[HN Gopher] Google surpasses $2T market cap
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Google surpasses $2T market cap
Author : mrbishalsaha
Score : 66 points
Date : 2024-04-28 19:26 UTC (3 hours ago)
(HTM) web link (qz.com)
(TXT) w3m dump (qz.com)
| blackeyeblitzar wrote:
| No company should exist at that size in a society that has a
| healthy distribution of power and fair competition. These
| businesses need to be split up ASAP. And if they aren't, they
| should be heavily taxed and heavily regulated. If you're that big
| and powerful, you are pretty immune to competition since you can
| eat losses, copy ideas from others, push your services unfairly,
| bundle things, etc. We need higher taxes and new anti trust laws
| that actually do something based on size or a lower threshold of
| market share, even if there's no evidence of consumer harm.
| Getting bogged down in lawsuits around old toothless antitrust
| law is why nothing ever changes.
|
| Also, at that size you're basically like a government service.
| Companies like this should be held to standards as if they were
| publicly owned utilities, on topics like pricing or transparency
| or free speech or whatever.
| exe34 wrote:
| Tax them on revenue. And introduce due process and minimum
| expectations for services - e.g. if you mess around with banks,
| you can get a basic account just to survive with. If you mess
| with Google, you can lose your lifetime worth of emails,
| contacts, photos, etc.
| carlosjobim wrote:
| They are taxed on revenue.
| VirusNewbie wrote:
| It's amazing that you're the third person on this thread to not
| understand what market cap is.
| medo-bear wrote:
| Market cap refers to size. The comment you are replying to is
| talking about size
| VirusNewbie wrote:
| You're confused. It refers to the price of all available
| shares. We don't say "The size of Meta shrunk in one day by
| 20%" because the share price fluctuated. That would be
| retarded. No one refers to the 'size' of a company is
| referring to market cap.
| kaashif wrote:
| > No one refers to the 'size' of a company is referring
| to market cap.
|
| Saying a company is "the largest by market cap" is very
| common. Just saying "largest" on its own is ambiguous.
| "Largest by revenue" is also very common.
|
| "Biggest by market cap" --
| https://www.investopedia.com/biggest-companies-in-the-
| world-...
|
| "Microsoft is the largest company in the world, with a
| market cap of $3.13 trillion." --
| https://www.fool.com/research/largest-companies-by-
| market-ca...
|
| I think "large" usually means revenue, but it can mean
| market cap too.
| medo-bear wrote:
| Your presumtion of others' inability to understand is
| making you confused. No one said market cap equals size
| of a company. But market cap does measure financial power
| if we talk about percentage of shares owned. Anyway no
| single private entity should have that amount of market
| cap.
| lolinder wrote:
| Market cap refers to perceived value to shareholders as
| measured by the stock price, which may or may not have
| anything to do with the size of the company or the amount
| of profit that it's making.
| HDThoreaun wrote:
| But having a large market cap necessarily gives a company
| a large amount of influence and power because they can
| sell stock to buy things.
| sulam wrote:
| This is not how it works at all. Companies do not sell
| stock except in specific circumstances that are tightly
| regulated. Often they don't sell stock at all once
| they're public, because that increases the number of
| shares outstanding, causing the share value to drop,
| something investors generally do not like. I don't know
| the last time Google sold stock, but it would have been
| long ago because you only need to do this when you want
| to raise cash that you cannot get through operations, and
| Google has had billions of dollars in the bank for many
| years now.
| mercutio2 wrote:
| Publicly traded companies create _new_ stock, constantly,
| in the form of RSUs.
|
| It is true that they aren't technically selling the
| stock, they're diluting existing stock and then using the
| created stock as compensation, but this seems like an
| unimportant distinction.
|
| This does grant the company some power. Not obvious to me
| that power is nefarious, but it's quite real.
| sulam wrote:
| The stock they use for this is not created constantly,
| it's created in a block set aside for that purpose by
| board action. Companies do this relatively infrequently.
| nickff wrote:
| If this were true, Tesla would be (almost two times)
| 'bigger' than any other automaker, but it actually has less
| than one third the revenue of Toyota. By what measure is
| TSLA bigger than Toyota?
| pcthrowaway wrote:
| Market cap obviously /s
| pyuser583 wrote:
| Why did Google+ fail, but Reddit succeeded?
|
| Why was it so easy for Duckduckgo to establish itself?
|
| Was was Brave able to take a bit from Chrome, even when
| Microsoft Edge failed?
