
Ask HN: How is Covid-19 affecting digital ads revenue at Google/Facebook - kediz
LA times just decides to &quot;decided to furlough a number of employees&quot; because &quot;our advertising revenue has nearly been eliminated&quot;[1]. Just wonder if the same thing is gonna happen at digital ads.
If so, I wonder how long can Google&#x2F;Facebook sustain before starting cutting expenses.<p>Sources:
[1]:https:&#x2F;&#x2F;www.nytimes.com&#x2F;2020&#x2F;04&#x2F;14&#x2F;business&#x2F;los-angeles-times-furloughs-cuts.html
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nostrademons
You can get some idea of worst-case scenarios from their publicly available
financials. Google has $120B in cash [1] and operating expenses of $54B [2].
If they lose _all_ their revenue, they can continue operating for another 2
years. Facebook has $54B in cash [3] and operating expenses of about $33B [4];
they can operate for 1.5 years with no revenue.

Their margins are also pretty good. Facebook has profits of $25B on revenues
of $70B for about 40% margins [4]. Google has profits of $35B on revenues of
$160B for about 20% margins [2]. These are conservative approximations of the
rough percentage drop in revenues that they could sustain and still remain
profitable. (In actuality, "cost of revenue" tends to go down as revenue does,
so both of them could sustain a roughly 50% drop in revenue while remaining
profitable.) Note that runway and burn rate have a reciprocal relationship: if
these companies sustained the 50% revenue drop mentioned above, they'd still
have infinite runway, while if they sustained a 75% drop, they'd have a ~5
year runway.

[1] [https://finance.yahoo.com/quote/GOOG/balance-
sheet?p=GOOG](https://finance.yahoo.com/quote/GOOG/balance-sheet?p=GOOG)

[2]
[https://finance.yahoo.com/quote/GOOG/financials?p=GOOG](https://finance.yahoo.com/quote/GOOG/financials?p=GOOG)

[3] [https://finance.yahoo.com/quote/FB/balance-
sheet?p=FB](https://finance.yahoo.com/quote/FB/balance-sheet?p=FB)

[4]
[https://finance.yahoo.com/quote/FB/financials?p=FB](https://finance.yahoo.com/quote/FB/financials?p=FB)

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Mike_Andreuzza
A lot,for me now is almost 0, I made 0.89 cents in 2 weeks on
[https://www.colorsandfonts.com](https://www.colorsandfonts.com) with doigital
ads

I am using codefund...

~~~
jdorfman
Hey Mike. Inventory is lower than usual but we do have a new sales guy who is
starting to bring on new advertisers. We are doing everything in our power to
rebound during this pandemic. Email me or ask me here if you have any other
questions. Justin at codefund dot io

~~~
Mike_Andreuzza
Hey Justin! Nice to hear that... I am actually thinking on removing ads
completely by now until it gets better.

Is nothing personal, I just think is not fair, the companies displayed get
awareness but I get nothing back and the user experience gets touched. I am
working on the redesign relaxed-dijkstra-1e8c58.netlify.com I will see what I
do.

I appreciate you reaching out.

Thank you Justin.

/Mike

~~~
jdorfman
Hey Mike, all good! You do what's best for your users. The new design looks
great! Keep in touch.

~~~
Mike_Andreuzza
If I go back to ads, believe it won't be another one than Codefund. Love the
concept, implement and the fact they are ethical.

Thank you.

We do keep in touch, have a great day justin.

