Their strategy seems to be working. They have a massively profitable business and are the 4th largest company in the world.
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That "look the line goes up so we must be doing good" is what caught Kodak. No one ever deserves success, and companies that stop focusing on being good will get caught slipping by more focused competitors
Tell that to the AAA studios that ignored Stadia based on Google's fame.
It is uniquely moronic that someone will get up on HN to criticize an organization that all but literally prints money. $2400 net profit per second. It's not like they are decelerating or even coasting, either: their income doubled last year, up 500% in 4 years. All those guys must be just dumb as rocks! Totally average overrated engineering org!
Monopoly is a helluva drug. I'd argue that almost no one consciously chooses to use a Google product anymore, it's just seen as the default.
I don't believe that but if you do that contradicts the meme scattered around this thread that Google just can't figure out how to operate a business. Either they are inept or they are the omnipresent default choice of billions of people with monopoly power over multiple large marketplaces. But it can't be both.
Yes, they are an incredibly successful cash cow, and I expect them to make great profits for many years.
But they like to act like they aren’t at the terminal stage of development, and it causes confusion and customer upset and layoffs.
The UAE has a much higher GDP per capita than Canada, Germany, or Taiwan. Obviously they need to learn from the UAE how to innovate.
Ads are Google's oil.
That's a really unhelpful analogy actually.
Oil happens to be under UAEs ground, whereas Google has to work and compete for its ads business (vs Facebook, Amazon, others.)
Also, UAE and Venezuela both have oil but one is doing much better than the other. How you exploit your assets (oil or historical position in the ads business) matters a lot.
Wildly offtopic, but not all oil is the same. The oil in Venezuela is tar sands[1] so is expensive to extract. In fact the marginal cost of an additional barrel in Venezuela ($20) is 3x that of UAE ($7), and that's not considering the other issues involved[2]. It is then heavy oil which means it has more bituminous, long hydrocarbon chains with more sulphur so it produces a cheaper grade of product and requires more processing.
Then there is the fact that their oil company PdVSA has been under US sanctions which can't help much[3].
[1] https://www.gem.wiki/Venezuela_Tar_Sands
[2] https://knoema.com/infographics/vyronoe/cost-of-oil-producti...
Your second and third paragraphs contradict.
Nope.
The 2nd paragraph shows why your analogy between ad revenue and oil revenue is flawed.
The third paragraph shows that even sticking with the flawed analogy, how you exploit the asset matters.
When I reach the ends of your comments, I can't tell where we disagree.
Outstanding question is is it because of or despite of.
Despite. Most of their revenue still comes from their original product that launched 24 years ago and I think only the search engine and Youtube are profitable at all.
I don't believe youtube is profitable.
I can't find any source that claims this, and a few sources I could find say that it's a loss leader or that it's "roughly break-even".
The ads are successful. They have a few successful vehicles for serving ads. I can't think of anything they started in the last 10 years that has turned out to be successful and it's not like they haven't tried.
What seems to be working then? Does Aramco making absurd amount of money means anything?
It's working if profit is the only thing you care about.
Profitability is the one objective measure we can use to tell whether a company (or even people) are generating value.
Everything else is subjective and generally leads to decay.
Disagree. Profitability is a trailing indicator. That objective measure would say to cut all R&D.
And there are plenty of objective measures: gross margin, EBITDA, ROA, ROE, lots more. And those are just financial measures! Installed base, CLV, NPS, there are many many objective measures.
If you assume markets are roughly efficient then eliminating all R&D would cause stock prices to tank (assuming R&D is important to the long-term success of the business). I think many people on HN are biased against business concerns (as opposed to technology ones) and wrongly think they could run a business better than they really could.
Profitability does not imply that any value is being generated beyond the profit, in particular when you factor in all the externalities. Conversely, generating value also doesn’t imply that the enterprise will be profitable. The correlation is rather limited. The art is finding a way to both generate actual value and also be profitable.