How do you play with inflation numbers around the world? 7% YoY does not seem an increase. US official inflation rate is 8% and inflation is calculated based on a basket that is different from inflation based on specific industries.
Looks like the money machine is still printing! Anyone done deep analysis on how their "other bets" have been performing over time? It feels like a few things have been cut (e.g. Loon) but I haven't been following closely enough to have a good understanding of the full picture
Ditto. But I do wonder how much ad time is just people using it to listen to music in the background and not really listening to ads (maybe this is priced in anyways and it doesn't matter, but traveling around eastern europe a lot I was surprised how many people used Youtube this way)
The advertising people know that they can slip information and impressions into your brain whether you think you're listening/reading/clicking or not.
All they really need to do is tick a few % of the marginal decision-makers who need to (for example) buy a car to say "I should consider a Ford" and they've covered the ad budget.
This is why "impression" metrics are not very useful. Perhaps 99% of impressions are just wasted so advertisers prefer to pay for clicks, or even conversions.
In the UK YT Premium is £11.99, Netflix Standard (no ads) is £10.99
For comparison my 5G phone plan is £10/month, and my home fibre connection ADSL is £22/month.
YouTube premium is therefore a tough sell - with netflix you at least get loads of stuff you wouldn't have seen otherwise, YT you get the same stuff you could see anyway, just without ads.
I personally don't see that as a good deal. If it was like £2 or £3 a month to remove the ads, then great sign me up. But it's not.
Don’t worry, I offset you some by installing adblockers on many older people’s phones and computers, especially people who aren’t technical and had no idea how to do it themselves.
I’m genuinely curious to know: why do some folks browse the web without using an ad blocker? That’s not a rhetorical question. I understand grandma may not be technically savvy enough. But for anyone reading HN, why aren’t you using an ad blocker?
There are some people who see it as an ethical position: ad supported businesses need to serve ads to survive. If you don't want to see those ads, and the business doesn't offer a subscription plan, just don't go to those websites.
Ad blockers currently work on Android devices[1][2][3][4], preferably by gaining root on the device and using a de-Googled Android, using F-Droid[1] and/or manually installing packages with FFUpdater[1].
If you really have to use Apple devices and other post-general-purpose-computing locked down devices (e.g. televisions), you could try self-hosting privaxy[5][6] (or similar) which performs MITM manipulation of web traffic to remove ads, including via JS or CSS injection.
GCP is an interesting one -- I helped a company go through some of the hoops for GCP and AWS and the former was... difficult. It felt like someone tried to copy AWS, didn't fix all the links or think the whole thing through, and just sort of put it out there. I remember we were locked out of our account for like a month for some reason and there was a lot of handoff between different reps, for churn or for some business process reason I wasn't aware of, but it was a pretty jarring experience that made us not want to invest a lot of time there
This is very interesting. My experience at a large company migrating to GCP. The consultants and reps were 10x more eager to help us compared to AWS, and the migration went fairly smooth for most parts
Which aligns with the primary difference between Google and Amazon, customer service. Amazon is as good at service as Google is bad. If my memory serves me correct, Google had outsourced at least some of the GCP customer service to HP.
Customer service isn't wildly different between GCP and AWS. I think it's the finish of the product. AWS has far more finished product and even for smaller services it mostly works as intended. While GCP it is very hit or miss. I have seen so many edge cases in smaller GCP services like composer, old ML platform, dataflow etc.
While GCP is definitely more intuitive. You don't need to create 2 different IAM profile for anything you want to solve. So GCP feels more like Digital Ocean + bunch of services with varying quality.
GCP has a smaller number of services but they tend to be very well designed with excellent taste.
AWS has a bazillion services, often very obviously designed by people without good taste and/or experience.
GCP's incompleteness is super annoying. The general daftness of AWS service design is tiring and somewhat soul-sucking.
I used to think that Google would eventually get there, but lately I've realized that they are totally happy offering an 80% product forever. So for now I'm very reluctantly team AWS.
> GCP has a smaller number of services but they tend to be very well designed with excellent taste.
I would have said the same before using GCP. At first everything goes super smoothly and the experience is definitely better than AWS. Then you start seeing undocumented behaviour again and again. In comparison, it is much rarer to get any undocumented behavior in AWS.
