Google Makes So Much Money, It Never Had to Worry About Financial Discipline • Hacker News Board

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#431

Post by ChuckMcM » Sat, Dec 10, 2016, 12:02 AM UTC

tytso wrote: post #401

ihoz wrote: post #262

Earlier quoted context omitted.

I know many people at Google Boston (Cambridge). They are all bored out of their skulls. One guy says how he works 30 hours in a busy week and uses his 20% time to hit the gym. But in another's words: "how can I leave when they pay me so much?"

I work at Google Cambridge, and I'm easily working 50+ hours a week. I work in Technical Infrastructure (on our storage systems in our data centers) and one of my 20% projects was to design and architect the underpinnings of what an Android Product Manager has claimed to be one the most important features of Android N (file based encryption), the open source incarnation of which (ext4 encryption) has turned into a ge…

I just love the dissonance of "I'm easily working 50+ hours a week." and "one of my 20% projects".

When you say it "You'll be working 40 hrs a week and to be successful you'll need to spend an additional 25% of your time coming up with other stuff that helps us." it doesn't sound quite so magical :-)

That said, when I worked there I quickly realized that with no trouble at all I could spend all my waking hours in the office playing with the neat things that are made available to employees. It doesn't feel like overtime when its something you would do in your free time anyway.

The sticky bit is that you don't get profit participation in the financial upside of those extra projects.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#432

Post by ChuckMcM » Sat, Dec 10, 2016, 12:15 AM UTC

yuhong wrote: post #427

ChuckMcM wrote: post #421

Earlier quoted context omitted.

It is so much more nuanced than that. That number is essentially manufactured for the street (and before anyone jumps down my throat about being some sort of conspiracy nut let me explain). Early in Google's life there was an article which asked the question "Is Google's gross margin 100%?" It went on to observe that Google had overhead, staff, facilities, and monthly recurring costs like electricity and phone bills,…

>The key being that all of the knobs that Google has at its disposal will eventually be turned to their maximum point I wonder what this would exactly look like. As a side note, I wonder what would happen if for example an economic collapse happened and Google's ad revenue was significantly reduced.

I see early signs of knobs at the extreme in the news, harder to get projects approved, people being told they can't do 20% projects any more, groups losing people that don't get replaced, web properties that are hard to monetize (I'm looking at you finance.google.com) getting starved.

I would expect that once a quarter there is a meeting which goes like this, "Ok folks our profit margin is going to be 22% and our revenue is $xxx. That leave $yy in expense we have to get rid off or revenue we have to develop. Who wants to go first?" We've seen both efforts on the outside, more adds on search pages, pay to be in the 'Google Shopping' bar, Etc. for revenue enhancement, and cancelling things like Reader, Wallet, Glass, and other projects or ideas that haven't added to the bottom line. You can see the moves in Youtube (the latest being you can't keep a video running in the background tab unless you have "Youtube Red" as an example) to either get profitable or die.

As for cash flow? I can tell you that I was there when the Mortgage Crisis hit and it scared the crap out of them. That crisis killed TechStops[1] and that did way more damage than the financial crisis did.

[1] Techstops were Google's tech help on demand group that, when they were employees, was a really awesome service. When it got switched to a vendor it really lost its utility.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#433

Post by caminante » Sat, Dec 10, 2016, 2:08 AM UTC

sowbug wrote: post #404

caminante wrote: post #134

Earlier quoted context omitted.

> After a while someone realised that a group of engineers were consistently booking shitty travel around the same time, and then travelling first class the rest of the year. How's that different than having an annual travel budget? Sounds like they sacrificed to feast later instead of holding accommodations constant at "above average." I think you did a good job telling the story, but maybe I'm missing how gaming tr…

The difference is that if you know your budget is X, you'll probably try to spend X - epsilon, because that maximizes your personal outcome within the rules. But if you get a credit based on the difference, then you'll have a shared incentive with the budget-maker to spend much less than X. However, then you have the problem that if X is per trip , then there's a perverse incentive to maximize the number of trips (ev…

Giving credits for cost-saving isn't the problem. Companies do that with travel expenses. What you're describing is really the same as giving employees an annual discretionary travel budget.

Here's the problem: It sounds like Google didn't implement financial controls. The employees committed fraudulent transactions by booking travel from outlying years and get credits for use in the current year. That shouldn't have been allowed.

