> People could trivially switch their search engine to Bing or Yahoo, but they don't.
Well those are obviously worse products.
> If ads are so overpriced, how big is your short position on google?
I hate hearing this stupid, stupid line.
Most companies are run by neanderthals with more money than brains. Companies burn money on advertising because why not? Making your product better is hard and takes time, advertising is the easiest thing you can do. Does it work? Not really, no, but you get extra business for as close to zero effort you can possibly get. Hit a wall? Just advertise more!
> Ads rendered by an intelligent, personalized system will be OOM more efficient, negating most of the "overvalue".
This is exactly what people said about personalized ads. "No you don't understand! It's not like a billboard!"
And that's true, but consumers are not fucking braindead, and there's also the laws of economics. If I have 50 bucks, I'm not spending 20 fucking dollars on your dumbass paint, no matter how much you advertise it. And that's not a me thing, that's a consumer thing. You can spend 1 quadrillion dollars advertising ferraris and guess what - you will STILL quickly saturate that market and hit a hard ceiling. Because consumer's can't afford it.
And that's not even touching on the fact that most of the metrics around advertisements are just obviously bullshit. How many human eyeballs are actually on ads? Much, much less than everyone thinks.
Yes, sure, we can build highly personalized ads. Whatever. But at the end of the day, consumers still have the exact same amount of disposable income as before. We have created Z E R O value, what we have done is consolidated it.
Hmm, what happens when markets consolidate too much? Well, I guess that would mean advertising becomes completely worthless, wouldn't it? What a conundrum! It's a good thing our markets haven't been consolidating for the past 70 years...