[HN Gopher] Alphabet Third Quarter 2021 Results [pdf]
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Alphabet Third Quarter 2021 Results [pdf]
Author : nappy-doo
Score : 101 points
Date : 2021-10-26 20:12 UTC (2 hours ago)
(HTM) web link (abc.xyz)
(TXT) w3m dump (abc.xyz)
| disdi89 wrote:
| I do not understand this financial books and lingo enough to
| understand this correctly so have to ask "Is google cloud
| business gone really down as compared to previous years? Am I
| reading this correctly?"
| Tenobrus wrote:
| You're misunderstanding, the numbers show 4990 million in 2021
| vs 3444 million in 2020.
| disdi89 wrote:
| Thanks for explaining.
| dragonwriter wrote:
| No.
|
| Google Cloud Revenue went _up_ from $3.4 billion for Q3 2020 to
| $4.9 billion for Q3 2021
|
| Google Cloud operating _losses_ went down from $1.1 billion in
| Q3 2020 to $640 million in Q3 2021. (Though it looks like this
| change is almost exactly accounted for by a change in
| depreciation expense due to revised estimate of the useful life
| of servers.)
|
| So they are bringing in significantly more money through the
| front door with Cloud, though they are still losing money
| (either about the same or half as much, depending on how you
| look at it) on Cloud.
| purple_ferret wrote:
| I like to think I'm doing my part as a sharehholder.
|
| Every so often I'll google something like _Criminal Defense
| Attorney_ , _send money_ , or _file taxes_ and click on the
| highest ads.
| echelon wrote:
| That seems like fraud, especially if you were to do it at
| scale.
| netr0ute wrote:
| You won't want to know what AdNauseam does.
| echelon wrote:
| It's one thing to click ads. It's quite another to do it
| for a company you own stock in.
| rige wrote:
| Hmm, I don't understand what would make that fraudulent,
| could you explain? Many users, and presumably many
| shareholders, click on ads that aren't relevant to them,
| or search for things that aren't relevant to their
| interests or purchases -- I would think that's just one
| of the many assumptions built into the advertising
| market.
| echelon wrote:
| > Every so often I'll google something like Criminal
| Defense Attorney, send money, or file taxes and click on
| the highest ads.
|
| The original poster is deliberately searching for some of
| the highest cost per click ads [1]. They have no
| intention of using these services, and they're moving
| lots of money from the ad purchaser to Google. Up to $50
| per click.
|
| This person owns stock in Google and has a vested
| interest in seeing their revenues go up.
|
| These effects are minuscule, but it's not far off from
| stealing a furniture item every time you go to Target.
| Someone is paying for these and it has a nonzero effect
| on Google stock.
|
| [1] https://www.wordstream.com/blog/ws/2017/06/27/most-
| expensive...
| TameAntelope wrote:
| A lot of things we do are a little fraudulent, no? The
| measure is probably impact.
| easton wrote:
| > In January 2021, we completed an assessment of the useful lives
| of our servers and network equipment and adjusted the estimated
| useful life of our servers from three years to four years
|
| Does anyone know what the observation was here that made this
| possible? Have Google's internal workloads not grown in size as
| quickly as they thought, or is this a "Moore's law is slowing
| down" thing?
| green-eclipse wrote:
| This was announced back in July:
|
| https://www.convergedigest.com/2021/07/google-extends-deprec...
| cj wrote:
| I wouldn't be surprised if the decision was driven by Google's
| army of accountants.
|
| Extending the life of an asset would affect the depreciation
| schedule, which would affect when depreciation is recognized /
| recorded on their books in a given tax year.
| slo_news wrote:
| While I'm unsure of the the reason the computers are lasting
| longer, I would bet this observation was originally triggered
| from the public company accounting firm that audits Alphabet's
| financials. The accounting firm likely asked Alphabet to prove
| out why they used a 3 year estimate and found out 4 years was
| more accurate (FYI 3 years is a standard useful life for
| computers for most companies - sometimes even shorter).
| hogFeast wrote:
| It doesn't work this way.
|
| If Alphabet wanted to prove they lasted three years, they
| would have found a way to prove it. Auditors don't go around
| challenging on things like this. In particular, they don't go
| around challenging companies on depreciation because that is
| a key lever that management can pull if they need to hit
| numbers.
|
| It is very difficult to discern exactly why they will have
| done this but the functional answer is: they have done this
| because they needed earnings to increase. In this case, it
| looks like the difference between a 15% and a 20% beat (I
| believe the change was made in January, I think they had
| quite a big beat in that quarter after some flattish
| momentum, middle of the year very strong anyway).
