There also seems to be less effort to distinguish ads from regular links

That is a good thing, isn't it?

I misunderstood.

Obviously the “effort” is in the opposite direction

> Google now seems deep into the enshittification [1] process. Of all the big tech companies, they seemed the most customer-friendly, the least constrained by the need to optimize their money hose. But I guess the economic logic of tying executive compensation to short-term share price simply overwhelmed other considerations. The stock must go up, so revenues must grow, so Google must monetize everything to the maximum extent.

I'm surprised it this has taken this long to be honest. I expected everything to turn to shit with in a years of going public.

> tying executive compensation to short-term share price

We won't get anything other than this unless Google decides to do a huge round of buybacks and go private. The spice must flow because only growth makes money for the people who actually own Google.

>We won't get anything other than this unless Google decides to do a huge round of buybacks and go private. The spice must flow because only growth makes money for the people who actually own Google.

And after they go private why do you think they won't care about growth/money?

They will still care, but they have more freedom to take the longer view.

A longer view of what? Taking advertising market share from Amazon and Facebook? Let's be real, even if Google were private and didn't have to dance to the tune of Wall St come earnings season, it's not like they'd be using their billions for the betterment of humanity.

They have the freedom to take the longer view right now if they want. There's no law mandating they be driven by quarterly profits.

If you're public you must grow, if you're private you can choose when and how to grow based on what makes sense for the business. The only thing really pushing you is competitors and inflation. There are no shareholders/investors breathing down your neck for returns.

When you're private you can actually say, "you know what, I'm content where we are being filthy rich."

You can only comfortably say that if all of your co-investors are on board (or you have none - unlikely in Google’s case) and if you will never need to raise any additional capital for any reason. It’s very difficult to run a modern business, especially in tech, without being beholden to anyone.

All true, although in some cases you can avoid the "need to raise capital problem" by using normal business loans rather than selling ownership stake. You still need to grow to pay back the loan but you don't have the problem of new investors with their hands in the pot making demands.

Yes, but even then there’s a good chance your bank will impose covenants on you that are not necessarily aligned with your own goals.

But why do you think "investors/shareholders" are bad and private owners, good? Private owners are just 100% owning shareholders, whatever notions you have about one group you should have about the other.

You have no guarantee a private owner wouldn't speed up the enshittification process.

> You have no guarantee a private owner wouldn't speed up the enshittification process.

Sure, but as a private company at least you control who who wants to do that and are not bound by the "the price must go up" behavior of the shareholders since you only care about the dividends (this is a oversimplification).

> you control

You who? The owner?

> behavior of the shareholders

The owner is a shareholder too. It's all the same thing, you're creating distinction where there is none. If anything a public company has way more controls and transparency. People usually cry when a company is taken private by private equity to squeeze every cent out of it. What do you think private equity is if not "a private owner not bound by shareholders"?

I understand your sentiment but human history has shown us that "being content being filthy rich" is short lived at best. It is a way of keeping score and even people who no longer need to work at all don't just want more money, they want a LOT more money.

Perhaps only the famous/notorious people you read about. The industry drives CEO behavior, not individuals or even one class of individuals.

I think it's kind of interesting to think that Google has been doing this for a long time but they've been doing it at an uneven pace for different properties.

Search actually seems like it got this treatment first, and in a creeping slow way, and it wasn't even necessarily 100% Google's fault. It seems like it probably got pushed a long at first by SEO types.. and then at some point Google realized it was profitable to actually play along with the whole game.

Did you mean to say customer-friendly or user-friendly?

Are we still getting surprised by this? I feel like I've read a version of your comment on posts like this for the past couple of years.

And still we have sooo many devs who praise and glory their Google overlords. Chrome can do No Wrong. Android is Fantastic. Etc. It’s quite amazing actually.

I saw this a lot in like 2014, but it's been a while since I've run into anyone that fanboys Google or Android like they were in the past. People would fawn over Google.

Searching my old rants about AMP, they seem to swing from low/negative votes to higher vote counts around 2018.

I agree. It's been quite a while that every decision they made was on the worse side of things. It surprises me how regular it is. Especially since they have access to history of big wealthy corps, and big pockets.. but apparently not what it takes to correct course.

Most of the people at Google now got in on their third try. That means Ads/Search/Brain etc rejected them for not meeting the bar, but they kept on going because they wanted the brand-name job. Lots of employees who are open to serving the brand versus evolving it.

With only iOS and Android as realistic choices, we genuinely need a more viable (real) Linux phone soon. I have zero faith that Google will let something like GrapheneOS stay in the somewhat usable state that it is in now.

Ah yes, the phone where I will have to install some obscure drivers via some console command found on ubuntu forums from a 3 year old thread made by AssBlaster123 just to get microphone to work properly and then end up not having fingerprint scanner working because this particular phone uses Goodix or whatnot.

We don't need "real linux" phone, we already have mobile OS based on linux, it's called Android. You can decouple it from Google, companies already do that, it works. Whether an Android phone without Google services is a viable product is another discussion - and IMO the one we should focus on.

Reply on news.ycombinator.com