[HN Gopher] Alphabet First Quarter 2021 Results
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Alphabet First Quarter 2021 Results
Author : hencq
Score : 66 points
Date : 2021-04-27 20:31 UTC (2 hours ago)
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(TXT) w3m dump (abc.xyz)
| gok wrote:
| Over a decade after launch, how is Google Cloud still losing so
| much money?
| pupdogg wrote:
| It could also be by design to lower taxes on overall net gains
| all while providing additional metadata required for hyper
| targeting. Especially from services like Firestore.
| s3r3nity wrote:
| Not sure why you're getting downvoted - it's a reasonable
| question to ask for a (supposedly) serious competitor to AWS &
| Azure.
|
| E.g. if I'm leading engineering for a startup and thinking
| about which of the three to invest in, the long-term
| profitability and stability of my choice here is important. You
| can't just rely on the "Google" name - if anything, that
| signals that they're willing to just shut it down or raise
| prices if they can't reach profitability targets soon.
| bilal4hmed wrote:
| Azure raises prices all the time esp their licensing fees.
| I'm sure so does azure.... So even the bigger providers
| increase prices to meet targets . Are you expecting static
| prices
| minsc__and__boo wrote:
| Google Cloud as it exists today was formed under Diane Greene
| (VMware) only a few years ago.
|
| The Google Cloud Platform product (or, "Let's sell some of that
| extra YouTube server space") is a decade old.
| enos_feedler wrote:
| Because it is designed to lose money. The ROI window for
| digital transformation for cloud computing is pretty big. If
| you want to be top 3 in the industry (AWS, Azure, GCP) you've
| gotta spend, spend, spend. There are infinite things and
| features you can supply to customers. Have you seen those cloud
| consoles?
| s3r3nity wrote:
| >Because it is designed to lose money.
|
| Not sure I understand this response, nor do I agree. AWS
| drove $13.5B in _profit_ for Amazon in 2020, and has been
| profitable since at least 2014, _8 years_ after its
| founding.[1]
|
| Why isn't reasonable to ask "where and when is the profit
| coming?"
|
| [1] https://www.geekwire.com/2021/amazon-web-services-posts-
| reco...
| enos_feedler wrote:
| It is reasonable to ask, I am just giving a possible
| answer.
| crazygringo wrote:
| AWS had a helluva head start.
|
| Not only did GCP (and Azure, etc.) have to catch up with
| where AWS was 8 years ago, they've got to invest even
| _more_ to catch up with where AWS is now.
|
| It's obvious that GCP is a very long-term investment, but
| also one that it not just purely profit-driven for GCP in
| isolation, but also hugely strategic for Google as a whole.
| joshuamorton wrote:
| > Not sure I understand this response, nor do I agree. AWS
| drove $13.5B in _profit_ for Amazon in 2020, and has been
| profitable since at least 2014, _8 years_ after its
| founding.[1]
|
| Here's the question to ask: if Google stopped investing
| aggressively in marketing and building new offerings to
| expand the Cloud userbase could it be profitable today?
|
| Or in other words, is it better to have 30% YoY growth and
| on paper profitability, or 45% YoY growth and an on paper
| loss, with the ability to flip the switch and move to the
| first option whenever you want?
| yellowyacht wrote:
| Is that really the case here? Is Google's marketing
| holding them back from profitability? Is GCP spending
| more on marketing than building useful products &
| expanding their infrastructure?
| enos_feedler wrote:
| If they stopped spending on product and infrastructure
| build out, they could maybe be profitable at an
| instantaneous point in time. The issue is that Azure and
| AWS will continue developing and that will drive the
| market. Google share will erode and they will not be
| profitable again.
| subsubzero wrote:
| Its pretty obvious, serving the customer is not in googles
| DNA, it never has and never will be. This is core to why
| all their consumer products have fallen flat on their face.
| Think google glasses, google delivery, etc
|
| Given that I expect to never see waymo brand cars shuttling
| people around, most likely they will license out the tech
| to companies who deal with customers or to the car
| companies themselves.
| whimsicalism wrote:
| ? It's core customers - businesses who are looking to
| advertise - are very well served by Google.
| nick0garvey wrote:
| They want market share more than anything. The intention is to
| trade short-term profits for long-term customers. This is a
| reasonable business strategy, especially for a business with a
| relatively undiversified source of profits.
|
| Of course the short-term profits being lost don't seem so
| short-term at this point, so Google is surely debating
| internally on how long they want to continue this strategy if
| it doesn't begin to pay off.
| dodobirdlord wrote:
| > so Google is surely debating internally on how long they
| want to continue this strategy if it doesn't begin to pay off
|
| I am certain that nobody is considering shuttering a business
| unit that has an annualized revenue of $16 billion and is
| growing 46% per year. Anyone who is "surely debating" this
| would be fired from management at any sensible company.
| ocdtrekkie wrote:
| It is worth noting that Google has shuttered dozens of
| products will multiple millions of users that nearly any
| other sensible company would not shutter, and which,
| outside of Google, would be considered wild successes. (So
| few are spun off as separate companies because Google's
| internal architecture is basically incompatible with anyone
| else operating their products.)
|
| Google isn't interested in being a minority player in any
| market, if they can't capture it, they will eventually
| leave it.
| dmoy wrote:
| Have they shuttered any with >$10b of revenue and >40%
| growth?
| cromwellian wrote:
| Users != Customers as you well know. If a startup outside
| of Google had millions of users, they wouldn't be
| considered a wild success unless they could monetize
| those users, otherwise it's just an enormous cost that
| eventually leads to failures once they run out of VC
| runway.
