121–130 of 136 posts
Still no sign of Waymo in Other Bets revenue, which fell from $450M to $411M. But they're presumably investing more in it, since Other Bets income fell from $-1,226M to $-2,100M, meaning expenditure went up $800M YoY. (Obviously not all of this was Waymo though.)
Earlier quoted context omitted.
No one is losing money on inference these days. Google's vertical integration means that they have some of the lowest inference costs in the industry in any event.
Microsoft recently announced changes to copilot because, apparently, it was losing money on inference.
Google grew revenue 22% YoY and operating income 30%, with growing margins. Search revenue still growing 19%, an acceleration vs YoY growth this time last year. Cloud grew revenue 63%. Cloud income up from $2.2b Q1’25 to $6.6b Q1’26. https://www.reddit.com/r/stocks/comments/1sza7xi/alphabet_be...
Can anyone explain how search revenue is still _growing_ in the age of LLMs?
Right now lots of top tier online resources just become not usable due to amount of ads. It used to be a sign of a 3rd tier website.
Earlier quoted context omitted.
Gemini in search (AI Overview) is likely the most used LLM in the world, and ads can still surface around it. (googler, opinions are my own. I know nothing about this outside of external info)
Is it the most used LLM because people want to use it, or because it literally can't be turned off aside from an obscure search parameter or using a slur in your search
Earlier quoted context omitted.
Can anyone explain how search revenue is still _growing_ in the age of LLMs?
Have you looked at the results for any commercial query, something like [sofa beds] or [hard drives]? It is basically 100% ads. Anything where the user is intending to spend money, they show only ads, and have all the top producers in the world bid against each other for who gets featured, and Google captures essentially all surplus value in the transaction. My wife is an investor, and one of her portfolio areas is p…
1. Google has monopolized the current AdTech stack from all sides. Not only does it dominate the place where most lucrative ads are displayed (search), it dominates the tools used by publishers to sell ads, the tools used by advertisers to buy ads, and the exchange that matches them. And as the AdTech antitrust lawsuit found, they've been pulling some shenanigans in the auctions to pad their margins by eating into from the the publishers' margins.
2. The search UI is simultaneously limited real estate but also easy to stuff with ads, which is why it has been so valuable. (Google also monetizes a chunk of the display ad space across websites, but that is very clearly dead as plummeting traffic numbers show.)
3. The entire serving stack has been crazy hyper-optmized for this model.
However, with agents this whole stack gets bypassed. The conversational UX is very different. A user will not do N searches for a product with M ads on each SERP, resulting in NxM impressions and ~N clicks as they explore the product page and reviews to come to a conclusion.
They will instead have a conversation with an agent over N rounds of back and forth and only the final round will matter somewhat, ideally resulting in a final, very valuable click.
So now the ad impression volume (which is apparently more important than CPC these days?! https://www.marketingdive.com/news/google-parent-shifts-basi...) has gone down by a factor of NxM. Oh, eventually they will start displaying ads at each turn of the conversation, of course. But due to the user doing all the product exploration in the chat itself, it seems highly unlikely they'll click on those, and so those may not be very valuable at all.
Now layer on top of that the fact that LLMs are probably more expensive to serve than search or ads. So there's pressure on the top- as well as bottom-lines.
Furthermore, this could shift ad-selling and buying patterns, so all those shenanigans padding their margins may also vanish. (This will be a problem for Amazon too BTW.)
It is unclear that the value increase in that final click will compensate for that NxM display and margin-padding loss. Concerningly, even if N is 1, M these days is on the order of 10+.
Google will still be a ridiculously lucrative company, but its search + ad revenue could be a fraction of what it is today. That cloud revenue better pick up fast.
Google grew revenue 22% YoY and operating income 30%, with growing margins. Search revenue still growing 19%, an acceleration vs YoY growth this time last year. Cloud grew revenue 63%. Cloud income up from $2.2b Q1’25 to $6.6b Q1’26. https://www.reddit.com/r/stocks/comments/1sza7xi/alphabet_be...
Can anyone explain how search revenue is still _growing_ in the age of LLMs?
You'd be crazy not to be long Google.
Earlier quoted context omitted.
