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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?

#211

Post by anigbrowl »

scarface_74 wrote: post #163
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".

That's not how anti-trust works. Are you really saying that no company should be able to create a new product based on resources it already has? Why stop at compute? Why not make it an "anti-trust" case that Apple leverages its same operating system and chip design across multiple devices? Or Amazon uses its same logistics network to deliver more than just books?

This is big business pretending to be small to distract attention from market dominance, and pretending to be creative to distract attention from a strategy of acquisition rather than origination.

Your argument is valid, but scale matters. Think of a game of Monopoly; you can usually tell who's going to win well before the game concludes, and you can guess which players will lose well before that.

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

#212

Post by scarface_74 »

lotsofpulp wrote: post #202
scarface_74 wrote: post #176

Earlier quoted context omitted.

That's simple Managerial Accounting 101. Every major company operates the same way. When Disney+ "buys" the right to stream the latest Marvel movie from Marvel Studios, the company as a whole has to back out the revenue so not to count it twice. But still show Disney+'s profit.

Why would they have to “back out” revenue”? Revenue for one department has to be an expense for another if they are buying and selling from each other, and that would cancel out in the company wide financials. Disney+ buying from or selling to Marvel would not show up as profit or loss for Disney.

Let's take a simpler example. Apple Retail Stores and Apple corporate. For awhile Apple Store profits were broken out separately.

Making up numbers:

It costs Apple $800 to make a MacBook. It "sells" the MacBook to Apple Retail for $900 wholesale. Apple corporate now has revenue of $900 from the Mac it sold.

Apple Retail sells the same Mac to the end user for $1000. Apple Retail now has revenue of $1000.

Apple Corporate claims revenue of $900

Apple Retail claims revenue of $1000.

Apple claims a revenue of $1900. But it has to back out $900 of revenue so it doesn't double count it.

Apple wants to show that Apple Retail is profitable.

I used Apple instead of Disney in the example because it is much simpler to show one item being transferred from Apple to Apple retail than it is to show a group of movies being transferred to Disney and Disney selling a subscription.

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

#213

Post by insane_dreamer »

jpadkins wrote: post #174
jfengel wrote: post #171

Earlier quoted context omitted.

Is Alphabet lacking cash? Unless a spun-off YouTube were to issue more stock, they don't really care what investors would like. If Alphabet needs money for YouTube investment they can issue more Alphabet stock, and investors can take that deal or not. But I doubt that Alphabet's challenges involve cash flow. It might well be better for the world if Alphabet weren't a conglomerate. But it seems unlikely that it's bett…

Alphabet cash on hand for 2022 was $113.762B, a 18.54% decline from 2021.

_Only_ $113B? Ouch.

/s

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

#214

Post by scarface_74 »

WastingMyTime89 wrote: post #206
scarface_74 wrote: post #165

Earlier quoted context omitted.

That's not in any sense of the word how anti-trust works. That's just like saying that car manufacturers can't use idle capacity to help start a new line of vehicles just because a new car manufacturer couldn't create a new car line.

No, it’s not comparable in any ways. Car manufacturers sell cars. That’s their main business. Here we have Google using its dominant position in another market to prop up another activity through an advantage. That’s most definitely fall under anti-competitive law at least in Europe (I don’t care about the US. The modern interpretation of American antitrust laws is a complete joke).

Apple's main business was selling computers. Should they not have been allowed to branch out to sell phones or before that music players? Netflix had a dominant business in shipping DVDs to customers. Should they have not branched out to streaming?

It's silly to say that companies should never be allowed to branch out to other businesses.

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

#215

Post by wintermutestwin »

JohnFen wrote: post #194
wintermutestwin wrote: post #119

Earlier quoted context omitted.

Cue the people implying that blocking YT's ads is a form of theft. I'd gladly pay for ad-free YT, mostly to send the message that I will never ever go back to watching ads. The problem is that google is already stealing my data. Where is the stalker-free option? Of course, I'd never trust google anyway...

> I'd gladly pay for ad-free YT Then why don't you? That's been an option for years.

>The problem is that google is already stealing my data.

My data is worth much more to me than the cost of a YT sub.

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

#216

Post by Retric »

scarface_74 wrote: post #204
Retric wrote: post #189

Earlier quoted context omitted.

Microsoft lost. They avoided being broken up, but it’s absolutely clear they had broken the law. It’s not IE bundling alone that was at issue but Microsoft making it harder to install competitors and limiting access to some API’s to IE. They where legally required to change this and did in fact do so. https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor... And the critical thing you don’t seem to understand i…

Microsoft did not in fact have to change anything about bundling the browser with Windows . And just in case you haven't noticed, Intel isn't exactly doing great against AMD these days and doesn't even have a monopoly on chips with the x86 instruction set. Do you think its also illegal for the cable companies that originally lost money on cable infrastructure and to subsidize the cable infrastructure to sell subscrip…

I will say it again Microsoft broke the law and lost. The case was more complicated than a simple sound bite which is why you’re confused.

