[HN Gopher] Alphabet First Quarter 2021 Results ___________________________________________________________________ Alphabet First Quarter 2021 Results Author : hencq Score : 66 points Date : 2021-04-27 20:31 UTC (2 hours ago) (HTM) web link (abc.xyz) (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] ___________________________________________________________________ (page generated 2021-04-27 23:00 UTC)