I thought that this earnings announcement would be the first one where we'd see some impact from competitive knowledge engines, e.g. Perplexity, You.com, ChatGPT + Bing, etc., but Google still grew search $6B/15%.
This is impressive both because it's hard to keep such a big business growing at that rate and because essentially everyone in my social circle has moved on from going to Google first for information. I guess our demographic is not predictive of the larger market.
I think that most of the traffic being stolen away is going to be for low value searches. I (and probably almost everyone else) use Google when I already know what I want, ie I’m trying to get to a company’s website to buy a particular thing, but don’t know their url name.
I’m not going to use an LLM to shop for car insurance or look for hotels.
Ok, but if you’re a well off 40 something mom trying to buy your daughter tickets to a Taylor Swift concert, what would you do? I’m willing to bet that the proportion of people using Perplexity to those using Google to search for concert tickets this past quarter was infinitesimal. Or those shopping for new cars. Or airline tickets. Or furniture. Or lawyers. Or health care. I can go on.
>I’m not going to use an LLM to shop for car insurance or look for hotels.
As I understand it, this is a great use-case for AI agents (a-la Custom GPT) and I wouldn't be surprised if the tech for that matures over the next year.
I guess I could imagine how they might be helpful in initial research - but no way I'm letting some LLM book a hotel that might not exist or get me car insurance from StratesFrarm Unsurance.
I'm not clear how this is different from scammers targeting humans? If anything, I'd expect it to be easier to set up the LLM agent to have secure/cryptographical validation of the providers, to prevent against the sorts of traps that humans fall into.
In the simplest case, we could just have trusted authorities provide lists of verified booking partners, same as e.g. Google Flights does now.
The whole agent idea is questionable anyway. Sites are are already optimized to require the absolute minimum effort for conversion and most of the interesting aggregator sites already exist and are similarly optimized. Who's going to want a clunky natural language interface that breaks half the time?
I would.
I don't know what you're referring to as "absolute minimum", but when I book a flight I'm typically taken through a flow of about 10 pages, each trying to convince me to buy another set of extras. I would love an agent whom I could tell to not buy any extras and just get the basic plane tickets for me in one click, or if it fails to do so, to try again with another partner.
That would be the first step of rollout. The next step would be to ask you in ways that make it hard for you to say no. An LLM agent isn't going to stop companies from bad behavior/dark patterns, it's going to make them more effective at deploying dark patterns to segments of the market.
I think only competition and/or regulation helps push down the allure that dark patterns present to companies.
Will local AI agents be the "linux desktop" of the next generation? Because as I understand it, next year is gunna be the year that local AI agents become a thing for the normies.
For the average desktop user, Linux never had anything to offer over Windows. The last nail in the coffin was obvious to me at the time: Linux didn't make any headway when Microsoft started shoving the first ridiculously-bad versions of Windows 10 down everybody's throat by abusing a security update channel. At that point it became clear that there was simply no demand for Linux in the desktop market except at a niche hobbyist level. Stockholm Syndrome was in full effect among Windows users, and it still is, and, well, I guess that's just the way it goes.
The enshittification of the Internet is even worse, though. I think personalized search and content curation through the use of local AI agents may be the only way to buck that trend.
I want something that will do for companies like Google, Amazon, and the news media what SpamBayes did for email: make it useful again. Local filtering by a tireless and incorruptible proxy whose interests are aligned with my own is the only way forward IMHO. The only question is how long it will take. My rather-useless guess is more than a year, less than ten years.
Google Search is a product embedded in the lives of everyone on the planet. I wonder to what extent its growth is a reflection of increasing population and Internet penetration. Even if "competitive knowledge engines" impacted Google Search, the effect would likely be minuscule compared to existing growth trajectories.
Speaking personally, there are some queries where I prefer an LLM. But usually I start with Google, and it's only after 5-10 searches that I get frustrated enough to remember I could just ask ChatGPT instead. So ironically, I actually send more searches to Google than I would have if they gave me the answer on the first one.
I wonder what their search metrics would look like if they removed quick bursts of searches. Presumably, someone searching five times in a row is actually having a bad experience, rather than loving the product so much they came back to it five times in one minute.
I think this is the same thing I feel when I read Meta's earnings. I continue to see growth in usage of their core properties but I don't think my entire circle touches Facebook or even Instagram nearly as much.
Whatsapp certainly isn't driving those ad dollars so it truly is remarkable how disconnected my demographic (loosely using my here) is from the overall world usage.
You have no idea of Whatsapp's marketshare in India - all small businesses use Whatsapp for all communication and even take payments. That's a 1.4B population.
Maybe not but they have all the timing info, the identities of the chat participants, and the facebook surveillance network. They also used to leak URLs pasted into the app out in order to generate previews, so they know what you’re linking to from within the app. Us they can infer way more about you than seems obvious at first.
They are encrypted to your device and your device can upload them unencrypted in backups if you don't configure encryption. Plus the original argument was Meta did not have access.
It's not about money - how valuable the company is depends on how many people use it intersect how useful it is.
