Operating costs ballooned $7.9bn, nearly 18%. That's nuts.
So many engineers but still shut down products every few weeks.
EDIT: Still FURIOUS they shut down Stadia. I hate you Google
You're the first person I have ever seen with this opinion. I want to know, back when this was released, what made you ignore all the people that said that the product would be a failure and that Google would shut it down quickly? I always saw that as the majority opinion.
Obviously I was wrong and have been actively ending my own usage of Google products because I have been burned for the last time.
Ultimately, they couldn't convince enough people to sign up, but that's a whole different story about product strategy.
There's no way in hell it's getting shut down when it's that critical to business operations.
This is just not remotely plausible of a shutdown target. It also dates back to 2006. I'm struggling to think of even five Google products I would name as being less likely to be shut down.
This is unlike, say, Reader, which was canceled with no replacement to this day.
But to give some credit where it's due: reimbursing all Stadia purchases is a very customer friendly way to shut it down
I'm I dumb for assuming that google must use GCP internally? Therefore making it pretty much immune from being shut down. I guess they could go full internal tool with it?
That seems less improbable than even a lot of other cuts. A science experiment that doesn't have a clear path to an assistive driving revenue opportunity much less something transformational? I'd probably make an argument that they have to keep plugging on GCP but could cut Waymo loose without much collateral damage.
I do get that there is a lot of extra complexity that goes from a startup solving a hard technical problems to a pre-IPO company that is solving a bunch of business problems as well as technical challenges. Yes companies gain less efficiency per hire as they grow, and many do grow for growth's sake these days, but it does make sense that some companies need a thousand people to do what a startup thinks they can do with 10.
But it certainly doesn't seem like Google is making great use of doubling headcount. On a product by product basis, at least for me, it feels like most Google products are worse than they were pre-pandemic.
If they had shown revenue growth highly correlated with headcount I would see strong evidence that my view is wrong, but the facts don't seem to point that way.
When you hire large number of engineers, you need to hire engineers to support those engineers. Then you need to hire people to support the engineers that are supporting the engineers and so on...
Basically as companies revenues grow, every cost center gets to put in a request to grow headcount. If you don't your colleagues will and you'll be looked down upon. then you take on shiny new non-essential projects and find ways to justify it. Launch it get promoted and leave. The next person comes in- decides it is crap- shuts it down and starts their own new project to reinvent the same thing . Org politics.
I dunno, MSFT products seem to have only gotten worse since 1995 - and their profits are doing just fine.
The quality of a product and its ability to make money seem to almost be inversely proportional.
In Google's case - what matters is - they're doubling headcount (largest expense) and revenue has barely budged.
It'd be nice if the products got better - but all they should really care about is if they're making more money.
What about the alienation of staff and users considered part of 'legacy' demographics?
whereas revenue went 65,118,000,000 to 69,092,000,000. Somewhat less of an increase.
You'd assume R&D is mostly fully loaded costs of engineers, but I suppose someone who really knows the financials could tell us for sure.
If it's capitalized, then it's not R&D, which is all expensed.
Using last quarter to corresponding 2018 quarter because these haven't released yet. - AMZN: 130% - META: 118% - AAPL: 55.8%
I think what happened was a the perfect storm: remote working made people be more at home and so more time spent online. Additionally, stimulus checks were juicy targets for advertisers that tried to sell people stuff to spend time.
Now, we are having inflation due to all those stimulus checks that forced central banks to hike interest rates. Moreover, energy prices and supply chains disruptions exacerbated the situation by driving more inflation and the cost of doing business. Advertisers understandably prefer spending less money.
Under these circumstances such a drop in unsurprising IMHO. Similar to the drop in Q1/Q2 2020.
Current Googler, opinions are my own.
All I’m saying is: best to avoid any post that is related to company internals in any way. The “New York Times” rule and all that.
Apple has very, very different policies on this than Google. Google is getting more conservative, but it's still a long way from Apple.
