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The thing you and the other person are missing is that some products are "table stakes", you have to have them just to play the game, they're loss-leaders, indirectly they affect other business lines, but they are not profit drivers.

Could you ship a mobile smartphone today without having, minimally, photo backup, cloud backup services, mapping? No. Are these expected to be growth earnings divisions for the company? No, they may even be expected to lose money. Apple Maps is a pure cost for Apple, and iPhones would have sold whether or not Apple had to use third parties.

The Chrome browser doesn't place ads. It doesn't cost anything to use. However, by ensuring that the web is used by more and more people (by helping to make browsing better), and that Google search is used (and not blocked, by say, Internet Explorer owning the market), the Chrome division at Google indirectly makes money for the company by being a defensive moat, but make no mistake they are a cost that makes no revenue or profit.

Having services that deal with SMS, chat, and email are just the price of entry these days for a computing platform. If you're lucky, you break even on them.

Neither Google nor Apple are in the profit maximizing business. If they wanted to maximize profits, they're a lot more they could be doing. Google could shutdown way way more services than the small spring cleanings they do. The company could cut a ton of its profligate R&D spending and stop hiring at the rapid pace it is, as the company's costs are rising far faster. Google could probably lay off 30% of staff and its services would not be affected, much of the money makers are automated.

These tech companies are not being run like General Motors or Walmart, pushing for ruthless efficiency and profit. They are interested in "big" wins, big upsides, not tiny business lines here and there. Take for example, Google Calendar, you think this is raking in billions in ad revenue or Google Apps revenue? Why do we have it then, since micro-econ 101 would tell you to kill it.

I also work on GWT. Google had a team of 25 people working on that project at one point. It's open source. It makes no money. It never will make any money. And it wasn't even used by Google internally during its first few years. Google has a large team of people working on Angular. They won't make any money on this. Angular is used by many more people in the external community than by consumer-facing products (which use Closure Compiler). Those are real costs, lots of money, on things which benefit the external community and Google Brand more than they benefit quarterly revenues.

The simplistic model to which you think these companies are run, always with an eye on monetizing everything directly, is simply wrong.




Chrome is a huge source of revenue since every download is a default search set for google, without having to strike any deal with a distributor. If Opera, for example, had built a chrome like browser, google would have to pay millions to them in order to beat out competition from bing and yahoo.




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