Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

adweek.com

Post reply on HN
Print view View original

61–70 of 71 posts

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#61

Post by surgical_fire »

xdertz wrote: post #50
dependsontheq wrote: post #17

There are only two successful ad business forms in the digital world, attention or intent. Meta is built on attention and Google and others like amazon are built on intent. Everything else is optimizing the targetting data in some kind of behavioral way to get better intent data or to reach the right users. I have no idea where something like Chatgpt stands on that axis, it has actually very little attention (in hour…

LLMs are great for product research, as in "I want to buy X, what brands are there and what are the pros/cons and what do users report". Lots of potential to game the results there. If that is enough to sustain the business is another question.

They are only great right now because, unlike web search, results are not yet sufficiently gamed and monetized.

There was a time, in an age long gone, when a cursory web search was great for product research too.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#62

Post by jcfrei »

4ggr0 wrote: post #51
jcfrei wrote: post #30

Earlier quoted context omitted.

There's a very low chance of OpenAI doing an IPO this year: https://polymarket.com/event/openai-ipo-by . So the assumption that they "have to do an IPO" already seems questionable. The rest of the analysis also feels pretty hand-wavy. I'm not saying OpenAI is in a strong financial position, but this article doesn't make a solid enough case for why it's supposedly in such dire straits.

are we genuinely using prediction gambling as sources now?

If you find a more informed and up-to-date source than a market where people wagered close to $1M on I'm all ears.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#63

Post by watwut »

netdevphoenix wrote: post #44
lelanthran wrote: post #35

Earlier quoted context omitted.

> How would that be possible? In the past I used Google maybe 10 times a day with a short query. From which Google had to guess my intent. Now I babble with Gemini all day about everything. And Gemini can ask questions what exactly I mean. Why wouldn't Alphabet be able to generate more revenue from this than from search? When you used google 10x a day, you saw, at a minimum, 20 ads/day. How many ads are you seeing wh…

> When you used google 10x a day, you saw, at a minimum, 20 ads/day That's assuming a user with no ad-blocker which is an ever diminishing number of users

We are talking about income from ads. It comes from people who see ads.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#64

Post by ethbr1 »

JumpCrisscross wrote: post #46
m4tthumphrey wrote: post #43

Earlier quoted context omitted.

When you use Google you are generally actively looking for something. When you use Facebook you get ads for things you aren't looking for.

I get that from the product perspective. I'm just not seeing it from the ad side. Attention is a prerequisite to serving an ad. Correctly predicting intent is how you maximise its value.

Parent is presumably making the case (and I'm assuming this extends to their respective ad pricing models) that it's revenue equivalent but profitable either way.

Either you have intent but little attention (Google et al.) and so can charge a decent amount.

Or you have lots of attention but little intent (Facebook et al.) and so can charge a decent amount.

You can't charge a decent amount if you have little intent and little attention.

OpenAI presumably has intent, but hasn't done all the Google-esque adtech sausage making to expose that to ad space buyers.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#65

Post by watwut »

adventured wrote: post #22
zpeti wrote: post #15

Earlier quoted context omitted.

Because writing a headline with 90% miss in it will get more clicks than actually thinking through business strategy and realistic projections.

The same kind of speculation questioned whether Facebook would ever have a significant business. Before that, the same was asked about Google's business. If GPT can maintain or grow usage, the ad dollars will be there given the enormous scale. There is a hundred billion dollars plus worth of advertising waiting in the LLM space. It would be surprising if Facebook doesn't contract for example, losing ground to LLMs on…

Facebook was in financial loss until it got really serious about pushing ads and outrage. People who speculated that Facebook is not earning much on ads while Facebook was not earning much on ads were correct. Same with Googles business.

And also, very relatedly, both companies enshittified their products great deal in the process. Google search used to be better for average user, Facebook used to be better for average user.

Genimi can start pushing ads everywhere, can start using dark patterns to better manipulate us and one they will. They will start earning more money at that point.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#66

Post by fragmede »

wonnage wrote: post #42
adventured wrote: post #22

Earlier quoted context omitted.

The same kind of speculation questioned whether Facebook would ever have a significant business. Before that, the same was asked about Google's business. If GPT can maintain or grow usage, the ad dollars will be there given the enormous scale. There is a hundred billion dollars plus worth of advertising waiting in the LLM space. It would be surprising if Facebook doesn't contract for example, losing ground to LLMs on…

WhatsApp and Messenger have billions of users but don’t make much ad revenue. I’m sure there exists a way to show ads in ChatGPT that will be figured out eventually but so far nobody’s figured out how to monetize chat as a medium Also it’s basically free for Google to show you a sponsored result but embedding one in a ChatGPT response actually costs money (assuming they’re part of the generated response). Lastly I wi…

> WhatsApp and Messenger have billions of users but don’t make much ad revenue.

Not directly, but I bet that connection graph is worth millions. Same with the Giphy keyboard purchase. There's a whole unseen economy of data being valuable for reasons that aren't widely discussed.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#67

Post by thg »

ralph84 wrote: post #21
thg wrote: post #12

Earlier quoted context omitted.

Will Locket wrote about it last month: https://www.planetearthandbeyond.co/p/openai-is-in-a-far-wor... tldr is: They either get a successful IPO to stave off bankruptcy for a couple more months, or they're going to be bankrupt by the beginning of next year.

Or they stay private and raise more capital. Until they have a failed round people predicting bankruptcy are getting way ahead of how this would actually play out. Some of us are old enough to remember the "Amazon can never make a profit and will go bankrupt" predictions of 25 years ago.

The early years Amazon wasn't profitable by choice. They could have stopped that at any time and even did demonstrate it by having a single quarter with $1 profit or some such.

Anthropic and OpenAI have no choice but to go public if they want to avoid bankruptcy. Venture capital firms are struggling to raise more capital, the bond market is so saturated that the borrowing costs are getting too high and big tech is also at the limit of how much they can invest, all while AI companies' costs are going through the roof. Retail investors is the last market they haven't tapped into and to do that, they have to go public. There's just no way around it.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#70

Post by dependsontheq »

ethbr1 wrote: post #64
JumpCrisscross wrote: post #46

Earlier quoted context omitted.

I get that from the product perspective. I'm just not seeing it from the ad side. Attention is a prerequisite to serving an ad. Correctly predicting intent is how you maximise its value.

Parent is presumably making the case (and I'm assuming this extends to their respective ad pricing models) that it's revenue equivalent but profitable either way. Either you have intent but little attention (Google et al.) and so can charge a decent amount. Or you have lots of attention but little intent (Facebook et al.) and so can charge a decent amount. You can't charge a decent amount if you have little intent an…

Yes it's basically very little but very valuable attention with a clear current intent of buying.

Let's say a search term like "apartment for sale in Dallas", I think 15 years ago one of the highest grossing search keywords was something like "asbestos cancer lawyer".

And Meta has incredible amounts of behavioral data but is usually not that close to the thing I want to do right in this moment, they closed that gap.

Open AI has a very good psychological profile, very little current intent and very little attention, but this might change.

Post reply on HN