As a Googler also, I question is this really true? The only thing I can think that you are referring to (internal info of something I'm not directly working on) is...memegen. Anything secret I'm exposed to is much more technical than business directions. When we are talking about the general economy, we really are just talking about the general economy.
Yes, Google doesn’t expect or allow SWEs to handle comms on anything. But we are also allowed to express are opinions on anything unrelated to our work. I can imagine that you work or live in a much more strict/stifling environment?
Disclaimer: I don’t work at Google and my pseudonymous internet opinions are all definitely correct.
[1] It’s the official number, not a mistake or a ballpark. https://www.gao.gov/products/gao-22-106044
Said inflation is most likely the biggest culprit behind this (or upcoming, depending on how you define it) recession. Disposable income is evaporating and people are adjusting their purchasing behaviors. After all, who wants to buy anything they don't have to, when they feel that everything is so much more expensive than it should be?
Stimulus checks are not causing inflation. Corporations raising prices to increase profits are causing inflation.
Well, not Alphabet.
"Supply chain issues" don't just happen, like an earthquake. They're caused by government actions.
Hiking is meant to take heat out of the economy, doing so while the government was still pouring covid stimulus money into the economy would've been counterproductive.
Covid stimulus went on too long (later stimulus checks, mortgage forbearance, eviction bans), well after people had returned to their lives. And we are only beginning to see just how much of that money had no productive impact on the economy (PPP fraud, theft of unemployment benefits, scams around fake tests and masks).
Billions of dollars have been spent without contributing to GDP, governments need to cut back fiscal policy to control inflation.
https://www.justice.gov/opa/pr/us-attorney-announces-federal...
They seem to be using the same font size for both years.
Or by smaller, do you mean that there was a 30% inflation from 2021 to 2022?
Most dollars printed eventually find their way back to the fed through taxation.
- headcount from 150k to 186.5k (!)
- EMEA + APAC largely driving slowdown in growth as both regions were -2% (!), USA + Americas are still at +12%
Feel like this might be a pattern this quarter - declining margins + growth as companies over-extended themselves last year not foreseeing just how bad things are outside of the USA + Americas
Constant currency means excluding impacts of FX.
11% growth (constant currency) vs 41% growth last year is still has huge slowdown in growth.
Alphabet was seeing around 15% YoY revenue growth prior to 2021. Then 2021 hit and the growth rate jumped to 41%. Now with the 6% YoY growth this year, it's evening out to ~22% annualized growth over the last 2 years.
As long as consumers are buying stuff, companies will advertise to them. As long as Google has a captive audience and they can continue to mint keywords for advertisers to bid against, I think this flywheel continues.
Sure HN notices this first, but for sure the "regular people" are not far behind.
Still, there are no good alternatives -- yet. You can bet if Google is the new Altavista, then the new Google is just over the Horizon waiting to steal their ad revenue...
Sundar may think that “more productive” is a technology statement, which would reflect a serious lack of product vision.
He may even think he’s focusing on people despite having exec planning sessions all framed as “technology that lets people do ______”.
I feel like there should be some kind of consumer behavior/overall market beta factor that normalizes results with respect to the extraordinary conditions that have played out over the past few years.
comparing year vs. year over the last few years seems to make no sense to me.
- Alphabet is experience massive decline in revenue growth. (Only 6% YoY growth vs 41% YoY growth in 2021)
- Internal costs are sharply increasing (Only a 25% Operating Margin vs 32% last year). A 7-point swing is massive. To put this into perceptive, outside of tech, most companies only have ~10-point Operating Margin. So this swing of 7 points in margin, for most companies, could be the difference between being profitable vs not.
- Even though they are generating more total revenue than last year (same quarter) - they are considerable less profitable overall ($14B this year in Net Income vs $19B last year same quarter). This is related to the previous bullet.
Alphabets stock is -6% in after hour trading.