| slownews45 wrote:
| Umm, intel flatlined basically on chip development. Chip
| shortages also hit the sector. And the long tail has gotten
| to point where folks keep systems in workloads even if
| "better" solutions exist - because existing systems are
| working fine. 4 years is not unreasonable (now). Once chip
| shortages ease and development picks up again at intel
| useful life may decrease again.
| kyrra wrote:
| Googler, opinions are my own. I know nothing about this.
|
| I wonder if this was Google's response to the chip shortage?
| Maybe the cost/benefit (and just sheer inability to get certain
| parts) made them hold on to hardware for longer.
| DennisAleynikov wrote:
| That would be an interesting adjustment
| bduerst wrote:
| Could also be the fact that Google has built a ton of new
| data centers in the last two years. Newer hardware, infra,
| utilization, etc. could lead to better quality/lifespans.
| bpodgursky wrote:
| This is probably less exciting than you imagine. It's hard to
| estimate HDD and CPU failure rates 5 years into the future,
| especially on new-generation hardware. 3 years was an informed
| guess.
| sidibe wrote:
| I don't think the workloads would have much to do with this,
| probably saw that they were having less failures than
| anticipated or memory/chip shortages have them keeping
| equipment around longer than they planned.
| ChuckMcM wrote:
| No, computers typically have a service life of 5 years, but
| depreciating them faster gives you more loss to to write down
| against your income.
|
| What you are seeing though is the trick they used to make 'net
| income' pop. Let's say they had a million servers and a server
| costs $5K each. When depreciated at 3 years that is $1.6
| billion dollars a year of depreciation. But you stretch that
| out to 4 years and now its only $1.25 billion dollars in
| appreciation. Since depreciation is subtracted from revenue you
| just "bumped" up your revenue by $350M and you didn't have to
| do anything at all (except change how you treated your assets).
|
| That they had to resort to this level of shenanigan to get
| their revenue numbers up is interesting to me.
| remus wrote:
| Looking at it from a naive point of view, could it just be an
| actual change in what they estimate to be the useful life of
| their servers? Accounting shenanigans for a (relatively)
| small bump in revenue seems not really worthwhile.
| gradys wrote:
| > Since depreciation is subtracted from revenue you just
| "bumped" up your revenue by ...
|
| No, you bumped your net income. Revenue is unaffected by the
| depreciation change. Revenue is up 61%.
|
| Also, nobody would be fooled by an accounting trick like
| this. Analysts routinely compute EBITA, earnings before
| interest, taxes, and depreciation, exactly for this reason -
| filtering out the more purely financial/virtual expenses that
| are less informative for understanding the core business.
|
| They likely did it because you're required to report things
| like depreciation in a way that reflects reality. There could
| be tax implications for instance, since you can count
| depreciation expenses against your taxable earnings (though
| often companies maintain separate depreciation accounting for
| financial reporting vs taxes due to the different rules for
| each).
| ChuckMcM wrote:
| Fair, it bumps net income not revenue.
|
| When I was younger, I took an accounting class from Santa
| Clara University (it was part of their Executive MBA
| program although I did not get an MBA) because I knew that
| I'd like to start my own company some day and needed to
| know how accounting worked.
|
| > Also, nobody would be fooled by an accounting trick like
| this.
|
| The course specifically covered "accounting tricks" that
| would create the most favorable impression in the eyes of
| the public and in the eyes of the analyst community.
| Playing around with depreciation rates was one of them. The
| assertion in class (which I've never had a chance to test)
| was that the IRS rarely, if ever, cared about your
| depreciation tables. That was damn close to 20 years ago so
| it most certainly could be different now, and I am not a
| tax accountant. If it has changed since then I am sure
| someone who has taken the class will correct me.
|
| I don't think it "fools" analysts, but I suspect they might
| trade on an understanding that retail investors might have
| a different take on what was reported than what the
| analysts read.
| jdavis703 wrote:
| My assumption is the hardware was more reliable than expected.
| If it was about slowing workload growth one might expect them
| to switch to a usage-based (instead of time-based) depreciation
| schedule.
| DennisAleynikov wrote:
| Seemingly the latter. Less benefit between generations and more
| stress resistance in hardware compared to earlier data center
| practice
| greenail wrote:
| AFAIK it comes down to some degree to a tradeoff between the
| projected density and power efficiency gains of newer gear vs
| the cost savings of keeping older gear around and in the racks.
| Some datacenters simply can't support higher density due to
| power constraints and if the newer gear isn't offsetting the
| capital costs by pulling in more revenue then you might as well
| keep the old gear around longer.
