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Alphabet Third Quarter 2021 Results [pdf]

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71–80 of 145 posts

Re: Alphabet Third Quarter 2021 Results [pdf]

#71

Earlier quoted context omitted.

The dirty secret of tech is that markets matter more than effort or smarts. If you have product/market fit and a decent technological lead in a market that is large and growing, you will do better than a company that does not have PMF or a good market, regardless of how hard you work. (This explains so much about Oracle.) Social media mentions are probably a better sign of how well you'll do than full parking lots. I…

markets and moats matter. Anyone can get revenue selling tomatoes, the problem with tomato farming is that there is no moat, you will not be able to sell at a price much higher than the next farmer down the street. If there were 100 good search engines the price for advertising would be 90% lower

> If there were 100 good search engines the price for advertising would be 90% lower

If there were 100 good search engines for end users, but opinions of different users on quality were highly correlated, the traffic would be very disproportionately on the one that was perceived as even very slightly better.

And they’d make the bulk of the advertising dollars.

And they’d have the bulk of the money to throw at improvements.

And the next year, unless some competitor got more access to outside investment to make up for that, the gap would be bigger, they’d have even more of the search audience, and even more of the advertising money, etc.

Re: Alphabet Third Quarter 2021 Results [pdf]

#72
post #68
post #48

Once more, I don't understand how advertising revenue keeps growing. Once people install ad blockers, they don't typically remove them. And ad-blockers keep growing. So who is actually seeing these ads? How can those numbers be going up ? I understand, intellectually, that not everyone thinks like me. But I don't fundamentally understand why people allow ads on their devices when they can prevent it. Then again, I do…

They can adjust Quality Score parameters or bid floors to increase the CPC and/or make ads look more like organic results to increase the ad CTR. Both will increase their earnings per pageview. More auction participants mean higher bids. Removing match types such as phrase, while automatically shifting phrase to broad modified helps increase their fill rate & number of participants per auction. Eliminating second pri…

>adjust Quality Score parameters or bid floors to increase the CPC and/or make ads look more like organic results to increase the ad CTR.

That's not really how auctions work. Raising the price floor would just exclude ads with CPCs below the floor from paying, and since they're already getting paid for the maximum CPC bid at the time anyways they would just make less revenue.

If they messed with quality score discounts in an exploitative way, the entire billion-dollar SEO industry watching it would notice and cry foul.

Re: Alphabet Third Quarter 2021 Results [pdf]

#73
post #2

> In January 2021, we completed an assessment of the useful lives of our servers and network equipment and adjusted the estimated useful life of our servers from three years to four years Does anyone know what the observation was here that made this possible? Have Google's internal workloads not grown in size as quickly as they thought, or is this a "Moore's law is slowing down" thing?

No, computers typically have a service life of 5 years, but depreciating them faster gives you more loss to to write down against your income. What you are seeing though is the trick they used to make 'net income' pop. Let's say they had a million servers and a server costs $5K each. When depreciated at 3 years that is $1.6 billion dollars a year of depreciation. But you stretch that out to 4 years and now its only $…

> Since depreciation is subtracted from revenue you just "bumped" up your revenue by ...

No, you bumped your net income. Revenue is unaffected by the depreciation change. Revenue is up 61%.

Also, nobody would be fooled by an accounting trick like this. Analysts routinely compute EBITA, earnings before interest, taxes, and depreciation, exactly for this reason - filtering out the more purely financial/virtual expenses that are less informative for understanding the core business.

They likely did it because you're required to report things like depreciation in a way that reflects reality. There could be tax implications for instance, since you can count depreciation expenses against your taxable earnings (though often companies maintain separate depreciation accounting for financial reporting vs taxes due to the different rules for each).

