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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?

#131

Post by ghaff »

kevincox wrote: post #16
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,…

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…

Presumably Google could spin out some of those unused resources with spot pricing but certainly it's easier with their own highly instrumented workloads.

So I'm skeptical that anything is actually "free" and, at a minimum, I'm sure has internal transfer pricing that has YouTube paying a reasonable value for the resources it uses. And I would furthermore assume that Alphabet management is satisfied with what YouTube's income statement looks like given those transfer payments.

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

#132

Post by jimbokun »

madeofpalk wrote: post #38
runako wrote: post #30

Earlier quoted context omitted.

These hypothetical splits show the perils of having outsiders (including regulators) make decisions like these. Just some quick notes: > You don't need the retail arm any more [...] spin off the media company, comprising Audible and prime video, to make a Disney competitor The whole point of the conglomerate model they use (following Costco) is that the membership fee grants consumers access to a bevy of services. Th…

> The services may not work a la carte If the service cannot compete on it's own merits, and is being propped up by an unrelated business, how competetive is it actually?

It's not so much being propped up, as at achieving better efficiencies. Leveraging the larger organizations compute resources and ads technology makes Youtube more valuable than a stand alone company would be, for example.

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

#133

Post by judge2020 »

tshaddox wrote: post #112
judge2020 wrote: post #95

Earlier quoted context omitted.

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…

> 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. Would the massive subsidization of YouTube’s costs not count? There’s nothing physically preventing a competitor from buying storage and compute, but it’s pretty clear that it would be extremely…

> but it’s pretty clear that it would be extremely difficult to compete with YouTube if every user has to pay the actual unit costs to upload, convert, and play videos.

That's on the user side, though. Like AWS and Azure, chances are GCP/Google's internal hardware division bills internal teams similarly to external customers (especially as Sundar continues to demand cost cuts). Of course users themselves can't go and make their own website and experience the same economies of scale that only big companies can achieve, but if competitors come in (like ByteDance) there's nothing stopping them from stealing marketshare from YouTube if they invest in some colocated servers in key markets.

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

#134

Post by conductr »

H8crilA wrote: post #113
conductr wrote: post #103

Earlier quoted context omitted.

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.

That's on the revenue front and is indeed important. On the product front: some search and generally data processing technologies are similar or even identical in Search an YouTube (YT Search, but definitely not only that).

Yes, I’m sure that’s so but not quite sure of how that implies anticompetitiveness.

If a YT competitor built a search feature that they thought was so good they spun up a search engine product, does that make them anticompetitive?

Every competitor has to implement their own solutions to these problems. Or, don’t? Search isn’t a barrier to entry. You could launch a video service without a search feature. If you can leverage something from your existing assets, that’s not anticompetitive. It’s like a lawn mowing service starting a Christmas light hanging service because they already possess the truck and most of the tools and labor resources. It’s the definition of being competitive. They may be able to offer lower prices to consumers because they get to use their assets during middle of winter when grass isn’t growing.

Or, and this is key to the bundled conglomerate argument, offer a service that wouldn’t otherwise be feasible (because the cost would be higher than what customers would pay.) In this case, bundling of the service is a net positive to consumers.

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

#135

Post by waboremo »

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".

Anti-trust wouldn't apply here because there is very little stopping someone from creating a video hosting company and doing fine. Plenty of alternatives exist as well here, Tiktok, Vimeo, Twitch, Patreon all to varying degrees of scale.

Where I would try to nail Google/Youtube for with anti-trust is the merging of Music and TV/Movies into Youtube as well as the reliance of Google ads on Youtube. Both of those are incredibly annoying to deal with as a competitor and give Google the ability to corner the market on multiple fronts. Roku has highlighted this themselves, Google leveraging Youtube to make brand deals that other competitors cannot.

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

#136

Post by kevincox »

ghaff wrote: post #131
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…

Presumably Google could spin out some of those unused resources with spot pricing but certainly it's easier with their own highly instrumented workloads. So I'm skeptical that anything is actually "free" and, at a minimum, I'm sure has internal transfer pricing that has YouTube paying a reasonable value for the resources it uses. And I would furthermore assume that Alphabet management is satisfied with what YouTube's…

For sure. It isn't free, they are just making good use of otherwise unused capacity. Much like spot instances can be dramatically cheaper they are using the cheapest available resources. Plus they are happy with being preempted at any time or their work being slowed so they are working with an even tighter contract then GCP Spot Instances which have minimum runtimes and preemption notices.

It is hard to decide if this is unfair or not. It is true that Google doesn't offer this exact ability to external customers but most customers wouldn't want this type of very unreliable infrastructure. If there was a market Google or Amazon would likely offer it (basically a super-spot which has less guarantees)

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

#137

Post by pclmulqdq »

psychlops wrote: post #78
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…

Globalization is at odds with national level anti-trust. The past has shown that international companies supported by their governments would eat away at the smaller US companies.

I think this is the big reason that the US hasn't taken action against these companies. They view them as strategic, and want to keep a very friendly relationship.

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

#138

Post by cma »

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".

Antitrust isn't supposed to tamp down on those kind of efficiencies. Google offers the idle time on the market as well with spot instances, so they pay an opportunity cost.

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

#139

Post by ghaff »

tshaddox wrote: post #124
madeofpalk wrote: post #38

Earlier quoted context omitted.

> The services may not work a la carte If the service cannot compete on it's own merits, and is being propped up by an unrelated business, how competetive is it actually?

I’m a long time paid subscriber to both Amazon Prime and Costco, and I can’t say I’ve ever thought of the services as particularly similar. Maybe that’s because I rarely use Costco to buy things online (I’ve only ordered a few online-only items and one travel package), which is the primary way I use Prime. Prime certainly feels more like a bundle of unrelated things, with the streaming service, and cloud music/photos…

No one uses Kindle ebooks?

People may not read books as much as they used to and many still read physical books but lots of people use ebooks.

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