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It’s time for Alphabet to spin off YouTube?

economist.com

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Re: It’s time for Alphabet to spin off YouTube?

#101

Post by runako »

orra wrote: post #91
rtsil wrote: post #66

Earlier quoted context omitted.

What if it's not an independent service, merely a perk of the actual service? Where do we draw the line? Should Apple be asked to spin off iCloud because email, photos, documents should all be independent services? Note that neither Prime Video nor iCloud are monopolies, which would bring different considerations into the matter.

Prime Video isn't a monopoly, but Amazon clearly has Significant Market Power when it comes to retail. They're anti-competitively vertically bundling Prime Video along with retail delivery.

Their largest competitor is Walmart. Walmart's bundle includes video, fuel discounts, from-store delivery, long-haul delivery. Further, the Walmart.com e-commerce site is subsidized by the Walmart bricks & mortar operation.

Businesses are allowed to do more than one thing. I'm not sure when it became popular to try to strip down businesses to a single SKU each, and it's not obvious to me that consumers (or anyone) benefits from pursuit of that goal.

Re: It’s time for Alphabet to spin off YouTube?

#102

Post by jefftk »

sofixa wrote: post #58
pclmulqdq wrote: post #2

It's time for antitrust to hit Meta, Alphabet, and Amazon. At the very least. Amazon: AWS is one of the most valuable businesses ever created. You don't need the retail arm any more, now that it is enshitting itself. Also spin off the media company, comprising Audible and prime video, to make a Disney competitor. Amazon would absolutely be more valuable broken up. Meta: Meta has always run 3 separate products either…

> Amazon would absolutely be more valuable broken up That is total nonsense, completely irrelevant, and true. Conglomerates being worth less than the sum of all parts is one of the stupidest parts of Wall Street. There is no actual rationale for this besides maybe it being easier to evaluate a company doing only a single thing? Specifically with regards to the examples given - Amazon, Meta, Google - it's the cross-su…

> Conglomerates being worth less than the sum of all parts is one of the stupidest parts of Wall Street. There is no actual rationale for this besides maybe it being easier to evaluate a company doing only a single thing?

One example: some parts of a business need a positive consumer reputation and others don't. When you connect these under the same company you may end up with two business units that are each less valuable than if they were free to take the approach that best suited their business.

For example, an ad company that didn't care much what consumers thought about it would use fingerprinting to personalize ads and it's prevalent in the industry, but Google committed to not doing this. Why? My guess is that a big part was reputation: having an ads division that's tracking users with no opt out is inconsistent with the company-wide policies Google needs to be competitive in consumer markets.

In this case I think the effects are positive, in that the display ads division is closer to what consumers would want than if it were independent, but I think it's pretty likely that spinning DoubleClick back out would increase overall profits.

(I used to work at Google, and here I'm speculating about decisions made several levels above me that I wasn't a part of.)

Re: It’s time for Alphabet to spin off YouTube?

#103

Post by conductr »

crazygringo wrote: post #82

I can't agree. Ultimately, the article argues for spinoff because of 1) focus, 2) more subscription experimentation, and 3) regulators. But there's zero evidence YouTube is a distraction, it's already done lots of experimenation with subscriptions, and YouTube seems like the last of regulators' concerns with Alphabet. I do think it's true there isn't a whole lot of strategic synergy between YouTube and Google or the…

The synergy is that google has active advertisers with payment information on file. They can cross sell ads on any vertical to that customer list. A new company would struggle just to get advertisers to sign up and struggle to get the content and struggle to get the views. This is why google bought YouTube to begin with, it’s a vertical for advertising which is their business.

Re: It’s time for Alphabet to spin off YouTube?

#104

Post by pwinnski »

MichaelZuo wrote: post #88
fisf wrote: post #68

Earlier quoted context omitted.

You are basically making the case for the anti-trust case here. i.e. it is very hard for another company to compete without "free compute".

But it's not like there will be a free competitor in any case? The closest might be peertube but that's nowhere near as reliable. Vimeo is paid. None of the other big companies seem willing to subsidize an online video service to the tune of tens of billions per annum.

Which, again, makes the anti-trust case stronger. The case being: Google leverages one of their businesses (providing compute) to build an anti-competitive moat around another of their businesses (youtube), and it's so effective that they have driven all competitors out of the market.

By nearly any standard, Google's control of YouTube should be a prime anti-trust target.

Re: It’s time for Alphabet to spin off YouTube?

#105

Post by runevault »

mulletbum wrote: post #51
runako wrote: post #41

Earlier quoted context omitted.

> the service cannot compete on it's own merits This is only true if external actors redefine "the service" to be something other than what millions of customers voluntarily purchase (Prime). For example, I subscribe to Prime because I get free/better shipping on goods as well as video. I don't know what % of my subscription fee I would allot to either, but fortunately I don't have to do that.

