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Google profits plummet 27 percent in Q3 2022 earnings report

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Re: Google profits plummet 27 percent in Q3 2022 earnings report

#11

Post by adam_arthur »

Yet their headcount grew by double digits.

Many tech companies living in fantasy land, having gotten used to free money and strong organic growth essentially guaranteed from secular tailwinds. At a certain scale, and level of competition (more and more social/advertising platforms becoming popular), these companies become more cyclical rather than guaranteed growth bets.

Google is a great company that will surely be worth more down the line, but the whole hire as fast as possible and pay increasingly high comp is going to have to come in line with the new reality.

You can't expand headcount and employment costs faster than your revenue/profit growth and expect it to end well

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#12

Post by time_to_smile »

bwb wrote: post #2

This seems like a bit of a non-story in some ways. Their revenue was up slightly YOY, and after that crazy huge quarter and the economic slow down this seems like a non-deal.

It's hilarious how often nearly this exact quote appears at the top comment in any bad news that shows up on the front page.

Sure this isn't the end of the world but clearly the market doesn't believe this is a "non-deal".

We're also absolutely seeing a broader shift in the tech space, and traditionally companies like Google have been more immune to market changes than others.

But of course the current mantra of HN is "this is fine", it's part of a broader trend of denialism in the community that major shifts, towards things being worse, in many parts of our lives are happening.

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#13

Post by cmrdporcupine »

echelon wrote: post #5

Google doesn't seem anti-fragile to me. They have always seemed every bit as vulnerable as Meta, but with a few extra (yet weak) plates of armor due to an unfair ecosystem they've created to funnel you into Adsense. An ecosystem that many legislators and the DOJ think violates antitrust, and that the EU and other countries are already ruling against. If Apple begins blocking their trackers (see Google's recent worldw…

Google's insane hiring and investment into a gazillion non-ads product areas over the last 10 years tells you that they know this as well.

They've been shoveling their ad revenues desperately into a furnace of "everything but ads", throwing ideas against numerous walls to see what sticks, and copying other company's product roadmaps. Almost none of it has worked out. They're still dependent on that ad revenue firehose for 90-ish percent of their profits.

When that firehose slows, the only way to maintain things will be to cut costs. So in a way I'm glad I got out of working there before that era began. "Fun" times there have been slowing for years, but it's going to get serious, I think.

Not as bad as Facebook, though.

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#14

Post by P_I_Staker »

pevey wrote: post #10
sillysaurusx wrote: post #7

Meta / Facebook is also down to $129 from a high of $387. That’s a staggering loss. FB is still in a strong position (to put it mildly), but it’s interesting to see this play out.

Facebook is strategically no different than myspace a decade or two ago. When the cool kids go somewhere else, it becomes clear that the platform itself was nothing special. Edit: I was downvoted, but I stand by what I wrote. Google has Android and (for now) superior search results. Netflix has content (including their own, not just other people's). Apple has their devices, which are killing it right now. These compa…

I don't know if this is really true. That shift has occurred to some extent. On the other hand, it seems to me that all the most sociable people I know are still on Facebook.

There definitely are a lot of people that interact with Facebook less, which is obviously huge. I'm not sure these other social media sites will eat up Facebooks core business.

It seems like Facebook could continue to struggle to grow, but these sites seem to fill different roles. I could definitely see Facebook becoming little more than a calendar/messaging system.

Maybe it will collapse eventually, but what we saw with MySpace was pretty extreme, total, and sudden. It happened to Digg too, but wasn't this around the same time as the MySpace stuff was happening? I don't see much reason to think Reddit is going anywhere, either.

We'll see, I wouldn't be shocked either way.

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#15

Post by CGamesPlay »

bearjaws wrote: post #3

I got an email from YouTube about how "we are creating more value" and I had a gut feeling their quarter was going to be trash. "We are creating value" is code word for "we're increasing the price of the service, and showing you a bunch of stuff you don't use". Guess the ad-sense money button broke and now they have to try and milk other services.

My YouTube premium subscription cost was just doubled. Hopefully they retain more than 50% of their customers!

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#16

Post by nikanj »

cmrdporcupine wrote: post #13
echelon wrote: post #5

Google doesn't seem anti-fragile to me. They have always seemed every bit as vulnerable as Meta, but with a few extra (yet weak) plates of armor due to an unfair ecosystem they've created to funnel you into Adsense. An ecosystem that many legislators and the DOJ think violates antitrust, and that the EU and other countries are already ruling against. If Apple begins blocking their trackers (see Google's recent worldw…

Google's insane hiring and investment into a gazillion non-ads product areas over the last 10 years tells you that they know this as well. They've been shoveling their ad revenues desperately into a furnace of "everything but ads", throwing ideas against numerous walls to see what sticks, and copying other company's product roadmaps. Almost none of it has worked out. They're still dependent on that ad revenue firehos…

Too bad they now have a reputation of killing every new product. Nobody wants to invest time into using their new shiny, because people assume it’ll be gone in a year or two

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#17

Post by ajross »

bwb wrote: post #2

This seems like a bit of a non-story in some ways. Their revenue was up slightly YOY, and after that crazy huge quarter and the economic slow down this seems like a non-deal.

Pretty much. The level of "a-ha! this confirms all my priors!" logic in these threads is just deafening.

Look everyone: economies are cyclic. We had a boom. Now we're in a downturn. It's happened before, many times. It will happen again. Nothing happening today is remotely as scary as what we saw in 2008, frankly isn't nearly as disruptive as the 2001 crash.

Google will be fine. The tech industry will be fine. Buy the dip, if you're into that sort of thing.

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#18

Post by robofanatic »

pevey wrote: post #10
sillysaurusx wrote: post #7

Meta / Facebook is also down to $129 from a high of $387. That’s a staggering loss. FB is still in a strong position (to put it mildly), but it’s interesting to see this play out.

Facebook is strategically no different than myspace a decade or two ago. When the cool kids go somewhere else, it becomes clear that the platform itself was nothing special. Edit: I was downvoted, but I stand by what I wrote. Google has Android and (for now) superior search results. Netflix has content (including their own, not just other people's). Apple has their devices, which are killing it right now. These compa…

> What do they actually have other than fickle network effects

They can acquire other companies, basically thats how they have survived for a longtime.

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#19

Post by P_I_Staker »

asadlionpk wrote: post #8
echelon wrote: post #5

Google doesn't seem anti-fragile to me. They have always seemed every bit as vulnerable as Meta, but with a few extra (yet weak) plates of armor due to an unfair ecosystem they've created to funnel you into Adsense. An ecosystem that many legislators and the DOJ think violates antitrust, and that the EU and other countries are already ruling against. If Apple begins blocking their trackers (see Google's recent worldw…

They can surely do that but Google search does provide value. Even my mother noticed poor results when her search changed to some random bing-powered one. Also, Google has Android ie. largest OS in terms of user-base.

Yeah, I still have DDG as primary on a few devices, and I really need to change it. It doesn't do a fraction of the stuff I need... pretty much worthless to me, though I know I'm not being very fair.

I think bing is better, but google still actually dominates search with a great product, compared to their competitors.

Re: Google profits plummet 27 percent in Q3 2022 earnings report

#20

Post by taylodl »

bwb wrote: post #2

This seems like a bit of a non-story in some ways. Their revenue was up slightly YOY, and after that crazy huge quarter and the economic slow down this seems like a non-deal.

Wall St doesn't tend to see a 27% drop in profitability as a non-story. The 6% YoY growth was probably expected, but that's a dramatic rise in expenses.
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