
Divesting AdSense might help Google stave off worse regulatory action - pseudolus
https://www.bloomberg.com/opinion/articles/2020-02-05/why-google-might-prefer-dropping-a-22-billion-business
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bgdam
I fail to see how divesting Adsense would work. It's either going to kill off
Adsense completely since it would no longer have access to pervasive Google
tracking information, or if there's a deal to keep sharing that information,
it would still open Google to anti-trust litigation.

~~~
tonyedgecombe
The problem is losing customers, I'm guessing that most people buying Adsense
ads are also buying Adwords ads. Carve off the Adsense side and it would just
collapse.

~~~
AJ007
The advertiser base for Adsense is people buying search Ads. Some percentage
of the advertisers just left defaults on and don’t know they are buying
Adsense Ads (now conveniently called Google Ads.)

I could see how this idea would come from someone inside Google. Product
doesn’t make them much money and they can claim they made a major change to
their business. Because of YouTube, Google has more display inventory to sell
now than they can handle. Ironically, the YouTube display inventory is
incredibly poor quality, relative to the better Adsense properties out there.

An actual divestment would have to be Google splitting their search engine off
from all of their other businesses. Keeping ad sales bundled with Google
Search would be reasonable because there wouldn’t be any internal products to
promote.

~~~
AJ007
I would also add, breaking the display advertising marketplace would be
extremely problematic for third party publishers, and likely guarantee the
lock in to Google News, Facebook News, and Apple News for all news sites.
Dumping Adsense is very self serving, and could actually amplify Google’s
anti-trust issues.

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jstepka
There is not a problem.

There are several companies competing for ad dollars and using various
platforms (search, Instagram, etc) to feed ad systems for revenue. Their
systems are extremely targeted and I like the optimized ads for new brands
that are finding me.

Additionally, Chinese companies are doing the same and will combine even
greater amounts of data — size is extremely valuable in an economic war of
east vs west. I choose us.

~~~
dna_polymerase
What does China have to do with any of this?

~~~
sct202
A Chinese company owns Media.net which is one of the largest AdSense
competitors.

~~~
MereInterest
Even so, it comes across as a jingoistic diversion in order to paint users and
advertisers as being on the same side. "It would be a shame if there were one
fewer group stalking you everywhere you go, because then the right people
wouldn't be stalking you."

~~~
sjg007
I think the risk is that your targeting information is in the hands of a
company that can be mined by the Chinese government to perhaps even identify
you. It's also aggregate market/economic information. Should this data be
protected or otherwise restricted? Should it be export controlled or not? You
can imagine that the "data wars" are coming ... whether that's healthy
competition or something else I don't think we know yet or have policy around.
I think the EU is further ahead in this space with policies around data
privacy for example.

The US could operate similarly but we usually expect a warrant for such access
but I think there is a big push in the US govt to expand access as well.

~~~
La1n
>The US could operate similarly but we usually expect a warrant for such
access but I think there is a big push in the US govt to expand access as
well.

With PRISM starting data collection from Google more than 10 years ago I think
expecting a warrant for this very valuable data is generous.

~~~
sjg007
For sure parallel construction is a looming issue that we as a society and the
courts need to figure out.

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zozbot234
They could carve out AdSense and rename it Doubleclick.net. Going back to the
pre-2008 GOOGL would be quite nice, even if they had to charge for services
like Search.

~~~
jefftk
The DoubleClick side of the business still exists: it's called Google
AdManager. Very roughly, AdSense is "hey Google, please put ads on my page and
make me money" while AdManager is "I'm a big publisher and make deals directly
with advertisers for most of the ads I show". AdSense was built internally,
DoubleClick was an acquisition.

(Disclosure: I work on ads at Google, speaking only for myself)

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neonate
[https://archive.md/qCH1z](https://archive.md/qCH1z)

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samnwa
Considering that Adsense is 90% of revenue this makes no sense

~~~
wan23
Most of Google's revenue comes from AdWords, which is the ads on google.com
and from other ads on Google's own properties. AdSense is the ads that you can
put on your own web site, powered by Google's advertising technologies. While
it's a huge business in its own right, AdSense could definitely be spun off.

~~~
protanopia
I'm trying to find information on what sections of Google/Alphabet make what
revenue. How do you know that AdWords in the majority of their advertising
revenue?

~~~
junar
[https://abc.xyz/investor/static/pdf/20200204_alphabet_10K.pd...](https://abc.xyz/investor/static/pdf/20200204_alphabet_10K.pdf#page=61)

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simula67
Non-clickbait title: Google might prefer divesting $22B AdSense business to
avoid antitrust litigation.

