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Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

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Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#161

Post by meritt »

tma-1 wrote: post #11

Long-term, I am not very bullish on Google/Alphabet. More than 90% of their profits come online advertising, something that can be easily blocked for life with a simple browser extension/plugin. Some worrying figures[1]: * US ad blocking grew by 48% to reach 45 million active users in 12 months up to June 2015. * Ad blocking grew by 41% globally in the last 12 months. * US ad blocking grew by 48% to reach 45 million…

You understand the online advertising encompasses vastly more than the standard IAB Ad Units your plugins block, right? Those barely scratch the surface of the behemoth that lies beneath. There's a reason the vast majority of display ads are so shitty these days: it's because only the bottom of the barrel still utilize them.

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#162

Post by bryanrasmussen »

maxxxxx wrote: post #113
CydeWeys wrote: post #90

Earlier quoted context omitted.

Alphabet is the second largest publicly traded company in the world ... if that's not business success, what is? I think in these kinds of conversations we sometimes lose a little perspective.

Sorry, my post was not complete. No doubt they are doing great with their ad business. But they seem to struggle with making money from any of the other things they do. And to justify their valuation at some point they have make massive amounts of profit. Much more than they do now. So it seems to me that some of the smartest guys doing the coolest tech in the world is not sufficient to making money.

0 to 60 is easier to do than 60 to 120.

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#163

Post by simula67 »

adventured wrote: post #61
tommoor wrote: post #56

Earlier quoted context omitted.

They seem to be doing a pretty good job of diversifying? The profits haven't caught up yet, granted, but this is a company with many of the smartest people in the world working on future game-changing tech and sinking a ton of money into research. Still bullish here :)

They are doing a poor job of diversifying. Those side businesses are producing a small amount of revenue. It would be one thing if the profits hadn't caught up, the real problem is there isn't much in the way of sales to begin with. I see no example business of theirs that will get them even moderately diversified off of online advertising in the next five years. And I'm not speaking of technology Alphabet is messing…

Cloud profits are not much ( for AWS around $687M per quarter [1]) compared to ad ( around $7B per quarter [2]). Google has many businesses that has the potential to generate a lot of money like

a) licensing technology to car manufacturers for self-driving cars

b) Manufacturing and selling hardware ( like Chromebooks, OnHub, Chromecasts etc )

c) Google Apps, GCE, Google Drive etc

d) Google checkout/wallet payment processing

e) Online publishing with Google Play, Music, Youtube etc.

If you look through Google's list of products[3], I am sure you will be able to find many more potential high profit products. But they are terrible at turning them into viable businesses.

[1] http://www.theregister.co.uk/2016/01/28/amazons_numbers_for_...

[2] http://www.wsj.com/articles/alphabet-reports-rising-profits-...

[3] https://en.wikipedia.org/wiki/List_of_Google_products

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#164

Post by anonred »

WWKong wrote: post #147
ChristianBundy wrote: post #129

Earlier quoted context omitted.

Yep.

Just tried a google search with adblock enabled. Still getting ads on top of search results. Chrome on OSX.

Use uBlock Origin. AdBlock allows "acceptable ads" through by default, which include Google SERP ads.

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#165

Post by alaskamiller »

simula67 wrote: post #163
adventured wrote: post #61

Earlier quoted context omitted.

They are doing a poor job of diversifying. Those side businesses are producing a small amount of revenue. It would be one thing if the profits hadn't caught up, the real problem is there isn't much in the way of sales to begin with. I see no example business of theirs that will get them even moderately diversified off of online advertising in the next five years. And I'm not speaking of technology Alphabet is messing…

Cloud profits are not much ( for AWS around $687M per quarter [1]) compared to ad ( around $7B per quarter [2]). Google has many businesses that has the potential to generate a lot of money like a) licensing technology to car manufacturers for self-driving cars b) Manufacturing and selling hardware ( like Chromebooks, OnHub, Chromecasts etc ) c) Google Apps, GCE, Google Drive etc d) Google checkout/wallet payment pro…

a) Until self driving car technology commoditizes and car manufacturers catches up, buys a Chinese copy cat, or rolls their own solution

b) Low margins

c) Thin margins

d) Lots of competition

e) Maybe

Nothing beats the fat profits of auctioning off ad space to advertisers.

