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.