|
| And let's be real, a huge swath of VC funded startups
| recklessly engage in "growth hacking" to acquire users,
| without a legitimate business plan, usually, e.g.
|
| Step 1: get users Step 2: <magic happens> Step 3: Profit!
|
| And then it turns out their ideas for monetization don't
| work, and they get an exit via acquisition by one of the
| big players as the VCs try to get some of their money
| back and leave someone else holding the bag.
|
| SV is littered with companies that had millions of users
| but ended up folding and selling, because ultimately,
| running a business isn't free, and those users have to
| generate enough revenue to cover costs plus ROI.
| enos_feedler wrote:
| The toothpaste is out of the tube on this one. Outside of the
| current path, I think the only option is spinning off GCP
| into a separate company. I don't think this is a bad idea
| either.
| drcode wrote:
| I'm with you on the AI. If AGI is possible in the next
| decade, I'd argue Google has at least a 30% chance of being
| the company to pull it off.
| paxys wrote:
| AWS is the only cloud hosting company making any real money
| today. Azure technically does, but only through very creative
| reporting. Anyone who is not AWS has to spend an inordinate
| amount of money in credits and other customer acquisition costs
| simply to stay competitive in the space.
| aabhay wrote:
| Google basically hands out 100k in credits to any startup. It's
| spending insane amounts of money to gain market share. But
| since all three clouds are doing it, the net effect is really
| just that software companies are getting subsidized.
| Meegul wrote:
| AWS does this too, also to the tune of 100k iirc. You just
| need to show that you are funded by a known VC, and then each
| subsequent funding round gets you additional credits.
| missedthecue wrote:
| worth noting that google doesn't give out 100k for free, or
| to "any startup". They give it in exchange for equity, and
| only through their VC partners and accelerators.
| colinmhayes wrote:
| A billion of the profit increase is from expected depreciation
| adjustment, but growing profit by 2.5x in one year if bonkers.
| Search made $7 billion more this year and as far as I can tell is
| effectively exactly the same as it was last year.
| paxys wrote:
| It's becoming more and more obvious just how devastating the
| pandemic was to "traditional" industries already on the
| decline, while big tech corps largely reaped all the
| advantages.
| jeffbee wrote:
| Kinda hate to see those share buybacks. You'd think with an
| organization that large they could think of something useful to
| do with fifty billion dollars.
| alberth wrote:
| Wow, they are generating _~$1.5M /employee_ ($220B annualized /
| 140k employees).
|
| Their efficiency at that kind of scale is insane.
| ocdtrekkie wrote:
| Does this figure include their army of underpaid slave labor
| routed through shell companies as contractors?
|
| Profit efficiency isn't a net good, particularly when it
| involves an underclass of employees given substandard treatment
| who have to jump through hoops like being fired and rehired on
| a regular schedule to avoid admitting they're employees and
| giving them healthcare.
| sidibe wrote:
| > slave labor
|
| This is quite ridiculous.
|
| I don't know about all the types of contractors they hire but
| they've sure been great to the ones that work in their cafes
| by paying them for the past year despite the campuses being
| closed.
| [deleted]
| samfisher83 wrote:
| Oil companies have even higher revenue per employees.
| yao420 wrote:
| Yes and much like tech companies outsource their entire
| campus staff to contractors, oil companies operate a web of
| companies that a handle all the hard heavy field work.
|
| A firm like NRG only has 5000 official full time employees
| but have tens of thousands of oilfield workers, also protects
| them from legal liability.
| acchow wrote:
| What do you think is the ratio of Google non-employee
| campus staff to Google employees?
| [deleted]
| subsubzero wrote:
| No need to think what it is, we know what it is,
| permanent contractors make up over half its workforce
| according to leaked documents:
|
| see -https://www.fastcompany.com/90355826/leaked-doc-
| google-has-1...
| [deleted]
| oh_sigh wrote:
| Realistically 10k ads employees are earning $30M each and the
| other 130k employees are losing $600k each.
| summerlight wrote:
| I know you're just being satirical, but this kinds of
| arguments are brought up quite frequently even in serious
| debates. But the reality is that: 1. Ads
| depends on its cloud and core infrastructures to run its
| system. 2. Majority of its revenue directly comes from
| owned and operated properties, such as Search and YouTube
| Ads. 3. Chrome and Android have been key strategical
| components for being independent from other platforms. Google
| Ads won't be profitable as is if other OS/browser had 100%
| market dominance.
|
| If you includes all of them, I think it's more of 6~70k
| employees rather than 10k.
| seaman1921 wrote:
| it must be great working with you
| VikingCoder wrote:
| Lol, great explanation.
|
| Maybe they should just get rid of organic results in Search,
| and just show Ads. Surely that would be more profitable.
| ocdtrekkie wrote:
| With the top four or five results on Google generally being
| ads, they have essentially already done this.
| rawtxapp wrote:
| It really depends on your queries, usually only high
| commercial intent queries will have these top 4-5 ads.
| pmayrgundter wrote:
| This is the case
| scrollaway wrote:
| aka "you could be making so much more money if you didn't
| spend a bunch of your time sleeping, eating and showering".
| PragmaticPulp wrote:
| Alphabet has a huge number of contractors that aren't counted
| in that number.
|
| Previous leaks suggested that they have more contractors than
| employees: https://www.cnbc.com/2018/07/25/alphabet-google-
| employed-mor...
| [deleted]
| Leary wrote:
| I own Google stocks for the nebulous reason of "AI" for the long
| term (If the AI overlords invent AGI, I don't want to miss out).
| With capital gains taxes, I'm not going to trade in and out of
| every stock every quarter, although it's good to see it go up
| after hours.
| akomtu wrote:
| Sounds like a solid investment strategy.
| [deleted]
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