
Google’s stock slid after report on search ad decline - lnguyen
http://www.recode.net/2016/6/17/11966982/google-alphabet-stock-search-ad
======
msoad
As much as people like to consider Google revenu sources very diverse or dream
about future of other Google bets, Google is mostly an advertisement company
heavily relying on their search business.

It's obvious that Facebook has a better position for growth and adding new
channels for their ads business. I can see Facebook share of online
advertising grow in the next couple of years.

~~~
emilsedgh
In the Google vs. Facebook discussion, I think people seem to forget a tiny
detail:

Google has some products that are market leaders with heavy usage, eg:

* Search

* GMail

* Youtube

* Android

* Chrome

* Maps

* Docs

Its just that Google is unable to monetize many of them.

However, Facebook has only Facebook, Instagram and Whatsapp.

1) Instagram _is_ what Facebook was 10 years ago. Its not a new product. They
just bought it because Instagram was becoming _The Social Network_.

2) Instagram and Whatsapp were bought acquired.

What I'm trying to say is that Google is unable to monetize many of its
products. And if online advertisement gets doomed, it would have to look for
other business models.

But it _does_ have a very diverse set of products that people love.

What does Facebook have? and when was the last time they created something
people loved?

~~~
amelius
Of those products you name, GMail, Youtube, Chrome, Maps and Docs are near-
commodity products. These are just basic services for which open-source
versions exist, and every engineering team of about 50 people could easily
recreate them given today's state of technology. This also holds for Facebook.

The real struggle lies not in the technology, but in the _network-effect_ and
branding.

~~~
Jabbles
What do you think the thousands of engineers that work on these products are
doing? You realise that there's a lot more to these products than the web
interface?

~~~
amelius
They work on making it scale. But that is an activity that pays for itself.

------
pixie_
Somehow in 18 years and billions of dollars of revenue, Google has not figured
out another way to make real money.

~~~
walkingolof
They have not figured out how to diversify (in any way that makes the company
safe from a decline in search ads), thats their failing, they make boatloads
of money.

~~~
smt88
I actually think they _have_ found tons of ways to diversify. Google Glass,
Voice, and Wave could have been truly revolutionary if they had polished,
simplified, and mass-marketed them properly.

Google's problem is that they're terrible product designers and they never
truly focus on a product the way other companies do. Are you genuinely
delighted by any Google product these days? I'm having a hard time thinking
what they create that even could be delightful (that regular consumers can
buy, anyway).

~~~
dingdingdang
>> Are you genuinely delighted by any Google product these days

I like Google Search, it is good, plain and simple. Regarding any of their
other products: for sure no. Gmail works but creeps me out and as an admin,
relying on GApps is becoming an increasingly not-fun experience since they
rewrite the UI on a biweekly basis while leaving their documentation outdated.
Boring and agonizing to have to spent time on something that is essentially
easy except for the fact that the settings are hidden in an ever shifting
castle of (pixel)sand.

Android for me suffers from the same product instability issues, I much much
prefer the potential openness of Android to IOS but I certainly do NOT prefer
the overt way Google monetizes their users and after fighting with mediocre
Android hardware I've ended up with iphone. Low and behold it works, like,
plain and simple style.

Google has the resources, but the focus?!

------
karterk
I think internally, Google has already seen this coming and are trying to
steer the company towards AI-related verticals. Search revenue is going to be
always under threat because of the rise in mobile devices and also ad
blockers. Interestingly, installing ad blocking is harder in the mobile though
(requires a separate browser), than in the desktop browser (just another
extension).

~~~
sangnoir
> Interestingly, installing ad blocking is harder in the mobile though
> (requires a separate browser)

I think this will change soon - at least on iOS if Apple takes ad-blocking to
it's natural end. The not-so-subtle Apple v Google (and Google v. MS)
strategic corporate warfare has been enlightening and entertaining to me. I
had no idea corps would shake hands for the cameras whilst stabbing each other
in the back concurrently.