As long as it's valuable, it's valuable.
I have a great idea of Whatsapp's marketshare globally. I am simply pointing out the ad revenue of Whatsapp is extremely low compared to their other properties. There is simply not enough surface area in Whatsapp used for that and their business profiles etc. are not going to be outearning US users of FB/Instagram.
Ultimately advertisers want a return on their spend and it's a closely watched metric for marketers. Them continuing to spend is indicative that there's growing value in ads, ie bots/ai agents cannot be the reason for their growth.
You could argue fb and particularly twitter are incentivized to include it in their DAU counts but market cares more for revenue for large companies.
SMEs spend a lot on advertising, in aggregate. These smaller businesses are more sensitive to lowered conversation rates and will bail early - Meta took a huge hit in earnings in the aftermath of Apple's privacy changes due to poor conversions. Advertisers didn't keep pumping money in - they stopped campaigns.
So do Android and iOS. They're still the primary indicators of the strength of the smartphone market. You probably can't imagine a world without advertisements or smartphones, but that's the point from the post you're responding to that you're missing. If the advertising industry looks healthy, it helps everyone by keeping investors satisfied and share prices up, even if it's a ruse. It is possible for smartphones and the concept of advertising to cease existing some day. There's a spectrum between the current reality and absolute zero, and staying as far away from zero is the goal, even once we enter an inescapable decline.
Arguably true, but that's a rather different point than "there is no alternative". There are arguments to be made about market "health" and the relative sizes of the largest players, but what the upthread comment was doing was resorting to "anti trust" shorthand that clearly doesn't apply. There may be problems with this market, but lack of competition isn't one of them.
> essentially everyone in my social circle has moved on from going to Google first for information. I guess our demographic is not predictive of the larger market.
"Google is dead, no one goes there anymore" is one of the most tired takes I see frequently on HN. It's nice to hear someone express the self-awareness to realize that what they see in their immediate circle is not representative of reality.
They think if they say it enough times they’ll eventually get it right one day to have their I told you so moment.
The smart money is always going against their hate. It’s not enough to stop using their services, but to also convince their friends and family to switch to their choices.
I'll admit that despite having a GPT4 sub which I use often, I still fallback on google for quick questions and verification of what GPT4 says if I need to be certain.
Not even because I am particularly going to google, it's just so heavily integrated.
I find GPT4 requires long queries to get much out. And I can't be bothered typing out a long query if Google can give me the same in 3 words and scanning down the result page.
I have moved to Kagi as my search engine, although 99.99..% of people will probably never pay for search. Anecdotally, whenever I'm not finding what I need on Kagi and fallback to Google (less than once per week), it's shocking what a disaster the UX of Google's products have become (Maps is an even bigger offender than Search, where seemingly arbitrarily labeled places get more visibility than the search results).
I don't hate on Google, but the user highlighted some feature on Google Maps that are not desirable, and clearly knows more about map apps than me, so why not ask him what he uses? Google provides great value, I agree, but sometimes there's better stuff out there.
> essentially everyone in my social circle has moved on from going to Google first for information
As you said, you don't know how representative is your social circle. And you may underestimate your Google usage. ChatGPT often isn't a good substitute to Google. Looking at my history, a lot of my Google queries couldn't be answer by ChatGPT. Either because I need precise information, or recent information. Often I use Google just to redirect me to some specific site, typically wikipedia.
If you have a social circle where 100% of your contacts turn to an LLM first, not only have you buried yourself deep in a niche filter bubble, but you have also surrounded yourself with some of the planet's most misinformed people. If I were you, I'd be worried.
I don't think there's a measurable difference between his social circle and those who still rely on traditional media (news, TV, mainstream "journalism") to form their view of the world. It's just another cage.
Agreed. Reddit is a bubble too if you take note of the viewpoints there, but that reaches a wider variety of folks. Imagine how much of a bubble HN is.
HN is a bubble where people listen to what you say even if you argue against them, I haven't found any such place anywhere else before. I've found some people who listen even to people they disagree with on some niche forums, but never a community as big as this with density this high.
Other than listening and arguing in relatively good faith I don't think HN is a bubble, although such people probably have pretty different opinions than the typical person simply because they listen and change themselves more so it gets more refined.
Everyone wants their shares to go up, more growth, which can then lead to questionable actions on their part. Did you see the recent article about search enshittification (tldr; to make key metrics go up, make search worse so that users have to make more queries to get what they want)?
This might surprise people a lot.
In developing countries Google is synonymous with internet.
A lot of even young, people have a mental model of the internet as a subset of Google.
Seems like a situation where it’s worth it to be cognizant of your bubble.
I don’t know exactly what you meant by “our demographic”, but I’m a frequent reader of HN, work in tech, and generally stay up to date with all things tech, and yet… I don’t know if a single person that doesn’t still use Google as their go-to place for information. Before this comment I had never even heard of Perplexity or You.com. /shrug
It is probably massively better for niche technical searches which many technical people here do for their job, that is the Kagis userbase after all.