This was unclear in the original post and the commenter graciously clarified.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#434

Post by dang » Sat, Dec 10, 2016, 2:46 AM UTC

MicroBerto wrote: post #424

dang wrote: post #373

Earlier quoted context omitted.

Please don't call names ('you spew') in arguments. If someone is wrong, explain so civilly. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newswelcome.html

How is "you spew" namecalling? I was the one personally attacked in this thread, not the other way around. Just because my comment doesn't fit the Musk Worship narrative doesn't make me wrong. Was someone not killed by a malfunctioning / underprepared Tesla? What am I missing here????

"You spew" is a pejorative. Examples:

https://twitter.com/search?q="you%20spew"

https://www.google.com/webhp#q=site%3Atwitter.com%20%22you%2...

What you're missing is that even though someone was uncivil to you on HN, you needed to remain civil in return. That's the social contract here, and we need it to prevent discourse from degenerating even further.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#435

Post by tytso » Sat, Dec 10, 2016, 3:00 AM UTC

ChuckMcM wrote: post #431

tytso wrote: post #401

Earlier quoted context omitted.

I work at Google Cambridge, and I'm easily working 50+ hours a week. I work in Technical Infrastructure (on our storage systems in our data centers) and one of my 20% projects was to design and architect the underpinnings of what an Android Product Manager has claimed to be one the most important features of Android N (file based encryption), the open source incarnation of which (ext4 encryption) has turned into a ge…

I just love the dissonance of "I'm easily working 50+ hours a week." and "one of my 20% projects". When you say it "You'll be working 40 hrs a week and to be successful you'll need to spend an additional 25% of your time coming up with other stuff that helps us." it doesn't sound quite so magical :-) That said, when I worked there I quickly realized that with no trouble at all I could spend all my waking hours in the…

Sure, but a lot of these things are things I was doing anyway when I was working for MIT and earning a five figure salary. When I moved out to a startup (VA Linux Systems), I more than doubled my salary; and when I went to Google I took a significant step up in compensation over my previous job at IBM --- and yes, I'm still doing the things that I love to do.

So it's not a matter of doing things because it's needed to be successful (although they won't hurt when I'm next up for Promo, I'm sure), it's the fact that I get to help influence the industry. As far as profit participation is concerned, I'm paid plenty enough to be comfortable, and I'm used to the concept of the financial upside coming indirectly from what my open source activities (e.g., ext4 maintainer, being on the program committee of ATC and FAST conferences, etc.) do for my personal brand. Yes, I'm not going to have the money of say, a Peter Thiel or a Larry Ellison. I also don't have to worry about having all of that money turning me into an *sshole, either. :-)

Am I aware that I'm trading off potentially being able to earn even more income in exchange for more security and the freedom to choose what I do (and the fact that I can find choices that help out the open source projects that I care about _and_ which result in benefits to my company is something I consider a feature, and part of the value I can bring to my employer)? Of course. Sure, I could probably earn more by working for a high frequency trading firm. But I'd lose a lot of freedom. More importantly, what working on moving the poles of the US financial system to the right-half plane would do to my soul isn't worth the extra money it might bring in.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#436

Post by MarkMc » Sat, Dec 10, 2016, 3:55 AM UTC

ChuckMcM wrote: post #421

MarkMc wrote: post #406

Earlier quoted context omitted.

Here is Google's net profit margin for past 4 years [1]: 2013: 22.9% 2014: 21.4% 2015: 21.7% 2016 (9 months): 22.0% It doesn't look like profit margins are under strong downward pressure. But a better metric would probably be 'revenue per search query' - I don't have any recent statistics, but if Bing can close that gap it will reduce Google's margins when bidding for search traffic from Apple and Firefox (and maybe…

It is so much more nuanced than that. That number is essentially manufactured for the street (and before anyone jumps down my throat about being some sort of conspiracy nut let me explain). Early in Google's life there was an article which asked the question "Is Google's gross margin 100%?" It went on to observe that Google had overhead, staff, facilities, and monthly recurring costs like electricity and phone bills,…

I agree with your analysis that Google basically sells "this person has just looked for this good or service, now who wants to respond?". But you seem to be ignoring the large, persistent information advantage that Google has over Bing.

Consider 3 scenarios:

1. Person A just searched for "What's the best sports car?".

2. Person B just searched for "What's the best sports car?". He's a 45-year old man who works for an insurance company in New York. He has a wife and three kids, but he recently started seeing a 28-year-old psychology grad student in Chicago twice a month. Two years ago he bought a $6,000 watch for his wife's birthday.