------
kelukelugames
Title of the article is "Google’s stock slid today and it _might be_ because
of this report on a search ad decline"

The post title exaggerates the claim.

------
mark_l_watson
When I worked as a contractor at Google it was amazing how much money they
apparently spend on infrastructure, buildings, people, food, etc. However,
they do sometimes bring in $16 billion a quarter.

Except for when I travel, I don't much use gmail and Google search. (When
traveling, I like booking using gmail, auto calendar and travel events,
notifications, etc.). Otherwise I use my own email, calendar, etc. and
DuckDuckGo.

I do pay Google about $25/month directly for Google Play Music, renting
movies, and extra GDrive storage.

If I were a typical customer, would a $25/month average spend per user be
enough to pay their expenses and generate sufficient profit?

Edit: dividing $4 billion per month by $25 per user per month yields a
required 160 million paying users per month to equal ad revenues.

~~~
Retric
Microsoft does not get 25$ a month from most people, they just have a billion+
customers. Google is in a similar situation and your probably vastly more
profitable than their average customer.

~~~
mark_l_watson
Microsoft gets much less money from my family. My wife and I spend $99/year
for Office 365 (mostly for the cloud storage, less for the office apps).

------
MaysonL
_Post hoc, ergo propter hoc?_ Typical Wall Street commentary BS. Why did
Apple's stock lose almost as large a proportion of its value at the same time?

------
kirkdouglas
It would be interesting to know how Google cloud services and other income
sources do contribute to company's profits.

------
Zenst
I equally wonder what the impact of Google/Alphabet supporting the TTIP trade
agreement that many deem evil will have impact wise. Indeed seen a few people
deemed that the straw that broke the camels back for them and dealings with
Google/Alphabet and not the other way around.

------
heisnotanalien
Say it's not true?! Search ad decline?! How will we survive?!

~~~
mahranch
I really dislike this train of thought and where it leads. Sure, everyone
hates ads and would do without them if possible. But people forget; ads
subsidize most "free" content. It has been this way for 60+ years, probably
more. You know when your grandmother tuned in to watch Howdy Doody? It was
always "brought to you by: Palmolive Dish Soap and Ovaltine!". Their ads
during commercial breaks paid for that show. Back then there were no dvd
sales, no streaming online contracts, advertisers paying for airtime to air
entertainment programs was a fairly straightforward affair. Or did you think
broadcasting companies created that content, then aired it for free out of
altruism?

I do believe this is a big part of why they call us millennials the entitled
generation. We literally expect everything for free. From our game of thrones
TV shows to our favorite blogs, podcasts and websites. They all exist to
entertain us and fuck them for wanting to make a dollar off their hard work.
How dare they...

~~~
dredmorbius
[https://news.ycombinator.com/item?id=7485773](https://news.ycombinator.com/item?id=7485773)

 _Nearly everyone has bought into the utter bullshit that advertising makes
the web free. This delusion buries not only the fact that we have made a deal
with the devil, but also that the deal really sucks. What we traded our souls
for we don’t even get. The web would be both cheaper and better if we just
paid for what we use straight up. And more importantly, society would be
better. I 'll explain all of these...._

It's not free.

It's more expensive.

It's even worse.

Eevilspock on HN, March 28, 2014.

~~~
mahranch
That's all speculative & hypotheticals. The whole "pay to play" or "pay for
what you use" model has failed time and time again on the internet. In fact, I
can't think of a single instance of that working on the large scale. It's a
pie in the sky pipe dream with no chance of working. A libertarian fantasy.

Isn't that ideology center to the anti-net neutrality stance? People who only
want to pay for what they use? I don't buy into that ideology because there
are plenty of examples of it failing. Not only that, but doesn't serve
everyone equally. And, if it wasn't already apparent, it hurts the poor. They
wouldn't have access to the same content if they had to pay as they go.