|
| Google faces strong competition. Even on its core revenue
| stream, advertising, Facebook was able to beat it.
| apantel wrote:
| So many ads...
|
| Edit: but it's so apt. What that valuation is actually showing
| you is the value of sitting in between people looking for things
| and people looking to sell things to people looking for things,
| and turning that position into an ads engine increasingly at the
| expense of enabling people to find what they are looking for. The
| valuation goes up to the extent ads are prioritized over just
| getting out of the way and giving people what they are looking
| for.
| mrbluecoat wrote:
| So a company can make more than Australia but not be a monopoly?
|
| [1]
| https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(no...
| cherryteastain wrote:
| GDP is similar to revenue, not to market cap. Google's revenue
| is significantly lower than the GDP of Australia.
| adverbly wrote:
| Actually no:
|
| Australia GDP: 1.7T
|
| Google annual revenue: 0.3T
|
| Australia effectively creates an entire Google every single
| year.
| bdjsiqoocwk wrote:
| Not that it's very relevant, but your comment made me wonder:
| for the purpose of making these comparisons, does it make
| more sense to compare GDP to a company's revenue or earnings?
| Why?
| grobbyy wrote:
| What's interesting to me are:
|
| - market cap
|
| - random layoffs
|
| - overstaffing
|
| - falling competence
|
| A lot of frictions build in there. I'm curious how it will play
| out.
|
| I tend to translate market cap for big companies into dollars per
| person. 8 billion people in the world, so Google expects $250
| profit per human being in average to be accurately valued.
|
| That feels high, but what do I know?
| Axsuul wrote:
| Market cap is not profit
| nabla9 wrote:
| Their P/E is 26. Same as Apple and Meta.
|
| Microsoft is 35.
| modeless wrote:
| > Google expects $250 profit per human being in average to be
| accurately valued
|
| I don't think your calculation makes sense. You ignored the
| earnings multiple. Companies are valued at a multiple of yearly
| earnings. A reasonable multiple is 20, so divide 2 trillion by
| 20 first, then by 8 billion, and that's $12.50 per person per
| year. Their current revenues are already over $9 per person per
| year!
|
| Now consider that in addition to search Google owns the single
| most widely used consumer operating system and web browser, the
| largest video site, a growing cloud business, the only
| alternative to Nvidia silicon for AI that's been deployed at
| scale, and other stuff like Waymo that has the potential to be
| enormous (it seems like a winner take all market to me, where
| the winner essentially owns all ground transportation, and
| Waymo is in the lead by far), plus still the largest AI
| research program in the world (even if it has had trouble
| turning that into products so far).
| mlyle wrote:
| Companies' intrinsic value is the present value of the future
| cash flows they'll generate. One way to guess at this is some
| multiple of current earnings based on what you think growth
| possibilities and risks are.
| awinter-py wrote:
| google's revenue is 300b, the mayan calendar ends in 6
| years, do the math + that's about 2 trillion
| Keyframe wrote:
| there are ~300-350m companies in the world also.
| pcthrowaway wrote:
| No idea how this translates to profit, but they're probably
| extracting revenue from a billion people at this point. I spend
| something like $150/year on youtube premium + music
| subscriptions, have spent probably a lifetime total of $300 on
| media content, and since I use their products a lot I'd guess
| advertisers are paying them more than $10-20/year for my
| eyeballs.
|
| I may be ahead of 7.6-7.8 billion people in terms of the total
| lifetime amount I'll end up funding Google's funnel, but of the
| portion that spends more than me there's room to spend a _lot_
| more (and you 're forgetting about people who haven't been born
| yet who will also be paying money to google one day)
|
| Market cap isn't really an estimation on how much money the
| company might make anyway, since Google doesn't pay it's
| shareholders dividends. It's just a way for people to speculate
| on how much a thing will be worth in the future.
|
| In theory there should be some relationship with current
| profits, but... did you take a look at Tesla any time in the
| last couple of years?
| scarmig wrote:
| > Google doesn't pay it's shareholders dividends
|
| Google just started paying a dividend.
| Bostonian wrote:
| Just because of inflation you would expect more companies to
| exceed 1 and 2 trillion dollar market caps over time. Their
| existence is not a problem to be solved. Google search, maps,
| email, books, scholar etc. are wonderful services that have
| created immense value.
| ein0p wrote:
| 2 trillion dollars worth of value, though? Doubtful.