3. Person C just searched for "What's the best sports car?". He's a 23-year old man who lives with his parents and does not have a wife or girlfriend. He works for Walmart and has just been promoted to manager. Nine months ago his friend bought a Subaru WRX.

Now consider what types of advertisers will bid for each search. And perhaps more importantly, what types of ads and landing pages will be offered for each search. Clearly, having detailed personal information is a significant advantage when deciding which ads to show to a user. Google has that advantage and doesn't look like giving it up any time soon.

However, I can think of two pieces of evidence against this argument: (1) Bing was able to outbid Google to be the default search engine on Firefox; (2) Outbrain and Taboola regularly outbid Google AdSense to advertise on Time, Forbes, Bloomberg, etc. In both of these cases I would have expected Google to prevail, so perhaps Google's personal-information advantage is not as strong as I think. Or perhaps Google isn't taking full advantage it.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#437

Post by ChuckMcM » Sat, Dec 10, 2016, 4:18 AM UTC

MarkMc wrote: post #436

ChuckMcM wrote: post #421

Earlier quoted context omitted.

It is so much more nuanced than that. That number is essentially manufactured for the street (and before anyone jumps down my throat about being some sort of conspiracy nut let me explain). Early in Google's life there was an article which asked the question "Is Google's gross margin 100%?" It went on to observe that Google had overhead, staff, facilities, and monthly recurring costs like electricity and phone bills,…

I agree with your analysis that Google basically sells "this person has just looked for this good or service, now who wants to respond?". But you seem to be ignoring the large, persistent information advantage that Google has over Bing. Consider 3 scenarios: 1. Person A just searched for "What's the best sports car?". 2. Person B just searched for "What's the best sports car?". He's a 45-year old man who works for an…

I don't disagree, but consider that person B is a 45 year old man working for an insurance company he is probably running Windows 10, and Microsoft knows quite a bit about him.

My point is that in my opinion you are over valuing Google's user information advantage. Most purchasing and buying habit information is collected using web page based analytics to an advertiser rather than coming from Google directly.

When Blekko was operating at a consumer search engine we got a great inside look at what tools advertisers have at their disposal to "qualify" their ad bids. If you send the query's source IP to the ad network when you request an ad they match that up with all sorts of cookies and beacons that have fired off that IP address. None of that comes from Google, it comes from all the trackers that are running all over the Internet.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#438

Post by ianderf » Sat, Dec 10, 2016, 4:29 AM UTC

blub wrote: post #395

ianderf wrote: post #379

Earlier quoted context omitted.

Even if you know that, you don't really have an option to stop it. You can buy a smartphone with either Android or iOS - and both are spying on the user heavily.

Apple is not even in the same spyware league as Google. Don't try to muddy the waters. But true, Google can't be stopped as long as software developers and companies continue to sell out for ad money.

"Apple is not even in the same spyware league as Google." - Why? Seriously asking.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#439

Post by s_m_t » Sat, Dec 10, 2016, 4:40 AM UTC

iamatworknow wrote: post #410

robryan wrote: post #271

Earlier quoted context omitted.

The user review system for games is the best I know of and arguably more useful in deciding what to buy than critic reviews. Steam is also constantly promoting new games to you and making suggestions based on what you currently play. There is also the social aspect in that you can see who is playing what, leading to new discoveries.

Why does it seem like every review I read is basically a joke by someone with 1500 hours in a game saying simply "it's pretty good" or conversely someone with 2 hours in a game that writes an entire novel about how let down they were when they barely scratched the surface? I will admit that at least having the verifiable length of time a reviewer played a game helps, but I don't find the reviews themselves to be all…

Once you've played a ton of video games you can easily judge most games by their game play aspects within 2 hours.

The exception would be with highly competitive multiplayer games, and even then you can quickly get a very good idea.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#440

Post by king_kerr » Sat, Dec 10, 2016, 4:51 AM UTC

Periodic wrote: post #11

So many companies try to emulate how Google works. There are multiple books, hundreds or thousands of articles. People speculate on the perks, the review structure, the hierarchy, the autonomy. However, when other companies try to imitate Google they always fail because they're missing a crucial piece: Billions of dollars in ad revenue Google doesn't work the way it does to be successful. It works that way because it…

Excellent point that puts this in its proper perspective.