> Google has the focus of a 12 year adhd kid who just ate a whole birthday cake, unless when it comes to data collection.

A decade ago I was an intern at Google. One of my mentors said something that has stuck with me: "Google found a hose that money pours out of and it's name is online advertising. All we do now is desperately try to find another hose."

Google's strategy for a long time was: Hire every clever person you can; give them some creative freedom; see if any of them come up with a trillion dollar idea.

Only now they've 'grown up'. 20% time is dead. There is no second hose. They've mostly given up on the idea of a clever person finding a new money-hose. They just focus on the one they have now.

>20% time is dead. There is no second hose. They've mostly given up on the idea of a clever person finding a new money-hose. They just focus on the one they have now.

Isn't that how they've always operated? Gmail was launched in 2004 and that sure wasn't a money-hose. But it did serve as yet another platform to support their money-hose since they could scan your emails and serve you ads.

It's really only a recent change to actually monetise Gmail beyond ads. They sell it as part of G Suite and as part of Google One. Not sure if Google One brings in the dough but surely G Suite makes enough to justify its existence.

Google's revenue is more diversified today than it's ever been. This is a facile take.

Being "well diversified" is subjective. But in freelance/contracting, the rule of thumb is to never have a customer account for more than 25% of your yearly income. You diversify your client base so when one walks away, it's never too big of a hit.

Ads make up 80% of their revenue. That's not diversified. That's an ad company that dabbles in other things. If Shell or BP's revenue was 80% oil and 20% solar, wouldn't you still call them oil companies that dabble in solar?

Here's one breakdown of it showing 88% of revenue from ads [2017]: https://www.visualcapitalist.com/chart-5-tech-giants-make-bi...

I'd like to see one for operating income, though, because I know AWS has a higher operating income than Amazon's Retail arm, even though Retail has a much higher revenue.

To quote the OP, "There is no second hose."

My statement is that yes, there is a second hose.

I've never said they're not primarily an ad company.

If it constitutes significantly less than 20% of their revenue, it's not a "hose that pours money out". So no, Google has not yet found a second hose, even if they've found other revenue streams.

Non-ad revenues are a $36B business (annualized based on Q3 revenue).

What's the threshold for something being a "hose"? A $36B business is a pretty big business!

That $36B doesn't come from a single source. Google Cloud is their single largest non-ad revenue stream, at $3.4B in Q3 (or 7.4% of total revenue). The rest of their non-advertising revenue ($5.5B, or 11.8% of total revenue) is lumped into the "other" category, which implies that they have a lot of smaller revenue streams that add up to a larger figure—not a single hose. So I guess you could maybe call Google Cloud a "hose" at ~$14B per year, but it certainly doesn't print money like their advertising business, and is a relatively small source of revenue for such a large company.

13 years ago ads was roughly $14B annual revenue for Google. Was it a "hose" back then?

Everything is relative. Back then, for Google's size, their ad business was basically printing money. Today, given their size, Google Cloud and the rest of their non-ad businesses are barely significant—over 80% of their total revenue still comes from ads, and that is only very slowly shifting. Maybe in another 13 years, Google Cloud (or another venture) will catch up to the ad business (though I'm skeptical), but today, that's nowhere near being true, and they still largely depend on that single source of revenue. So are they more diversified than they used to be? Sure. But to say that they have found a second hose that's anywhere near as profitable as advertising is misleading at best, or blatantly false at worst, at least as it stands today.

A $36B revenue business makes Google's non-ad business roughly the 94th largest company in the US.

https://en.wikipedia.org/wiki/List_of_largest_companies_in_t...

Says the commenter with zero evidence to support their claims.

There's no posted evidence for the idea that Google only makes money on advertising, either. Can we have a discussion where we assume that everyone isn't an idiot who needs a link for every statement? Or do you seriously think advertising is the only way Google makes money? If so, sibling comment posted some nice links that one would do well to read.

They're publicly traded. Their revenue sources are open for the public to read. The other guy saying they're diversified linked to their quarterly to show 80% ad revenue. That's pretty much "they're an ad company".

A decade ago when the OP was an intern it was 100%! Non-ad revenue source have grown by infinity percent!

I made a very specific claim and I'm not sure what everyone's problem is. Google has found other sources of revenue and is actively trying to grow those sources. There are other hoses. I have never claimed it's not an ad company or that ads have somehow gone away. Because that would be dumb and factually wrong.

Come on, anyone can read GOOG financial statements.

https://abc.xyz/investor/static/pdf/20201030_alphabet_10Q.pd...

Q3 2019, ads were 84% of revenue Q3 2020, ads were 81% of revenue

It's not a massive change, but it's changing and ads are at the lowest percentage of overall revenue they've ever been.

> It's not a massive change, but it's changing and ads are at the lowest percentage of overall revenue they've ever been.

"More diversified than it's ever been" can be factually true here, but for the purposes of this discussion was highly inaccurate.

OP was directly responding to:

> They've mostly given up on the idea of a clever person finding a new money-hose. They just focus on the one they have now.

The financial numbers suggest they have not given up and have succeeded incrementally towards other sources since. How else do you correct the above statement?

Agree. Cloud, health, self-driving cars, devices.. all these have the potentials to become the next big thing.

Growing from $1B to $10B is really difficult, unless you have virtually no competition.

> There is no second hose. They've mostly given up on the idea of a clever person finding a new money-hose.

I think they are quite shortsighted. The idea of running Google as a conglomerate, turning it into Alphabet, was good. But somehow, they have not been able to get rid of those layers of middle management that kill innovation. I've heard that Calico and other ventures are really political, and lot's of people that moved there hoping to do great work are quite frustrated.

Which is a shame, because they do have know how and technology to achieve great things. Just out of the protein folding results of this week you could spin off dozens of highly successful startups.

>When a big company offers a service or product you expect a long shelf life so you can justify the time/money investment to use it.

I bought a Chromebook in 2014. It still works, but support was discontinued earlier this year. That sounds okay to me. I wonder if Poly was popular? I've never heard about it 'til today.

Alternatively, it's time to adjust expectations and understand that if a product or service doesn't hit the growth curve Google expects, they sunset it.

A lot of businesses would be more successful if they learned how to do this across their own products and features. Instead engineers drown in KTLO, adding to cognitive load not only for employees but customers too.

> If you stumble across an open source or just some other random project by a single dev, you have an instinctive expectation that the project could die at any time.

Ironically at this point, I'd place more trust on an open-source project because at the very least, if the maintainer abandons it, I could fork it and potentially self-host.

They could continue to host these services for basically free...I guess the security vulnerabilities would grow over time, making them liable.