Fully agree with this. I have used GKE at scale as an example. It starts to break down significantly once your cluster reaches a couple hundred nodes. Only way to solve it is to have support resize your controller nodes manually. And as support for anything google is horrible, that task takes multiple hours.
It’s growing because they are slaughtering golden geese at an alarming rate propping up growth
- Youtube ads assault
- Endless scrolling on SERP to show more ads as you need to scroll through degrading results.
- etc
every surface has increased ad load, every service increased prices. So of course that props up growth.
Ads is in full value extraction mode now, the question is, how sustainable it is, but that’s a question for another quarter
See Facebook the same. You can’t share actual links outside the app anymore which drives engagement as every user clicking on a link now goes back right to being a monthly active
> In January 2023, we completed an assessment of the useful lives of our servers and network equipment and
adjusted the estimated useful life of our servers from four years to six years and the estimated useful life of certain
network equipment from five years to six years. This change in accounting estimate was effective beginning in fiscal
year 2023, and the effect was a reduction in depreciation expense of $966 million and $2.0 billion and an increase
in net income of $752 million and $1.5 billion
The controls are that if 4 years from now they decide that the servers need replacing after all and take a write-down then shareholders have a very solid case to sue the company.
But if it's the stock holders that are suing the company, and they are receiving compensation from the lawsuit based on the size of their holdings, it's a cash payment from the company to the holders, which is exactly what a dividend is.
Not all stock holders will be part of the lawsuit, and some non stock holders (say people who have already sold) can be part of the lawsuit. There can also be people who claim second and third degree damages without actually holding any stock. And there is no rule that compensation has to be in proportion to anyone's holdings. All of this will be up to the court to decide.
That's very unlikely. In each case the change would be backed by an analysis which justified the change, nefarious intent would be pretty difficult to prove.
Is that $2.0b for network equipment by increasing it's depreciation period by 20%? Meanwhile increasing the deprecation period of servers by 50% only nets $1.0b?
I had the impression that servers were vastly more expensive than network equipment. I wonder what the breakdown is for network equipment.
They also took a large one off hit from the layoffs over the last 6 months. I think the layoff hit was less than the gain on the equipment recategorization but it does sort of even out a bit.
It is not an accounting trick, it means they'll actually hold on to those servers longer than originally planned, meaning they'll buy fewer servers to replace them over the long term. That's actual savings.
The accounting "magic" is that they can claim the savings today, but that's just normal amortization.
And this will increase their server failure rate, but probably not enough to move the needle in terms of the random failure buffers they account for.
The server demand doesn't depend on how many servers you have. If your demand is D, you have X servers, and you need to decommission Y due to age, you'll have to buy D - X + Y. If Y gets smaller, you buy fewer.
You build brand new data centres with the latest technology. When a new technology rolls out, new builds always get it, and you start upgrading your newest data centre first. Sometimes you never make it to your oldest data centre.
Data centres fill up. They fill up with important "production" software and associated data housed in the same DC for locality, which never moves and mustn't be shut down. After a while the data centre is full and everyone needs to put their new software in the newly built empty data centre.
Over time a data centre gets technology upgrades later or not at all (say, a new-new networking fabric is invented and starts rolling out before the new networking fabric finishes rolling out). There's a slow decay in terms of service. New data centres have on-site offices of engineers who keep everything running at maximum efficiency, older data centres have a single security guard who receives a daily printout of which machines to press the reset button on while doing their rounds. Eventually an old data centre is turned off all at once.
If they're keeping older servers around longer, they may be delaying turning off the least valuable computers, continuing planning upgrades to 'new' even after 'new-new' is ready and rolling out, or slowing down the invention of new tech. As I understand it, "decommission X many machines due to age" isn't really the model.
Until a few years ago each CPU generation brought so much performance improvement that you would actually save money by replacing the server, because it would cut down your operational expenses (power, rack space, cooling, ...) per unit of compute. This is not so true anymore.
If you run a lot of Windows servers, it’s sometimes cheaper to run old stuff longer as they are raising prices on a per core basis.
I was stuck supporting one of these environments, and made a business case to overbuy the hardware a few years ago when they did a “free” socket to core migration. They’re still running those things, as the maintenance on the servers is less than paying for more cores.