This makes sense from a financial perspective. But Google’s main service became centralized and convenient because it acted as the traffic gateway of the web. The moral question is a different matter. Suppose an electricity utility builds the power grid, and many businesses build their operations around that grid. Then later, the utility uses its privileged position in the grid to directly replace the businesses that…
> Suppose an electricity utility builds the power grid, and many businesses build their operations around that grid. Then later, the utility uses its privileged position in the grid to directly replace the businesses that depended on it. Would that be morally acceptable? This analogy is incorrect. If someone wants to use bing.com, they just have to type b-i-n-g.com. You chose an example with high barrier to entry. So…
A technical barrier and a distribution barrier are not the same thing.
From the way you are arguing, I suspect you may be connected to Google in some way.
To be clear, I do think Google is a good company in many respects.
But let me make my point seriously.
TikTok may be the place for short dopamine-driven content, but lectures and reviews are still mostly on YouTube. And YouTube was strengthened by Google’s broader market power and distribution position.
I think we should look at this not only from the consumer side, but also from the supplier side.
You seem to be treating vendor lock-in too lightly.
You say users can “just” switch. But when there is a dominant router, “just switching” is much harder than it sounds.
Search is a two-sided market. Google controls the overwhelming majority of search traffic. From the supplier’s perspective, saying “just go to Bing or DuckDuckGo” is almost like telling them to shut down their business, because the audience is not there.
I am not denying your point of view. In fact, I partially agree with it. But you are not considering the supplier side at all.
Earlier quoted context omitted.
> Suppose an electricity utility builds the power grid, and many businesses build their operations around that grid. Then later, the utility uses its privileged position in the grid to directly replace the businesses that depended on it. Would that be morally acceptable? This analogy is incorrect. If someone wants to use bing.com, they just have to type b-i-n-g.com. You chose an example with high barrier to entry. So…
People do not usually type a specific alternative into the address bar. They use the search widget on their phone or the default search box in their browser. How much does Google pay Apple every year to maintain that default position? A technical barrier and a distribution barrier are not the same thing. From the way you are arguing, I suspect you may be connected to Google in some way. To be clear, I do think Google…
I dont get thsi argument at all. When I walk into Safeway, Coke products are kept in the front of the store and Pepsi products are at the back of the store. Coke probably paid Safeway a bunch of money for this to happen, and you could argue people will pick up Coke more than Pepsi based on this. How can you argue Coke is "evil" / "bad" / "monopolistic" based on this? It is Safeway's choice who to get the money from. If anything, I'd argue Safeway is being a little naughty here.
> TikTok may be the place for short dopamine-driven content, but lectures and reviews are still mostly on YouTube. And YouTube was strengthened by Google’s broader market power and distribution position.
I disagree. YouTube's position was strengthed by creators who uploaded there by their own free will. YouTube didnt pay anyone to do that. Again, to use an analogy, it'll be like saying most software dont have a Linux variant and always seem to have Mac version. Indepedant, rational actors decide to favor Mac, and for that Apple is bad? What should Apple do here - tell creators that you cant publish on App Store unless you create a Linux / Windows version?
> Search is a two-sided market. Google controls the overwhelming majority of search traffic. From the supplier’s perspective, saying “just go to Bing or DuckDuckGo” is almost like telling them to shut down their business, because the audience is not there.
What do you mean? How is searching for 'new york times' on bing.com or ddg.com bad for nyt? bing, ddg, google are all search engines - and they all surface the same information / sites. People seem to prefer (whether by habit or by preference) to Google. But Google isnt saying "if you are on Google Search, you cant be on Bing or DDG) It isnt exclusive, you know?
Earlier quoted context omitted.
People do not usually type a specific alternative into the address bar. They use the search widget on their phone or the default search box in their browser. How much does Google pay Apple every year to maintain that default position? A technical barrier and a distribution barrier are not the same thing. From the way you are arguing, I suspect you may be connected to Google in some way. To be clear, I do think Google…
> People do not usually type a specific alternative into the address bar. I dont get thsi argument at all. When I walk into Safeway, Coke products are kept in the front of the store and Pepsi products are at the back of the store. Coke probably paid Safeway a bunch of money for this to happen, and you could argue people will pick up Coke more than Pepsi based on this. How can you argue Coke is "evil" / "bad" / "monop…