| jeffbee wrote:
| I don't know why people always mention density. Google isn't
| constrained on floor space. If they need another 100 acres of
| Iowa for their servers to stand on, they'll just buy that for
| a comparative $0 cost.
|
| Density is an issue for people who are still renting from
| Equinix.
| greenail wrote:
| the substation has a limit, so do all of the power
| distribution systems.
| jeffbee wrote:
| Sure but that's the opposite trend from density, is it
| not? A dual 64-core EPYC Rome machine - and we know they
| are using these for web search, from published research
| papers - has 400W of CPU TDP alone, which is a more than
| double the per-host TDP of a Westmere EP (as an example
| of a retired platform). So if anything there is more
| empty space in the racks in 2021 than there would have
| been in 2011, based on the design power load of existing
| buildings.
| greenail wrote:
| The cycle for servers is 3 years, the cycle for the
| building is 30 years. What I'm trying to say is that if
| you can deliver more widgets per watt per sq ft by
| replacing the server than you go for that. If you can't
| why not keep the already depreciated server operating for
| another year. The incremental costs are mostly the power
| (and ac) plus the opportunity cost of putting a more
| efficient server in a year later. If it fails you just
| put in the newer server. If it doesn't you may save a
| bit.
| mattlondon wrote:
| Probably because intel chips feel like they have stagnated
| somewhat performance-wise while they milked the market IMHO.
|
| Why upgrade to the latest intel CPU when you get a paltry
| 100Mhz clock increase for the bother? May as well wait another
| year if 3 year old CPUs are pretty much the same performance as
| current models (give it take a few %)
| jeffbee wrote:
| Uh, both 3 and 4 are radical understatements of the economic
| lives of servers. They are TCO+ for 10 years in reality. For a
| company like Google or any other company designing their own
| equipment the usual reason to retire equipment (end of
| warranty) does not exist.
|
| There are still Sandy Bridge CPUs available in GCE. Sandy
| Bridge came out in Q2 2011.
| Shadonototra wrote:
| What value do they provide to our society?
|
| We empower the wrong things..
| dietr1ch wrote:
| I'd love to have access to a free search engine, email, and a
| video platform. But objectively running and improving those
| systems takes money that people is not really willing to pay
| for. Wikipedia is a good example on how our anchor on that
| everything digital must be free keeps us from developing free
| systems. I wish we could change that.
|
| Now, what value do those systems provide? I would definitely be
| living a much different (and likely worse) life if I didn't had
| access to the Internet and systems like those since middle
| school.
| slownews45 wrote:
| Quick summary.
|
| Revenue up 41%!! Incredible for an already very large company.
|
| Op Margin also up to 32%?
|
| When you realize how hard walmart and friends works for every
| point of margin and growth - these guys are literally printing
| millions.
| belval wrote:
| Net income up 68%, that's terrifying high for a company that
| size. Good job everyone at Alphabet/Google.
| bsedlm wrote:
| what's really scary is that some of that profitability comes
| straight from governments "purchasing" capabilities such as
| recently the exposed deal
| https://www.dailymail.co.uk/news/article-10063665/Government...
| sidibe wrote:
| Don't see anything in there about government paying
| [deleted]
| Factorium wrote:
| Lockdowns and money printing are great for business. No wonder
| Google is deplatforming scientists and engaging in mass
| censorship.
| kansface wrote:
| More like the pandemic is good for pushing activities onto the
| internet of which Google takes its slice.
| TrainedMonkey wrote:
| And $2T dumped into stock market, portion of which companies
| have used on online ads to compete for increased revenue.
| mrep wrote:
| Where are you getting your $2T number from?
| TrainedMonkey wrote:
| Looking at https://www.investopedia.com/government-
| stimulus-efforts-to-... and roughly guesstimating $1.5T
| from direct loans / PPP and additional $0.5T from the
| knock off stimulus and inflation effects.
| mrep wrote:
| That's money given to people and businesses. Secondary
| effects could go into the stock market but not directly
| and I definitely would not call that dumping into the
| stock market considering most was probably used to keep
| business and people afloat.
| Jensson wrote:
| In a trickle up economy it doesn't matter where you drop
| it, it will go into the stock market.