It's been about 6 months since the Google CEO blogged about how they needed to lay of 12,000 people to brace for the "difficult economic cycle". Meanwhile revenue is up 7% YoY.
They hired more really good people to leave fewer really good candidates to the competition. Maybe it made sense. They could not publicly declare this though.
Maybe they hired more than they needed because of the shifting macro environment? The number of employees you need depends on what you want to accomplish which depends on interest rates, consumer spending, and tons of other macro factors.
They always hired more than needed, even now. I think it's a common knowledge. Most of the time it worked out because google's stock always grew, but yeah if conditions become bad they wouldn't need to think a lot before laying of 20-30% of the workforce.
I am friends of a long time, Fortune 50 CFO. Well, he was about 16 years ago before one large company went public and he made about $40M in a single day and decided he wanted to do something new (can't blame him).
He told me repeatedly that companies that lay off the moment a bad quarter appears - or if they lay off employees if they even think the market will slow down - are always terribly run companies.
He said it was a clear indicator of poor internal planning and forecasting, that any company who suddenly needed to shed 5,000 or 10,000 employees on one bad quarter was was one to avoid.
This can be true and we can also recognize that the pandemic probably made everyone’s internal forecasts bad. These tech companies have some smart people working there, I would bet their projections are pretty world class.
The comcast is bad meme is interesting but what specifics do you have that it is worse at business than Google?
I am no fan of comcast and pay a premium to avoid them since I disagree with bandwidth quotas. But both Google and Comcast have bad customer service and some terrible products yet both have respective and respectable monopolies. YouTube is terrible and amazing at the same time and more teens watch it than cable tv. Yet there is awful content and no good way to screen it from children besides denying access entirely.
Google also arguably missed ChatGPT and TikTok as macro product trends. Previously, Google failed to capitalize on social networking.
I am not sure how you forecast or predict those things in any way that guarantees success. And even when you see the future to pursue and build that core competency. I don't think large companies can move fast enough because by the time you notice the competition they've already established a network effect.
And network effects seem to be the main moat. It remains to be seen if Threads really kills Twitter. It's not even clear that Musk can kill it unintentionally, i.e. the business succeeds despite its management.
No, it isn't. Details matter, and if they hiring even 1% too many people, then what else are they getting wrong by 1%? And how many of those things?
The key is that they wouldn't know either. It could be a slow 'death by a thousand cuts' and they wouldn't even know they were bleeding.
This is why companies, even massive companies, generally die eventually. There are very few that last even 50 years without eventually being acquired or bankrupt. And how does it start? Little mistakes, lack of focus, everywhere.
I mean, everyone knows that PPC is 95% of Google's revenue business. They could probably eject 80% of the company and the revenue trajectory would not change.
All of Twitter's staff were supporting the core product. How many Google employees support no part of the Google Ads stack or a product with Google Ads revenue?
Employee count actually increased accounting for layoffs, so that's not it for sure. Looks like they did need or at least thought they needed that many.
I just added this comment on another reply further down below, copy-pasting here, the numbers compare last year Q2 to this year Q2, if you compare it to last quarter they are actually down in count.
-------------------------------
I thought this was interesting, so I compared it against their count last quarter (instead of last year) and they are indeed down.
- In Q4 2022 [1] they had 190,234 employees.
- In Q1 2023 [2] they had 190,711 employees.
- This quarter Q2, they have 181,798 employees.
So they are down almost 9000 employees from last quarter, close to their 12K layoff number.
Yeah, but seeing the sharpness - compared to "ok let's slow down... ok ... shoot, we probably actually need to trim some headcount" - really highlights the follow-the-herd, here's-a-handy-excuse, done-for-PR nature of them vs actually responding to revenue trends or such.
Average global inflation was 8.7% last year, and in the US it peaked at 9.1% in June 2022. The calculation is obviously a lot more complex considering all the different jurisdictions Google makes revenue from and all the different kinds of measures, but adding it all up it won't be too far from the 7% number.
the inflation rate at June 2022 is not what you should use to normalize the growth of a company, YoY, at June 2023. You're off by a year. The US YoY inflation rate for this period was around 3% going off memory.
