Re:Alphabet reports Q1 earnings
by cjsplat on Tuesday April 27, 2021 @11:26PM
(#26965200)
First, the revenue isn't bad for a 10 year old business.
Eg. Google took 9 years and Facebook took 11 years to get to a $4B quarter, but of course apples and oranges on business models. Advertising has a massive margin, so Google and Facebook were very profitable at those points. AWS took about 11 years to get to a $4B Q. (You get to do the adjustment for inflation ;-)
The problem is that unless you are monitizing a private cloud (Google-classic, Facebook, Apple, etc), the Cloud revenue sweet spot is enterprise sales, and enterprise sales are hard, with long cycles and expensive sales support requirements. When you are playing catch-up there are many more ways to lose a deal than close one.
Year-over-year, Google Cloud made about $1.25B more, and lost $800M less. It sure looks like they will be in the black by the end of this year. It would be a long business cycle for a VC, but looks like a well managed business expansion.
When will the entire venture go ROI positive? Dunno, but in some ways that is a sunk cash fallacy. It looks like a pretty decent business now.
(Ex-Googler still holding GOOG in case either of those color your view of the above.)
Eg. Google took 9 years and Facebook took 11 years to get to a $4B quarter, but of course apples and oranges on business models. Advertising has a massive margin, so Google and Facebook were very profitable at those points. AWS took about 11 years to get to a $4B Q. (You get to do the adjustment for inflation ;-)
The problem is that unless you are monitizing a private cloud (Google-classic, Facebook, Apple, etc), the Cloud revenue sweet spot is enterprise sales, and enterprise sales are hard, with long cycles and expensive sales support requirements. When you are playing catch-up there are many more ways to lose a deal than close one.
Year-over-year, Google Cloud made about $1.25B more, and lost $800M less. It sure looks like they will be in the black by the end of this year. It would be a long business cycle for a VC, but looks like a well managed business expansion.
When will the entire venture go ROI positive? Dunno, but in some ways that is a sunk cash fallacy. It looks like a pretty decent business now.
(Ex-Googler still holding GOOG in case either of those color your view of the above.)