I would have expected them to wait with ads until OpenAI starts first and users switch to Gemini. Google is probably the player that could afford to wait the longest with this and increase their market share that way.
back
5 comments
Actually I believe Google is the one caught between a rock and a hard place here because their stock will reprice once the market realizes how much their position has weakened re: search ads.
They commanded an absurd premium on ads by virtue of being monopolistic leaders of search. They don't have a better product anymore, only a scale/distribution advantage.
They seem to have been actively making search worse for at least a decade. No surprise they made it worse, that's [seemingly] what they were trying to do.
They presumably were doing it to increase "engagement". More time spent getting infuriated with their worsening search meant more time seeing their ads.
They deserve to go under.
Meanwhile 1 minute unskippable ads on 30s YouTube videos, pop-ups on mobile that cover the video when you close an ad. I hope the UK TV ombudsman grows some balls and starts applying the law on advertising-to-tv-programming ratio. It needs to be applied when programs have ads in them too.
No need to presume: https://www.wheresyoured.at/the-men-who-killed-google/
Wow. Disgusting. The decline of the west in a nutshell.
I have a hard time believing the stock price is based on anything other than vibes. It's up 125% from a year ago!
Given how nowadays the payoff of a stock seems to just be from selling it later rather than having any direct correlation to the companies finances, it's all just a Ponzi scheme based on vibes.
When was the payoff of a stock not from selling it later?
> When was the payoff of a stock not from selling it later?
This is such a funny comment, historically you bought stocks to extract profits, ie dividends. Now you make money from houses and stocks by value appreciation instead of rent and dividends, you can see how that leads to very different behaviours and how that is not very stable compared to buying based on rent and dividends.
Yeah, I'm kind of in shock that anyone would think this is the normal way things always worked. I'm not that old yet, I was born in the 90s!
100%. This is the only part that I find surprising/confusing. Surely whoever blinks first incurs a massive reputational hit with the public (who don't think about this deeply enough to see that it was always inevitable), so why do that if you don't have to?
Perhaps the bright side from Google's POV is that it means that they can be the first to start wooing advertisers to their platform. First-mover advantage there might outweigh reputational damage with the public, especially if OpenAI follows suit with ads in 6 months.
OpenAI starts from excellent UX and needs to prove that they can monetize all those empty pixels. They will no doubt succeed.
Google starts from horrid UX where every advertiseable pixel has been squeezed dry. Only way to go is down.
You're confounding your subjective personal experience with the whole. Google can eat the cake and have it. They already are profitable, they already have scale, they already have market penetration, Google is already installed in 72% of mobile devices, they have cost efficiency due to TPUs, they probably have the best data, at least for serving ads. OpenAI has no chance in outcompeting Google, not in ad-based revenue.
Importantly: OpenAI doesn't need to outcompete Google, it just needs to show it can bleed.
As to the rest of Google's dominant position, it's an advantage for sure, but every leading vendor whose products turned to shit went the way of the dodo one way or another.
And it's important to mention that this includes GAds, not just the loss leader (Search). They have been so good at squeezing advertisers dry that ROI is barely there in many categories.
Who do you think will bleed when they race to enshitify their products? The company where users have lower expecations or the one where they have higher?
Both, but the cat is out of the box with LLMs and Google no longer monopolizes the firehose of consumer purchasing intent even if OpenAI disappears tomorrow. Someone else will come up. I can ask a local LLM that I download for free what's a good lawnmower and it will tell me.
Google is no longer in control and therefore I believe it won't be able to command the crazy premiums it used to squeeze out of advertisers.
The idea that users will switch because a platform has ads has never played out in the past. The average user just doesn’t care.
Plenty of iPhone users are on Brave Browser because it blocks ads on Youtube. When you type in a search query in the address bar, it defaults to Brave Search. Don't underestimate the power of defaults.
There is a boiling point for user tolerance when it comes to ads. Google has been pushing that needle deep into the red for years now.
No meaningful amount of iPhone users use Brave.
Most platforms have a lot of cost and friction to moving. LLMs are all basically the same thing.
The average user appears to care enough to go out of their way to use browsers and extensions and such that block ads, to the point that Google has spent enormous amount of time and money breaking those tools. I think that’s definitely something to consider.
Anecdotally, the number of people who have asked me about VPNs over the last 12 to 18 months has skyrocketed. I probably get a message a month from people of all backgrounds.
> The average user appears to care enough to go out of their way to use browsers and extensions and such that block ads
The average user isn't going out of their way to use ad block, at least globally. Last estimates I remember are still around only 30% of internet users using an ad blocker unfortunately. Ad blocker adoption is heavily skewed toward techies.
It's an even lower amount of people on mobile, where the 'average user' spends the majority of their time.
30% of the general population is a staggering number for basically anything voluntary. I don’t know how you can possibly trivialize that number.
If you can get 30% of the population to boycott anything it’s not only significant but forces a response out of the group on the other side. You’re talking almost 1 in 3 people. Those are literally historic numbers.
Do you have any idea how much companies spend to increase their conversions by single digits?
Ok but using adblock isn’t switching platforms. It doesn’t inconvenience the user at all, and there are no negative network effects.
> Anecdotally, the number of people who have asked me about VPNs over the last 12 to 18 months has skyrocketed. I probably get a message a month from people of all backgrounds.
That's probably more to do with the increasing popularity of China-style national firewalls/tracking (sorry, "age verification") than ads.
Negative. They all want to block ads and protect their identity insofar as they can. Most of them don’t even realize the age verification stuff is going on. My friends that do know about that already have enough technical literacy that they don’t need to be asking me these questions
They could afford to wait, but... profits.
Also, they have to start experimenting now to get the formula right for AI ads.
It may be a push from advertisers who want access to this format. Google Search competes for their money against the competition.