Not to mention, these other comments are for Disney. However, Disney is propping their business up with lots of other businesses. If you are going to make Amazon less competitive, you can't leave the giant business next to it in a better position. Disney will just buy it then.

Frankly among the not-tech-first companies Disney is the one that should most be targeted. The fact they were allowed to buy LucasFilms and Fox media (minus Fox News and Fox Sports because they already own ABC and ESPN) was so stupid. The year before those purchases the collected movies of those 3 were most of the top movies at the box office.

Re: It’s time for Alphabet to spin off YouTube?

#106

Post by londons_explore »

There are only a few times when a spun off company can be worth more than an integrated one...

1) When the spinoff might have negative value. Eg. has big liabilities. But you don't need to make it fully independent to gain this benefit - it can be a wholly owned subsidiary.

2) When the spinoff can't get clients or suppliers due to the business of the parent company - eg. the renewable energy division of BP might not have much success getting charitable funding from green charities.

3) Where someone else wants to buy the spinoff for more than market value for strategic reasons. Eg. to have its patents, or to shut down a competing business.

I don't think any of these apply in the case of Youtube.

Re: It’s time for Alphabet to spin off YouTube?

#107

Post by recuter »

jl6 wrote: post #7

I always assumed YouTube’s technical foundations were significantly subsidized by the mothership, but I have no data to base that on other than looking at the $29bn/year revenue figure and wondering whether that amount of money would be enough to provision the amount of compute, storage and bandwidth that YouTube needs, plus all other expenses (including revenue sharing with uploaders). Yes, $29bn is a lot of money,…

And yet up until a couple years ago at least Netflix served a higher percentage of web traffic. Don't know about now, maybe that changed.

There is only so many hours in the day and so many eyeballs watching, that is your upper bound. Bandwidth like that is not available to mere mortals, you would have to colocate with a lot of ISPs all over the place. Would take years to setup, not really even a question of money.

In the case of Netflix their content library fits inside one such colocated server, which can (or pretty soon will) do 1tb/s. Hundreds of thousands of streams per box are within reach, especially at YouTube potato resolutions.

In the case of Youtube while the long tail is very very long, I bet the most popular content of the week would fit into a similar sort of server.

So the serving portion at least is an endeavor on the order of magnitude of say 1 billion dollars a year.

No idea how to estimate letting anybody upload unlimited amounts of video of unlimited length and transcoding it into a dozen sizes. I think they did that early on to solidify their moat and it seems like a huge waste.

Re: It’s time for Alphabet to spin off YouTube?

#108

Post by detourdog »

fisf wrote: post #68
kevincox wrote: post #16

Earlier quoted context omitted.

When I worked at Google I definitely noticed that YouTube was great at (ab)using untracked or very cheap resources. They definitely get huge benifits of otherwise idle data centers in sleeping regions. As the regular service traffic died off YouTube would put those idle cores to work transcoding video. It is definitely the case that YouTube gets lots of really cheap compute by being part of Google. But that isn't a b…

You are basically making the case for the anti-trust case here. i.e. it is very hard for another company to compete without "free compute".

I bet an individual with a static IP could make more money self-publishing than using youtube. I see federation and countless other things that compete with youtube. Access to "free" compute time. Any "free" compute time is likely to be transient and nothing to build a business on.

Re: It’s time for Alphabet to spin off YouTube?

#109

Post by WastingMyTime89 »

judge2020 wrote: post #95
fisf wrote: post #68

Earlier quoted context omitted.

You are basically making the case for the anti-trust case here. i.e. it is very hard for another company to compete without "free compute".

No, they're making the case for them being a monopoly. Unless Google is preventing others from purchasing compute or hard drives by buying up all of the supply, they are not performing any anti-competitive actions, which would not make them liable under any anti-trust statutes. I don't think anyone's in doubt YT is a monopoly with how big and widely-used it is. It's just that they continue to survive because of how w…

Preferentially giving YouTube access to ressources is indeed an anti-competitive action. That’s part of the vertical restraint kind.

YT isn’t a monopoly however. It might be dominant depending of how you define the markets but it does have competitors.

Re: It’s time for Alphabet to spin off YouTube?

#110

Post by sclarisse »

fisf wrote: post #68
kevincox wrote: post #16

Earlier quoted context omitted.

When I worked at Google I definitely noticed that YouTube was great at (ab)using untracked or very cheap resources. They definitely get huge benifits of otherwise idle data centers in sleeping regions. As the regular service traffic died off YouTube would put those idle cores to work transcoding video. It is definitely the case that YouTube gets lots of really cheap compute by being part of Google. But that isn't a b…

You are basically making the case for the anti-trust case here. i.e. it is very hard for another company to compete without "free compute".

Eh. Using spare CPU capacity is not really anticompetitive behavior. That’s just an efficient enterprise. Something like Google favoring YouTube in search and suppressing their competitors would be actual anticompetitive behavior.
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