~~~
echelon
That's hardly a deep enough cut. Take away Android, or better, Search. Either
of those business units can survive on their own. It makes Google far less of
a monopoly and breaks up the pervasive spying (at least insofar as it isn't
one company tracking everything).

~~~
izacus
Android (the OS part, the one you want opensourced) is pretty much not making
any revenue (which is easy to see on the earnings report).

So what you're basically saying is that government should decree to destroy
Android as a product and let Apple take over the whole marked with its
completely proprietary and DRM locked OS (which is also not earning any money
by itself without the rest of Apple corporation to feed it).

~~~
kryptiskt
A spun off Android Inc would be free to make lucrative deals for browsers,
search, media and maps and stuff and would have the Play store too. It would
do just fine.

~~~
jdhdjsujwg
Then why didn't that happen naturally? People calling google a monopoly don't
see that the future if innovation is megacorps and small businesses that try
to ascend to selling out. This world where a business sticks to one problem
domain is just a fantasy, it's the software version of a mom+pop. In the world
of grownup companies it's Amazon vs. Apple vs. Google vs Walmart vs. Tencent
vs. Facebook and maybe eventually the Europeans will decide they miss having
clout as more than consumers on the world stage and then there'll be a
European megacorp too.

~~~
tsimionescu
That is exactly what people calling Google a monopoly see, and that is what
they want to prevent.

As a rule, Big corporations do not innovate - they form cartels and sit on
their products extracting rent. We have already seen the severe drop in
innovation in the mobile space, now that the market is settled.

~~~
Mirioron
> _That is exactly what people calling Google a monopoly see, and that is what
> they want to prevent._

I guess we will soon just use Chinese-made software too then.

~~~
humanrebar
Just like we're all exclusively eating Chinese chocolate, drinking Chinese
beer, driving Chinese assembled cars, and watching Chinese movies?

~~~
to11mtm
> Just like we're all exclusively eating Chinese chocolate,

\- Not chocolate, but I was amazed when I saw a bag of dried apples came from
China.

> drinking Chinese beer,

\- I'd be more worried about it skunking...

> driving Chinese assembled cars,

This actually reminds me, I forgot to see how that spat where GM didn't want
to have to pay taxes on Chinese assembled cars they sell in the US wound up
finishing.

> and watching Chinese movies?

Someone made a rather convincing argument that the influence of Chinese
financiers in the film industry has contributed to shifts in the movies we
get.

Now, there are those who may say 'But were any of those Megacorps?' The Apples
were Dole, the cars were GM, and the movies (in question in the argument made)
were Disney.

My counterpoint to that is that one has to consider that China in this case is
the megacorp, due to the level of involvement/oversight they have over the
companies that operate in their country.

------
9q9
Alternative /additional explanation: Google realise that their business model
of selling ads based on 'spying' on users privacy will eventually come to an
end because:

\- users being increasingly aware of the problem,

\- legislation like GDPR everywhere on the horizon,

\- Other companies (e.g. Apple) competing on providing better privacy.

So Google is trying to transition to services with defined income (Cloud, game
streaming, Youtube) while it's still easy.

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blinotz
What _won’t_ google shut down?

Maybe instead of dragging out a seemingly endless series of customer trust
sapping product shutdowns it should just decide what it’s keeping them split
the company into what it’s keeping and what it’s killing.

Here’s my prediction of what will finally be left standing:

Search

Search advertising

Maps

Gmail

50% chance they’ll keep their cloud 50% chance it’s already living dead like
rackspace.

Everything else will go.

It’s starting to feel like google is in trouble.

~~~
myle
Thanks for your undocumented opinion that Google should kill products like
Android, Cloud, YouTube, Chrome and many many others.

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blinotz
You’re right they’ll likely keep android, chrome and YouTube.

I think they’ll give up on the cloud. Google has already given a succeed or
close deadline on this.

What are the “many many others” you refer to? I suspect those are the ones
google will kill.

~~~
shadowgovt
Google's doubling down on Cloud precisely because they want an additional
revenue stream as big as ads; they know their income model is extremely
monocultural and any number of things (either regulation or a titanic shift in
the ad market, such as mass-adoption of ad-blockers) could hamstring the
growth models they're accustom to.

I wouldn't predict they'll shutdown cloud until and unless they're convinced
it won't blow up like they hope for them.