| harmmonica wrote:
| This squarely falls into the anecdotal camp, but my
| understanding based on online commentary and more
| specifically the actual experiences of four of my friends
| who run businesses ranging from a two-employee,
| furniture-building firm that probably generates
| $300-$500k in annual revenue all the way up to a major
| concrete contractor with a thousand employees and
| hundreds of millions in revenue applied for and were
| granted government funds and not a single one of those
| companies needed the money to keep staff on the payroll
| because their businesses continued to operate as normal
| for the extent of the pandemic. At least one of those
| folks fully admitted to putting their entire $80k+ "loan"
| into the stock market (the cruise lines in particular
| when they were getting beat up early on). It's appalling.
| And yes I said friends. I'm not condoning it, but
| business people will justify by saying "that's why I pay
| taxes."
|
| I can't prove the scale, but I believe the op (or was it
| gp?) is right and those funds, to some extent, went
| directly into stocks, real estate, luxury automobiles,
| luxury watches, artwork and other assets, and a large
| percentage of the remainder found its way to those same
| places indirectly.
|
| I have no concrete evidence or source for this, but I
| don't think my friends are unique here. For as many
| businesses as you heard were struggling there were
| countless others doing ok or even well during the
| pandemic.
|
| Just trying to offer a different perspective on your
| comment.
| deadmutex wrote:
| Umm, a pandemic is not good for business. Many of the ads are
| bought by real businesses.
|
| "Alphabet has been viewed as a key beneficiary of the
| **reopening trade**, given it stands to gain from a pick-up
| in travel-related searches and advertising on Google Search."
| (** emphasis mine **)
|
| Source: https://finance.yahoo.com/news/alphabet-google-
| reports-q3-20...
| [deleted]
| dekhn wrote:
| There's a part of Chaos Monkey where the author describes
| driving past Google on a weekend and seeing empty parking lots
| while Facebook's were full (this was during Google Plus). He
| concluded that Google no longer had a fire in the belly and
| facebook was going to overcome it, not just in social
| mindshare, but ad revenue.
|
| Conditions changed.
| buryat wrote:
| > empty parking lots
|
| people working remote
| cornstalks wrote:
| During the Google Plus days? Not so much.
| azinman2 wrote:
| And indeed FB did eat their lunch in social.
| dekhn wrote:
| and in doing so, set themselves up for much larger
| failure. Google instead pivoted that energy into cloud,
| which is now broken out in their earnings.
|
| I was one of those googlers who, when Plus was announced,
| wondered "why aren't we announcing an AWS competitor?"
| jeffbee wrote:
| At the same time Facebook tried and failed to take on
| Gmail.
| lostdog wrote:
| Because they worked more hours, or because they chose to
| build something less stupid?
| dragonwriter wrote:
| But not "not only in social mindshare, but in ad
| revenue".
|
| Social is just (fom a business perspective) a tool for
| getting an audience. The thing both Google and Facebook
| are selling is advertisement placement. Winning in one
| area of free "services" to build an audience to deliver
| ads to but not winning in actually selling ads...isn't
| winning.
| DenseComet wrote:
| Thats an insane conclusion imo. Weekend work being normalized
| leads to unhappier employees. Working longer also doesn't
| just mean more productivity, there's been many cases of four
| day work weeks causing no change.
|
| Employees are a company's most valuable resource. A company
| looking to grow and innovate must take care of its employees
| and part of it is respecting their time.
| nostrademons wrote:
| The dirty secret of tech is that markets matter more than
| effort or smarts. If you have product/market fit and a decent
| technological lead in a market that is large and growing, you
| will do better than a company that does not have PMF or a
| good market, regardless of how hard you work. (This explains
| so much about Oracle.) Social media mentions are probably a
| better sign of how well you'll do than full parking lots.
|
| I'd bet that Google & Facebook's current run-up is largely
| driven by inflation and higher ad prices. FB even said as
| much in a recent earnings call. Jerome Powell did more for
| their business than any employee up through the CEO did.
| whimsicalism wrote:
| > I'd bet that Google & Facebook's current run-up is
| largely driven by inflation and higher ad prices.
|
| What does this mean? The dollar didn't inflate 68%.
|
| If you mean that companies are investing more capital into
| advertising because capital markets are looser, sure, but
| why is that a bad thing again?
| dekhn wrote:
| Google's revenue growth came at least in part by creating
| two new markets that it has control over: youtube ads and
| mobile ads. In both areas, Google was able to couple a
| rapidly growing product with new ad space that it
| auctioned. I doubt most people appreciate quite how
| effective Youtube and Google Play are at delivering ads to
| users and money to Google. It's not just inflation and
| higher prices- it's a massive growth of the market.
| gitfan86 wrote:
| markets and moats matter. Anyone can get revenue selling
| tomatoes, the problem with tomato farming is that there is
| no moat, you will not be able to sell at a price much
| higher than the next farmer down the street.