Idk what you define as "average" global inflation. I don't really agree that it's the correct term for what is largely an american company even if it does international business.
Inflation doesn't jump from 9% to 3% overnight but goes down day-by-day. It is only at 3% now, so it spent the majority of the last year at >6%. And Google makes 55% of its revenue from outside the US, so it makes sense to consider global inflation in the calculation not just US.
3% is the average rate over the past 12 months. "it spent the majority of last year at > 6%" is not a helpful metric because those past numbers are average of months prior to June 2022.
We are tracking growth from June 2022->June 2023. So what we care about is the inflation from June 2022->June 2023. Which is 3%.
True, but the word "currency" pops up 53 times in this report [1], mostly in regards to managing "foreign exchange risk", so they seem to be taking deliberate measures to stay on the inflation trajectory of the dollar.
Weren't most of the layoffs in big tech done to shed positions related to recruiting or kill off floundering projects in R&D? If so, revenue is the wrong number to be looking at.
...
A work of future history and speculative evolution, Time Machine is interpreted in modern times as a commentary on the increasing inequality and class divisions of Wells' era, which he projects as giving rise to two separate human species: the fair, childlike Eloi, and the savage, simian Morlocks, distant descendants of the contemporary upper and lower classes respectively
...
...
Deducing that the Morlocks have taken his time machine, he explores their tunnels, learning that due to a lack of any other means of sustenance, they feed on the Eloi. The Traveller theorizes that intelligence is the result of and response to danger; with no real challenges facing the Eloi, they have lost the spirit, intelligence, and physical fitness of humanity at its peak.
...
I ran some google ads lately and they were very ineffective. I feel like my money was going down the drain. Perhaps that's what s driving their higher revenue?
Advertisers don’t buy ads unless they have measurable ROI. It doesn’t matter if it’s 1000 impressions for $1 for 1 conversion, or 10 video views for $1 for 1 conversion, or a million impressions for $1 for 1 conversion. It’s just money spent vs money gained.
Marketers should spend every extra dollar on the ad platform with the lowest customer acquisition cost, so if Google ads are more ineffective compared to others, then its customer will go somewhere else and hence it will have less revenue.
During the social media ad pause of the 2020, we had multiple companies admit in earnings calls and elsewhere that pausing advertisement had no impact on their sales at all.
The extreme end of that spectrum is Tesla with no advertising whatsoever.
This kind of observation makes me pause and cause some reflection on ads in general.
> Google Services includes products and services such as ads, Android, Chrome, hardware, Google Maps,
Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising; sales
of apps and in-app purchases, and hardware; and fees received for subscription-based products such as
YouTube Premium and YouTube TV.
Interesting how they bundle chrome, android, and pixel with various web services such as search, yt, maps
Kind of odd considering pixel is a completely different kind of product. It does make sense because there's likely synergy between first group and second group, but also it makes me wonder how they calculate the profitability of a product like pixel
Also it makes me wonder whether the recent proposal of the chrome integrity API will positively or negatively effect these numbers long term given sufficient backlash
Interesting news about Ruth Porat transitioning to President and Chief Investment Officer of Alphabet:
> Alphabet and Google CFO Ruth Porat will assume the newly created role of President and Chief Investment Officer of Alphabet and Google, effective September 1, 2023. Ruth will continue to serve as CFO, including leading the company’s 2024 and long-range capital planning processes, while the company searches for and selects her successor.
> In her new role, Ruth will continue to report to Sundar Pichai, Alphabet and Google CEO.
> Ruth assumed the role of CFO in May 2015 and is the company’s longest-serving CFO.
> In her new role, Ruth will be responsible for Alphabet’s investments in its Other Bets portfolio, working closely with Sundar, and the company’s investments in countries and communities around the world. Alphabet’s investments span numerous sectors and are engines of economic growth globally. She will also focus on engagement with policymakers and regulators regarding employment, economic opportunity, competitiveness, and infrastructure expansion.
Does this mean cuts a.k.a. "streamlining" incoming for Other Bets? She has been known to be pretty strict about unnecessary spending at Google.
Maybe but I think Brin and Page are keen to live forever so Verily is their hedge and research playground in that area. It also serves as a translational testing ground for applied AI innovations in the life sciences.
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