People get away with breaking the law constantly, you can do 57 mph in a 55 every day for 60 years and never get a ticket. Shipping Windows with a copy of IE was like doing 57, nominally illegal but not something they would have gotten in much trouble over. But like a speeder they pushed even further and got slapped down over it.

Intel has had an X86 monopoly at various points. Doing something when they aren’t a monopoly can be legal when doing the exact same thing as a monopoly is illegal. Whether they currently qualify as a monopoly is debatable, but you don’t need a 100% market share to be considered a monopoly. AMD having a 20% market share is right at the edge of where Intel would be considered a monopoly but Intel has a great deal of market power.

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

#217

Post by scarface_74 »

anigbrowl wrote: post #211
scarface_74 wrote: post #163

Earlier quoted context omitted.

That's not how anti-trust works. Are you really saying that no company should be able to create a new product based on resources it already has? Why stop at compute? Why not make it an "anti-trust" case that Apple leverages its same operating system and chip design across multiple devices? Or Amazon uses its same logistics network to deliver more than just books?

This is big business pretending to be small to distract attention from market dominance, and pretending to be creative to distract attention from a strategy of acquisition rather than origination. Your argument is valid, but scale matters. Think of a game of Monopoly ; you can usually tell who's going to win well before the game concludes, and you can guess which players will lose well before that.

And if Google hadn't acquired YouTube it wouldn't exist today. It would have either been sued out of existence or the infrastructure costs wouldn't be sustainable.

But let's not pretend that the little guy wants to go public. If they do, they are naive. Out of all of the companies, that YC has invested in, maybe 5 have actually gone public. Every startup knows the game is to get acquired.

The fact is that some things need scale to succeed. OpenAI for instance was never going to be able to afford the compute it needed without being subsidized by MS.

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

#218

Post by echelon »

91bananas wrote: post #200
echelon wrote: post #173

Earlier quoted context omitted.

How does Adobe assure this? Or any tool maker? Email has problems, yet the good and productive uses vastly outweigh the bad actors. The vast majority of systems humans use have benefit, otherwise they would be unwound by governments (eg. crypto). People want to be creative more than they want to be destructive. The destroyers will be moderated, just as they are in every system. I want a world where every kid can make…

Most of the rest of us don't.

"ought to be enough for anybody"

If things stay the same as ever, this life will have been boring. I'm not cut out for another twenty years of smartphone incrementalism.

Fuck the status quo. I don't live for "same". Everything in the world as it exists isn't enough.

The future could be the most exciting thing if we dream and build it.

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

#219

Post by scarface_74 »

Retric wrote: post #216
scarface_74 wrote: post #204

Earlier quoted context omitted.

Microsoft did not in fact have to change anything about bundling the browser with Windows . And just in case you haven't noticed, Intel isn't exactly doing great against AMD these days and doesn't even have a monopoly on chips with the x86 instruction set. Do you think its also illegal for the cable companies that originally lost money on cable infrastructure and to subsidize the cable infrastructure to sell subscrip…

I will say it again Microsoft broke the law and lost. The case was more complicated than a simple sound bite which is why you’re confused. People get away with breaking the law constantly, you can do 57 mph in a 55 every day for 60 years and never get a ticket. Shipping Windows with a copy of IE was like doing 57, nominally illegal but not something they would have gotten in much trouble over. But like a speeder they…

This was your original thesis:

> Microsoft for example could have spent unlimited money on IE and the justice department wouldn’t have cared as long as it was treated as a business investment. However, leveraging the ability to change windows was seen as problematic.

There is no confusion. Nothing came out of the DOJ case with respect to MS bundling IE.

Intel has never had a monopoly when it came to x86. IBM insisted from day one that were two suppliers for x86 before it even agreed to use the first chip.

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

#220

Post by luckylion »

nindalf wrote: post #115

I respect the Economist’s business columnist (Schumpeter) and tech columnist (Babbage) but this seems to be a case of Schumpeter writing about tech. Leaving aside HN loving the idea of Big Tech being weakened by becoming Relatively Small Tech, I don’t see how this is in Alphabet’s or YouTube’s interest. The article assumes that such a divorce would be simple and it would allow YouTube to focus on taking on TikTok. It…

> Instead of focusing on high leverage activity like improving product, they would spend their time figuring out how to split datacenters, ads products, internal tooling etc.

You mean like they haven't for the past 5 years?

I have no opinion on splitting them up besides "why?", but "Youtube wouldn't innovate on their product any more" is a weird position: Youtube hasn't innovated since it was created, they've only copied from other products (streaming, shorts, music, superchats, channel members), and did so in a mediocre way that's just disappointing.

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