|
| If there were 100 good search engines the price for
| advertising would be 90% lower
| bduerst wrote:
| >If there were 100 good search engines the price for
| advertising would be 90% lower
|
| Would it really be that much though?
|
| I thought search ads were auctions - i.e. competition for
| impressions/clicks directly correlates to the price of
| advertising.
|
| If you have search users distributed across 100
| platforms, the competition for impressions/clicks is
| going to be super low on all platforms, but you'd have to
| advertise on 100 platforms to get the same level of
| engagement, adding it all back up but with 100 middle men
| this time.
| jsnell wrote:
| > If there were 100 good search engines the price for
| advertising would be 90% lower
|
| Why do you think that? The revenue is determined by the
| number of searches showing ads, the click-through rate,
| and the cost per click. The total across all companies
| would clearly not change for the first two metrics. Would
| the cost per click change? Given it's determined by an
| auction, I don't see how it could change. If you have an
| incentive to bid $1 on an ad on a single site with 100x
| traffic, you'd be equally willing to bid $1 on each of
| 100 separate sites with 1x traffic.
| gitfan86 wrote:
| If competition existed company A would offer a better
| product than just cost-per-click. Then company B would
| offer another product better than company A, and so on.
| Google is like a person that owns the only road between
| two towns. You have to pay them until other people can
| build ferries or airports or trains. At which point you
| can exit the mentality of "we have to take this road and
| pay per drive"
| jsnell wrote:
| Sorry, that still makes no sense to me. Why would company
| B have to make a better product in reaction? They're not
| being impacted at all. Company A having more and cheaper
| ads certainly won't make any users switch from B to A. It
| also won't make any existing advertisers stop spending on
| ads on B and run more ads on A, since the ads on B must
| have been profitable at the current price, and those ads
| are reaching a different set of users than the ads on A.
|
| Is it possible that those cheaper ads could create more
| demand for ads somehow? It seems hard to believe it
| could. Either it's a search term that people were already
| willing to buy more expensive ads for, and are now just
| happy to pay less, or it's a search term that nobody was
| willing to bid even minimum price for.
|
| What's actually going to happen in your scenario is that
| company A loses 90% of their revenue, goes bankrupt, and
| their domain is sold for a fair price to Company B or one
| of the other 98 remaining competitors.
| candiodari wrote:
| > If there were 100 good search engines the price for
| advertising would be 90% lower
|
| And the number of ads and hidden ads would be like Cable.
| dragonwriter wrote:
| > If there were 100 good search engines the price for
| advertising would be 90% lower
|
| If there were 100 good search engines for end users, but
| opinions of different users on quality were highly
| correlated, the traffic would be very disproportionately
| on the one that was perceived as even very slightly
| better.
|
| And they'd make the bulk of the advertising dollars.
|
| And they'd have the bulk of the money to throw at
| improvements.
|
| And the next year, unless some competitor got more access
| to outside investment to make up for that, the gap would
| be bigger, they'd have even more of the search audience,
| and even more of the advertising money, etc.
| gitfan86 wrote:
| You are describing 99 shitty search engines and 1 good
| one.
| dragonwriter wrote:
| Sure, if "slighty worse that good" is "shitty".
|
| When you can't sell your slightly-less-good product for a
| lower price to make it value-competitive to slightly-
| more-good one, there's very little reason for all the
| users not to go to the slightly-more-good one. With free
| services given away to get an advertising audience, that
| makes slight advantages very prone to positive feedback
| loops.
| HWR_14 wrote:
| Once more, I don't understand how advertising revenue keeps
| growing. Once people install ad blockers, they don't typically
| remove them. And ad-blockers keep growing.
|
| So who is actually seeing these ads? How can those numbers be
| going _up_?
|
| I understand, intellectually, that not everyone thinks like me.
| But I don't fundamentally understand why people allow ads on
| their devices when they can prevent it. Then again, I don't
| understand a lot of behaviors people exhibit.
| jarek83 wrote:
| Please mind that google started to show search results in a
| fashion that if search "A company" then the first link is the
| ad pointing to the "A company" website and only next is the
| same exact link to that company website. This is pure cheating
| and I'm amazed how they can both: laugh at advertisers face and
| keep it legal.
| slownews45 wrote:
| Don't advertise that way if you don't want to? I'm failing to
| see what the issue is. If you don't mind and advertiser
| saying, hey, look at me instead, then don't pay google to
| advertise.
| antisthenes wrote:
| > So who is actually seeing these ads? How can those numbers be
| going up?