Re: Alphabet Third Quarter 2021 Results [pdf]

#74
post #63
post #48

Once more, I don't understand how advertising revenue keeps growing. Once people install ad blockers, they don't typically remove them. And ad-blockers keep growing. So who is actually seeing these ads? How can those numbers be going up ? I understand, intellectually, that not everyone thinks like me. But I don't fundamentally understand why people allow ads on their devices when they can prevent it. Then again, I do…

> Once people install ad blockers, they don't typically remove them. And ad-blockers keep growing > don't fundamentally understand why people allow ads on their devices when they can prevent it The market share of iOS also has increased a bit, and iOS does not allow ad blocking very easily. You have to configure some sorta DNS-based ad blocking, which is harder than the traditional desktop firefox/chrome adblockers t…

>The market share of iOS also has increased a bit, and iOS does not allow ad blocking very easily. You have to configure some sorta DNS-based ad blocking, which is harder than the traditional desktop firefox/chrome adblockers to install.

Are you considering installing a content blocker not easy? Or not ad blocking? Firefox Focus is free and a few taps away from the app store.

Seems easier to me than installing ublock origin on desktops. Which people can easily be misled into installing ublock, or adblocker, or any the other scammy ones that do not really block ads or do something else nefarious. It is harder for a non technical user to get fooled by an iOS content blocker.

Re: Alphabet Third Quarter 2021 Results [pdf]

#75

Earlier quoted context omitted.

During the Google Plus days? Not so much.

And indeed FB did eat their lunch in social.

But not “not only in social mindshare, but in ad revenue”.

Social is just (fom a business perspective) a tool for getting an audience. The thing both Google and Facebook are selling is advertisement placement. Winning in one area of free “services” to build an audience to deliver ads to but not winning in actually selling ads…isn’t winning.

Re: Alphabet Third Quarter 2021 Results [pdf]

#76
post #43

Earlier quoted context omitted.

I don't know why people always mention density. Google isn't constrained on floor space. If they need another 100 acres of Iowa for their servers to stand on, they'll just buy that for a comparative $0 cost. Density is an issue for people who are still renting from Equinix.

the substation has a limit, so do all of the power distribution systems.

Sure but that's the opposite trend from density, is it not? A dual 64-core EPYC Rome machine - and we know they are using these for web search, from published research papers - has 400W of CPU TDP alone, which is a more than double the per-host TDP of a Westmere EP (as an example of a retired platform). So if anything there is more empty space in the racks in 2021 than there would have been in 2011, based on the design power load of existing buildings.

Re: Alphabet Third Quarter 2021 Results [pdf]

#77
post #48

Once more, I don't understand how advertising revenue keeps growing. Once people install ad blockers, they don't typically remove them. And ad-blockers keep growing. So who is actually seeing these ads? How can those numbers be going up ? I understand, intellectually, that not everyone thinks like me. But I don't fundamentally understand why people allow ads on their devices when they can prevent it. Then again, I do…

Please mind that google started to show search results in a fashion that if search "A company" then the first link is the ad pointing to the "A company" website and only next is the same exact link to that company website. This is pure cheating and I'm amazed how they can both: laugh at advertisers face and keep it legal.

Re: Alphabet Third Quarter 2021 Results [pdf]

#78
post #2

> In January 2021, we completed an assessment of the useful lives of our servers and network equipment and adjusted the estimated useful life of our servers from three years to four years Does anyone know what the observation was here that made this possible? Have Google's internal workloads not grown in size as quickly as they thought, or is this a "Moore's law is slowing down" thing?

This was announced back in July:

https://www.convergedigest.com/2021/07/google-extends-deprec...

Re: Alphabet Third Quarter 2021 Results [pdf]

#79
post #2

> In January 2021, we completed an assessment of the useful lives of our servers and network equipment and adjusted the estimated useful life of our servers from three years to four years Does anyone know what the observation was here that made this possible? Have Google's internal workloads not grown in size as quickly as they thought, or is this a "Moore's law is slowing down" thing?

No, computers typically have a service life of 5 years, but depreciating them faster gives you more loss to to write down against your income. What you are seeing though is the trick they used to make 'net income' pop. Let's say they had a million servers and a server costs $5K each. When depreciated at 3 years that is $1.6 billion dollars a year of depreciation. But you stretch that out to 4 years and now its only $…

Looking at it from a naive point of view, could it just be an actual change in what they estimate to be the useful life of their servers? Accounting shenanigans for a (relatively) small bump in revenue seems not really worthwhile.
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