| NotYourLawyer wrote:
| Market cap has almost nothing to do with _value already
| created._ It's the consensus guess at the discounted value of
| future cash flows.
| foolswisdom wrote:
| Future cash flows is usually pretty strongly related to the
| current state of things, but adjusted based on expectations
| of how it will play out in the future.
| xorcist wrote:
| I'd be surprised if a non-negligible fraction of investors
| actually made that calculation. Most buy for other reasons.
|
| Then we have the ginormous index funds who buy when buys
| are happening.
|
| We just collectively decided that the best thing for
| society is if everyone just buys stocks for their savings.
| Either directly or through pension funds. And now we're
| pretty much stuck with that.
| ChrisArchitect wrote:
| Related:
|
| _Google Earning Q1 2024 [pdf]_
|
| https://news.ycombinator.com/item?id=40162354
| d--b wrote:
| > its announcement of a first-ever cash dividend of 20 cents per
| share
|
| Ok so there has never been a dividend payment so far, so all the
| money investors get out from Google is from new investors that
| get in?
|
| Is that even allowed?
| kaashif wrote:
| No, the money for the dividend comes from Google's profits.
| Google is a very profitable company.
| papercrane wrote:
| All the money investors have gotten from Google has been in
| capital gains (i.e. buying low, selling high). There's nothing
| illegal or nefarious about that. In fact, it's extremely
| common, most stock investors gains will be from the underlying
| equity increasing in value. Dividends are just distributions
| that the company pays from it's available cash.
| coding123 wrote:
| Our national debt is so much that we need to give half a Google
| to China each year
| dukeyukey wrote:
| China only owns about $800 billion is US treasuries, so a one-
| time payment of 40% of Google should do.
| diob wrote:
| To be fair, debt isn't an indicator of anything but credit
| being used to build something now (aka an investment in the
| future).
|
| So we should be focusing on what that debt is being used to
| fund, more than the debt itself. In my opinion at least.
|
| Overall I agree though, the debt is massive and isn't actually
| being used to better anything within the USA.
| echelon wrote:
| The interest on that debt will become debilitating unless we
| inflate away our currency.
| zamadatix wrote:
| China owns < half a Google of US debt (i.e. ~0.84T). I think
| you conflated that with yearly debt payments instead.
| lokar wrote:
| Other nations holding us debt is a natural result of both the
| trade deficit and the USD being the world reserve currency.
| There is nothing really special or sinister about china holding
| US bonds.
| wslh wrote:
| I bet there will be short peaks in the next years. Basically, ads
| declining and we discover they are a kind of scam for most
| companies (we don't know the real algorithm to handle the
| inventory) and/or legal actions around the world (e.g. Europe).
| echelon wrote:
| I can't wait to use Google's own research on AI for content
| identification to strip out all ads forever.
|
| Even inline ads and submarine / subliminal advertising can be
| detected and excised.
| wslh wrote:
| The open source LLMs are working fine for image recognition.
| We have used the technology internally. For example, someone
| took a selfie in front of a mirror and the description as a
| result of the prompt also recognized that there was a mirror
| image there.
| bluedino wrote:
| I wonder what % is from ads that are straight garbage. AI
| generated celebrity voices, information on how to get the latest
| "stimulus" money, marketing schemes involving things like
| audiobooks or real estate, health scams...
| cloudking wrote:
| I've noticed an increase in really poor AI generated dubbed
| video ads, it's an interesting problem, they are not flagging
| these very well.
| mehulashah wrote:
| Google is doing what the street wants, which is a proxy for
| shareholders. The increase in ads revenue, the first ever
| dividends, and the layoffs. These are the tools that the
| leadership have, and mostly short-term. The long-term innovations
| haven't really taken hold. So, this may be the flame burning the
| brightest before it goes out.
| patrickaljord wrote:
| They still have one of the best AI tech now and for the
| foreseeable future (despite their woke filters) and a decent
| cloud platform. And of course as you say they have Ads but also
| Android. I do feel like they could do 100x better but I think
| they're still relevant innovation wise (and financially
| obviously).
| xyst wrote:
| Layoffs are paying off, congratulations. I guess.
|
| Trading the core of the business (or whatever is left of it - ie,
| "do no evil") in exchange for short term gains.
|
| Maybe we will see more "Project Nimbus" initiatives. Maybe a
| collaboration with North Korean, or Russian governments. Maybe
| this time they will sell out for $10B+ or more.
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