|
| Advertising spend could be going up without more people seeing
| the ads. Since businesses compete for limited advertising
| space, they are likely to keep increasing the size of their
| bids for click.
|
| Alphabet's revenue could be growing as a result of eroding the
| margins of other businesses, who are now forced to spend more
| money for the same amount of clicks.
|
| I don't claim this to be the exact scenario that reflects
| reality, but it is a very plausible scenario nonetheless. A
| nice little lesson in why lots of things are zero-sum (even
| though we'd like to pretend they aren't)
| vlovich123 wrote:
| Assuming Google has a good handle on click fraud and the growth
| is real:
|
| * Some % of people install adblockers, but that number doesn't
| grow that much.
|
| * There are more people being reached by advertising than ever
| before. 7.7 billion people in the world & still only about half
| are online. So overall the number of users they're reaching is
| growing even if they lose some to adblockers.
|
| * You currently have to install an adblocker per device or even
| application (unless you are in the minority putting it on your
| router at home). This means that adblock rates vary and a user
| installing an adblock somewhere doesn't mean that user is
| globally lost from advertising reaching them somehow.
|
| * There are multiple modalities for ad networks (app, web
| pages, etc etc). Google is involved in all of them. Ad blocking
| has variable performance across those networks unless you
| really know what you're doing (e.g. in-app advertising is very
| hard to block on iOS).
|
| * The price of ads can vary driving up revenues. Not all ads
| are priced equivalently so Google can drive value that way by
| making the ads more valuable to advertisers or making more
| expensive ads more appealing.
|
| * Inflation will naturally increase total dollar amounts even
| if everything else remained constant.
| human wrote:
| I manage near 1M$ in Google Ads per year and can tell you CPC
| is going up while impressions are stable.
| trevyn wrote:
| Is your ROI decreasing? (i.e. CPC could be increasing, but
| conversions / order value could be increasing as well)
| flyinglizard wrote:
| Ads become more expensive, conversions and ROI keep sliding
| down, but Google and Facebook are almost the only game in town
| for online advertising. Where would you go that's not one of
| their properties?
| pcurve wrote:
| I also think there's a lot of negative ROI on ad campaigns,
| with no shortage of new players queuing out the door to try
| their luck in digital space.
| jeswin wrote:
| Search ads and Youtube ads are unaffected by ad-blockers, and
| that's a big chunk of their revenue.
| TheDong wrote:
| > Once people install ad blockers, they don't typically remove
| them. And ad-blockers keep growing
|
| > don't fundamentally understand why people allow ads on their
| devices when they can prevent it
|
| The market share of iOS also has increased a bit, and iOS does
| not allow ad blocking very easily. You have to configure some
| sorta DNS-based ad blocking, which is harder than the
| traditional desktop firefox/chrome adblockers to install.
|
| Usage of computers has also shifted towards phone/tablet apps,
| away from desktop browsers... And ad-blocking in apps is hard
| to impossible compared to on desktops.
|
| I'm not surprised people continue to see a lot of ads as we
| move from the web, where mature ad-blockers exist, to apps,
| where ad-blocking is harder and less mature.
|
| Even very technical people usually don't bother with pi-hole
| and see ads in free android apps.
|
| Oh, and also, there are occasionally cases of an ad-blocker
| removing itself somewhat, i.e. adblock plus used to be the go
| to recommendation for ad-blocking, but they started allowing
| google ads through in an update
| (https://adblockplus.org/en/acceptable-ads)... so maybe someone
| installed adblock plus because that's what they remembered from
| 10 years ago (and adblock plus has better SEO than ublock
| origin too), and thus still gets google ads now.
| lotsofpulp wrote:
| >The market share of iOS also has increased a bit, and iOS
| does not allow ad blocking very easily. You have to configure
| some sorta DNS-based ad blocking, which is harder than the
| traditional desktop firefox/chrome adblockers to install.
|
| Are you considering installing a content blocker not easy? Or
| not ad blocking? Firefox Focus is free and a few taps away
| from the app store.
|
| Seems easier to me than installing ublock origin on desktops.
| Which people can easily be misled into installing ublock, or
| adblocker, or any the other scammy ones that do not really
| block ads or do something else nefarious. It is harder for a
| non technical user to get fooled by an iOS content blocker.
| ac29 wrote:
| Safari content blockers dont block in-app ads, though, do
| they?
|
| Similar issue on Android, you need a DNS based or VPN based
| solution to block ads in apps. Thats probably too technical
| for 99% of the market.
| TheDong wrote:
| > Are you considering installing a content blocker not
| easy? Or not ad blocking?
