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Google Profits Surge on Strong Ad Demand

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Re: Google Profits Surge on Strong Ad Demand

#131

Post by soared »

vonnik wrote: post #52
connoredel wrote: post #46

Earlier quoted context omitted.

That's not how it works at all. It's a market: there is a limited supply of impressions/clicks, and it is _buyers_ who decide the price. Buyers are rational -- I like to take that charitable view at least -- and are bidding less than the value to their businesses of those clicks. CPCs are actually down on average. If that's true, then it must be simply inventory growth: mobile is providing ever more interaction point…

Market prices are determined by the intersection of supply and demand, so it is not just the buyers who choose. Google has some say over the supply. They may increase or decrease the supply based on behavior they sense more broadly in search. It's amazing to see on HN that some of the times I am most right, I am also most downvoted. Life lessons...

Well Google is the intermediary. They can (and undoubtedly do) directly affect supply, demand, and price. They can purchase ad space from a publisher for $0.45, mark it up x, and sell it. They can slow demand by temporarily (even for seconds at a time) by increasing cpc. They can lower supply by lower bids. They could in theory even pre-sell ads when supply is in excess.

Re: Google Profits Surge on Strong Ad Demand

#132

Post by dgacmu »

aurelianito wrote: post #81
adventured wrote: post #58

Earlier quoted context omitted.

I never said or implied such a thing, you're exaggerating. What I said, is that it's the exception for a tech juggernaut to 'get eaten for lunch.' And that is indeed a fact. Oracle, Microsoft, Intel, HP, Dell, Cisco, Google, Amazon, IBM, Texas Instruments, SAP, EMC, Qualcomm, Samsung, Apple Where's the lunch eating? Where's the wasteland of destruction of tech titans? Most of those are now old companies, some are ver…

DEC, Silicon Graphics, Sun, Gateway just as I remember now.

Cray. Radio shack/Tandy. KSR. MasPar. Thinking Machines. Sinclair.

It's easy to accidentally have survivorship bias.

Re: Google Profits Surge on Strong Ad Demand

#133

Post by euyyn »

lucb1e wrote: post #111
euyyn wrote: post #55

Earlier quoted context omitted.

He refers to tech startups.

I don't like to think advertising is necessary for every tech startup. I certainly don't want to be associated with the industry that rubs annoying stuff in your face as much as they can get away with.

The comment you replied to wasn't talking of the advertising industry in particular, but of the tech industry in general. The "big players" in his comment were the big companies, and "us" were the startups.

Re: Google Profits Surge on Strong Ad Demand

#134

Post by sho_hn »

aurelianito wrote: post #124
nl wrote: post #100

Earlier quoted context omitted.

DEC and Sun are both in the list above (as HP and Oracle). This isn't just a technical point - I suppose it isn't out of the question for a mega-merger/buyout of something like Facebook and Microsoft could occur.

Nokia too. Or you will also claim it to be a part of Microsoft? All the companies I listed do not exist now. Some were bought. They were bought because they failed, like Yahoo! Are you going to claim that Yahoo! still exists as part of Verizon? They did not merge. They were bought for peanuts.

> All the companies I listed do not exist now.

Nokia has 114000 employees (almost twice of 2014 after buying Alcatel-Lucent: Nokia owns Bell Labs now) and $20b+ of revenue.

It's amusing how people in the HN bubble tend to think Nokia was bought by MS and closed.

Re: Google Profits Surge on Strong Ad Demand

#135

Post by nl »

aurelianito wrote: post #124
nl wrote: post #100

Earlier quoted context omitted.

DEC and Sun are both in the list above (as HP and Oracle). This isn't just a technical point - I suppose it isn't out of the question for a mega-merger/buyout of something like Facebook and Microsoft could occur.

Nokia too. Or you will also claim it to be a part of Microsoft? All the companies I listed do not exist now. Some were bought. They were bought because they failed, like Yahoo! Are you going to claim that Yahoo! still exists as part of Verizon? They did not merge. They were bought for peanuts.