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#166

Post by yarou »

f_allwein wrote: post #98
adventured wrote: post #61

Earlier quoted context omitted.

They are doing a poor job of diversifying. Those side businesses are producing a small amount of revenue. It would be one thing if the profits hadn't caught up, the real problem is there isn't much in the way of sales to begin with. I see no example business of theirs that will get them even moderately diversified off of online advertising in the next five years. And I'm not speaking of technology Alphabet is messing…

Self driving cars: imagine you could just tap a button on your phone and a car came along to take you to your destination - you would not need to own a car anymore and instead pay a monthly fee to Alphabet (or whoever). The fee will be even lower if you agree to watch ads during the ride. ;-) But the big opportunity is that they could offer you a car-as-a-service for much less than the current cost of a car. Today's…

Google is not the only player in the self-driving car market (or soon to be market), though.

There's Tesla, GM (with the Cruise acquisition)...heck even @geohot's startup comma.ai is also tackling the same challenges.

I highly doubt that will be enough to replace the market leader position they have with ads. And believe me, ads are going to die out quicker than a coked out wannabe actor in LA.

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#167

Post by SpaceX_Tech »

rhino369 wrote: post #29
tma-1 wrote: post #11

Long-term, I am not very bullish on Google/Alphabet. More than 90% of their profits come online advertising, something that can be easily blocked for life with a simple browser extension/plugin. Some worrying figures[1]: * US ad blocking grew by 48% to reach 45 million active users in 12 months up to June 2015. * Ad blocking grew by 41% globally in the last 12 months. * US ad blocking grew by 48% to reach 45 million…

>More than 90% of their profits come online advertising, something that can be easily blocked for life with a simple browser extension/plugin. If I were Tim Cook, I'd be at least a little tempted to update iOS and OSX to include adblocking on by default.

Why? Do Apple and Google really have that adversarial a relationship? It seems like a small subset of their respective fans are the only ones that actually want a "war" between the two.

Apple is the most profitable company in the world and consistently takes almost all of the profit in the smartphone industry. They also make a large portion of the profits in the PC world despite their relatively meager market share. Does Apple really want to expand into the sub $200, or even $100, smartphone market? Unless they do, I don't even really see Google/Android as their competitor.

I know it can be short sighted to base things on personal anecdotes, but while I don't use an iPhone myself, almost all of my friends do and they extensively use Google products ranging from Gmail, Maps, Photos and search.

Apple seems to have the best of both worlds in the current situation. They dominate the high end profitable hardware market and their users still get to benefit from Google products if they so choose. I'm not convinced that Apple would be better off if Google disappeared. Replicating all those services will be expensive.

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#169

Post by randomname2 »

losty wrote: post #12
randomname2 wrote: post #6

How did they miss earnings, after buying back $2.3B of stock in Q1?

The two are unrelated. They could spend all their cash on buybacks and the earnings would be the same.

By earnings I meant EPS

Re: Alphabet slides 5% after missing earnings expectations on revenue of $20.3B

#170

Post by sidko »

magicalist wrote: post #16
tma-1 wrote: post #11

Long-term, I am not very bullish on Google/Alphabet. More than 90% of their profits come online advertising, something that can be easily blocked for life with a simple browser extension/plugin. Some worrying figures[1]: * US ad blocking grew by 48% to reach 45 million active users in 12 months up to June 2015. * Ad blocking grew by 41% globally in the last 12 months. * US ad blocking grew by 48% to reach 45 million…

> More than 90% of their profits come online advertising actually, it looks like this may be the first quarter where their non-advertising revenue was over 10% of their total revenue. $2,071 out of $20,091 (in millions). Growing 24% YoY isn't too shabby, either.

Because search tends to have a significantly higher margin than Google's other offerings (say Cloud), even if non-advertising revenue reaches 10% of total revenue, the non-advertising profit is below 10%
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