|
| If you google how to install an adblocker on iOS, you get
| garbage results which will mostly only work for safari, and
| will mostly not block google's ads ("acceptable ads").
|
| If I google 'ios ad blocker' and install the apps in the
| order recommended, I think I'd have to go through ~10
| garbage apps before I got to firefox focus.
|
| ... And I think for a lot of people, firefox focus isn't
| viable because they want their chrome bookmarks to sync
| etc.
|
| When I said "DNS-based ad blocking, which is harder than
| the traditional desktop firefox/chrome adblockers to
| install.", I was mostly thinking of installing pi-hole
| since that's the reliable way to block stuff on iOS, since
| otherwise the matrix of content blockers is a total mess.
| I'll stand by pi-hole being too much for most people.
| sillysaurusx wrote:
| Well, youtube videos open in the youtube iOS app. It's hard
| to block ads in a native app.
|
| Is there a way?
| comrade555 wrote:
| Uninstall YouTube app and have yt links open in brave.
| Works like a charm.
| ur-whale wrote:
| > when they can prevent it.
|
| Most people wouldn't know where to start to install an ad
| blocker.
|
| They don't even understand the concept, much less know that it
| even exists.
| vgeek wrote:
| They can adjust Quality Score parameters or bid floors to
| increase the CPC and/or make ads look more like organic results
| to increase the ad CTR. Both will increase their earnings per
| pageview.
|
| More auction participants mean higher bids.
|
| Removing match types such as phrase, while automatically
| shifting phrase to broad modified helps increase their fill
| rate & number of participants per auction.
|
| Eliminating second price proxy auctions in display ads (search
| likely soon to follow?) will likely yield measurable increases
| in CPC.
|
| A few years back they went from up to 10 ads to 7 on most--
| they have that dial to adjust if necessary.
|
| Products like Google Shopping take up more and more space on
| the SERPs and are _typically_ pay to play. They have higher CTR
| due to carousel images & once you click into that ecosystem,
| nearly every click yields ad revenue.
|
| Chrome behavior with URLs is conditioning users to search for
| brands (versus typing in the full domain name), who then have
| to pay to defend their brand terms from brand poachers.
| bduerst wrote:
| >adjust Quality Score parameters or bid floors to increase
| the CPC and/or make ads look more like organic results to
| increase the ad CTR.
|
| That's not really how auctions work. Raising the price floor
| would just exclude ads with CPCs below the floor from paying,
| and since they're already getting paid for the maximum CPC
| bid at the time anyways they would just make less revenue.
|
| If they messed with quality score discounts in an
| exploitative way, the entire billion-dollar SEO industry
| watching it would notice and cry foul.
| vgeek wrote:
| Ad Rank is a function of bid and QS ( _heavily_ weighted
| towards CTR). Adjusting weighting of any of the three
| public components of QS will impact _all_ participants,
| ignoring cases of exceeding max bids, all bids should
| increase proportionately-- with some participants having
| different impacts, but overall a net increase.
|
| Bid floors will exclude ads from showing unless a certain
| ad rank is met. If users want to continue (or start)
| receiving impressions, they need to meet the adjusted
| threshold. This won't be as common on terms like "chicago
| movers", but when you get into the longtail and use an
| Alpha/Beta structure, it can be relatively common to get a
| "bids below threshold" for lower volume terms that have
| less (think <5) auction participants as shown in search
| insights & sampling the SERPs manually. When you get into
| these niche terms, you assume terms will be cheap due to
| lack of participants, but that isn't typically the case.
| sahadeva wrote:
| 1. More people are getting on the internet all the time,
| especially new markets like India (who likely don't use ad
| blockers).
|
| 2. We're still early internet, and people rely on the internet
| more and more (and therefore search more). E.g. in Covid,
| people are likely transitioning more of their life online,
| which is good for Google.
|
| 3. As companies and the broader economy do better, companies
| will invest more in growing themselves, often by buying more
| ads. Companies are doing very well right now (see stock
| market), so there are more ads being bought AND the price per
| ad will likely go up because there is more competition.
|
| 4. There is still plenty of untapped ad real estate for Google
| to monetize as well (searches that could generate ad revenue,
| and web pages that can surface better ads).
|
| This combination is great for Google.
| summerlight wrote:
| 1. There's a sizable amount of budget in a process of migrating
| away from offline advertising market, partially thanks to
| COVID. This increases auction competition.
|
| 2. Online advertising still have a room for better optimization
| in many ways. You'll be surprised on how primitive bidding
| systems are for a large fraction of advertisers. Better bidding
| means ads more likely to convert.