They did not merge. They were bought for peanuts.

You are misremembering.

"Digital was acquired in June 1998 by Compaq, in what was at that time the largest merger in the history of the computer industry. At the time, Compaq was focused on the enterprise market and had recently purchased several other large vendors. Digital was a major player overseas where Compaq had less presence. However, Compaq had little idea what to do with its acquisitions, and soon found itself in financial difficulty of its own. The company subsequently merged with Hewlett-Packard (HP) in May 2002. As of 2007 some of Digital's product lines were still produced under the HP name."[1]

The Sun purchase wasn't as big, true. But they had multiple bidders, and sold for $5.6B:

"In late 2008, Sun was approached by IBM to discuss a possible merger.[4] At about the same time, Sun also began discussions with another company, widely rumored but unconfirmed to be Hewlett Packard, about a potential acquisition. By March 2009, talks had stalled between Sun and both IBM and the other potential suitor.

On April 20, 2009, Sun and Oracle Corporation announced that they had entered into a definitive agreement under which Oracle would acquire Sun for $9.50 a share in cash. Net of Sun's cash and debt, this amounted to a $5.6 billion offer from Oracle"[2]

These are both excellent of examples of companies that one might argue "failed" in the market place, but were still valuable years after their peak in the market. That is exactly what adventured is saying.

[1] https://en.wikipedia.org/wiki/Digital_Equipment_Corporation

[2] https://en.wikipedia.org/wiki/Sun_acquisition_by_Oracle

Re: Google Profits Surge on Strong Ad Demand

#136

Post by toast0 »

mathattack wrote: post #78
twblalock wrote: post #67

Earlier quoted context omitted.

Look how long Yahoo stuck around. These companies have massive inertia.

It stuck around for a long time, but it's stock price has been crushed.

Yahoo's stock price hasn't been crushed, unless you're comparing to 2000; in the last 10 years (because it's conveniently available), it's up 33% vs s&p500 up 66%. Not good, but hardly crushed like say Blucora (formerly Infospace), down 53% over the same time period.

Re: Google Profits Surge on Strong Ad Demand

#137

Post by corv »

paulpauper wrote: post #29

Amazon, Facebook , Google - three stocks to rule the world. They cannot do any wrong, and I don't mean that sarcastically. Buying these stocks is like investing in the companies that are building the matrix, but it's real life. It's just nuts..even Microsoft and Cisco in the 90's..the growth was finite, but there is no limit to Facebook, Google and Amazon. Every quarter is a crusher..over and over, year after year. J…

I highly doubt none of these three will be disturbed in the near future.

For one, ad blocking is on the rise.

Re: Google Profits Surge on Strong Ad Demand

#139

Post by dredmorbius »

vasaulys wrote: post #2

Its so bizarre to me. You'd think there would be a finite appetite for advertising, but apparently not.

About $500 billion globally, with ~$100 billion online, last I'd checked. Based on a global world product (GWP) of $75 trillion. Or 1.5% of the global total.

If that were to be split 3 ways between Google, Facebook, and Everyone Else, Google might get $167 billion in revenue, or (at 20x PE) $3.3 trillion market cap.

Re: Google Profits Surge on Strong Ad Demand

#140

Post by dredmorbius »

MarkMc wrote: post #103

As a Google shareholder this is great news, but now I'm starting to feel that the market is underestimating the chance that someone simply builds a better search engine. For example, here are 3 search queries I recently performed where I found Google's results lacking: 1. What is the best Thai restaurant within 10 kilometres? 2. What companies have a market cap greater than Microsoft? 3. Does Android track my locatio…

My understanding is that this is precisely what services such as Google Now (or Apple Siri, or Amazon Echo, or Facebook's Faceless Voice) are addressing. True conversational interfaces, ask question, get answer.

(Also true integrated global persistant vocal surveillance, but that's another matter.)

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