|
| Also note that HN readers are extreme outliers compared to
| usual people who actually spend money on ads. My gut feeling is
| that perhaps >90% of people don't care much about whether it's
| ads or not if it seems relevant enough for them.
| lotsofpulp wrote:
| The price of the ads could be going up at a quicker rate,
| especially as more and more viewers from previous ad spending
| channels (such as TV channels) move to online options (such as
| Youtube).
|
| Also, the number of people using ad blockers must be extremely
| low. Even crazier, most people who I talk to about content
| blockers on iOS zone out of the conversation before I can even
| get to how easy it is. They do not even care that much about
| the ads or notice how annoying they are.
|
| Then again, many or most people still watch live sports and old
| school TV channels, which are chock full of ads. I cannot even
| stand too obvious product placement, much less ad breaks. So
| while I will go out of my way to remove ads from my life, there
| are probably 9 others who will not spend a single second
| thinking about it.
| simfree wrote:
| Sounds like a bad pitch then. Shorten it up, better not to
| overdo a sales pitch than to do too short a pitch.
|
| I don't pitch Signal, but when I do see it pitched those that
| are most successful pitch 1 directly useful feature as why
| you should install it.
|
| Eg: Get Signal, our videos won't look like a fuzzy potato
| lens image
|
| Remember, your reason should be a problem the person your
| pitching to has faced and would like to see fixed. If they
| are having trouble with a different issue, pitch that
| instead!
| stathibus wrote:
| "Get Signal, it _probably_ won't send random pictures to
| your friends."
| Kafkish wrote:
| > Then again, many or most people still watch live sports and
| old school TV channels, which are chock full of ads. I cannot
| even stand too obvious product placement, much less ad
| breaks.
|
| Everybody is different. Back in the early 2000s when I used
| to watch TV, I actually enjoyed ads, because they tended to
| be more entertaining than the TV shows themselves (remember
| the Budweizer lizards and eTrade babies). Even when online
| ads because popular, when they were still contextual, I
| really did not mind. It was only when ads began to follow
| people around online that I put an end to it.
|
| But I still watch live sports - only online, since I no
| longer have TV service. I get around ads on NFL games by
| having more than one game streaming on different tabs, then
| switch to the one that's not in an ad break.
|
| Online, there are no ads during football (the real one),
| tennis and volleyball matches, so I have very little to
| complain about.
| klelatti wrote:
| Alphabet + Facebook revenue now represents 1/2% of world GDP and
| still growing rapidly.
|
| Edit: possibly not quite but almost certainly 1/2% excluding
| China.
| [deleted]
| TameAntelope wrote:
| Considering the world would be more than 0.5% worse without
| Google, I guess they're still undervalued?
| gmiller123456 wrote:
| You're making the assumption that no company, or companies,
| would step in and provide a similar service for a similar or
| better value.
| Jensson wrote:
| Bing search, edge browser and windows phones? Amazon owning
| youtube? Companies would step up, but not sure if that
| would be a better scenario than what we have now.
| Kranar wrote:
| Don't see how your claim follows. If another company would
| have stepped in to provide a similar or better service
| instead of Google, then it would have been that company
| worth 0.5% of world GDP.
| [deleted]
| theevilsharpie wrote:
| This isn't even close to being true.
| caturopath wrote:
| It's not quite half a percent by most accounts of GWP, but
| it's around there.
| theevilsharpie wrote:
| 0.5% of global GDP would be more reasonable, although a
| fraction is an odd way of writing it.
|
| It also doesn't tell us much other than Google and Facebook
| are large companies with significant earnings. You can
| probably provide a similar percentage for VW/Toyota,
| Boeing/Airbus, Walmart/Amazon, or any other pair of large
| companies that are the leaders in their respective markets.
| Indeed, if you lumped the entire Fortune 500 together,
| they're probably make up a sizable portion (if not the
| majority) of world GDP.
| klelatti wrote:
| 1/2 = 0.5 last time I checked but if you find 0.5 more
| reasonable that's fine.
|
| Seriously though, Wal-Mart has $500 billion revenues but
| it's not growing at the rate of these companies. By lots
| of metrics these companies are increasingly globally
| significant in a way that most of the examples you quote
| aren't.
| kgwgk wrote:
| Walmart on its own has more revenue than Google and
| Facebook combined.
| Diederich wrote:
| Yup, WMT most recently reported $566B in revenue.
| beambot wrote:
| World GDP is $80T. Google's run-rate is $240B revenue and
| Facebook's is $116B. That's $356B / $80T => 0.445%. Close
| enough for internet math.
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