But such searches doesn't generate much ad revenue, so it doesn't do much to Google to lose them, all the people searching for articles about makeup or clothes or games or other things that has strong advertisement potential Google is awesome as a search engine, I haven't seen anyone say Kagi is better there. Kagi is only better for the searches that Google doesn't care about since they generate so little ad revue, Google uses so much compute per search that I'm not even sure such technical searches would be profitable for them to run, likely that would increase profits to lose them to Kagi.
> I guess our demographic is not predictive of the larger market.
I think it is, "our demographic" is just a few years ahead of the masses. For example MacBooks started getting popular with programmers way before they got popular with the masses.
funny you mentioned that because this demographic is the same demographic that predicted the demise of FB (it has grown in orders of magnitudes), hating on Tesla (also has been growing), didn't believe the viability of Dropbox idea.
When you say moved on can you share what you're using when you want/need to buy something online? Understand you moving on for information, but just curious what you're using these days for a specific product.
Only better quality alternative I found that has the same coverage and is available here.
FWIW for my purposes Marginalia is also a lot better quality (less annoying, more likely to give me the results I want - if it has them) than Google now but I cannot use it as my only search engine since the index is still small.
The other big ones (Bing, DDG) managed to still be worse than Google last time I tried despite Google goong out of their way to make it easy for others to walk past them.
There was another interesting one but they discriminated against non Americans and didn't even allow is to try so I don't know. It looked promising though, but as long as kagi don't betray us I get I stay with it.
I'm not a huge online shopper, but if the item isn't a total commodity that I just buy from Amazon without thinking, I generally ask Perplexity for suggestions and find the summaries/conclusions more helpful than clicking through a bunch of links delivered by Google.
I think Google still beats the various AI tools for any use case where you need to find a real world thing or decide between real world things. Which are also the primary types of queries that drive advertising revenue for Google. Yeah, ChatGPT has replaced searching Google for stack overflow answers, but it's not like you were clicking on ads when looking for programming answers anyway.
Perplexity especially is absolute garbage for 99% of people and their use cases. Google search is instant, available from every browser window and works with minimal keystrokes. LLM based search is such a bad experience on mobile where verifying the likely nonsense response is even more of an expensive task.
Just remember no one is auditing what views, likes and clicks count Google and Facebook tell you, you are getting. Advertisers just milk corporations. They dont care if the numbers are fake. They are now trained to tell everyone to spend more or you dont get attention someone else will.
As Goldharber once famously said , about the Attention Economy - people have limited attention to give anything but infinite capacity to receive attention.
No one likes to hear or believe they dont really have any influence when the system is signalling they do. So the ponzi scheme grows larger and larger.
There is a great book about it (from an ex-googler) called the Subprime Attention Crisis.
No one knows what to do about it so everyones head is buried deep in the sand.
We need new attention allocation systems that are not market driven.
Advertisers don't always insist on seeing evidence of genuine ROI but online advertising is more measurable than most other forms of ads and when the ROI slips a lot of ads customers notice and act accordingly.
Marketing is fascinating WRT to fraud because everyone benefits from it: the ad space provider, the ad marketplace, and the marketing team who needs to show performance.
I personally think this line of thought is due to people just not accepting how profitable advertising is to the end business. We're taking a clear and massive increase in profits that dwarf advertising costs. People don't advertise on meta/Google because they are duped by bots or some conspiracy between ads marketplace and marketing teams to hide the fraud. They advertise because their bottom line goes up and it's clear and direct. I once worked for a company where the only reason we'd ever drop some amount of advertising was due to supply constraints. We sold too much at certain points! It really does work.
Maybe not. But your brain noticed those brand names and when you need a product in that category they are more likely to come to mind.
It’s actually shocking if you think about products from your childhood which are no longer advertised and have completely dropped out of public consciousness.
Recently, I read on another HN thread that Kagi uses Google to build its index. If that's the case, the only way Kagi appears better than Google is that it doesn't show ads. Not sure, if my understanding is correct or not.
kagi allows you to downrank or even ban or boost certain websites so that when you serach, if there is a result from that website, it'll be downranked or boosted based on what you set up. It also automatically downranks websites that use shady ad trackers. They are slowly building their 'crawler' too but it's more nuanced regarding how they do this
Exactly and this is what they've been doing, per the recent trial and post on the guy who destroyed Search. That's what 90% market share let's you do, stuff another 1 or 2 ads before results, reword/suggest queries so they are more valuable, worsen results so people try more queries (and see more ads) for one search, articially boost the 2nd ad bid (in a second price auction) so that the winner has to pay more than 2nd place bid.
Been a shareholder a long time and 20%+ growth on 11-digit quarterly revenue still mindboggled me
Yes, and this strategy is only good for one or two pumps, because the advertisers will eventually notice the lower engagement rate per dollar of spend and reduce their commitment accordingly.
I'm curious what 2025 will look like for Elgoog. There are only so many desperate death throw spin tweaks available before the opportunities for indirection are exhausted.
I think so, as an early AdWords small advertiser, in the first cycle most of the inbound sales were explained by SEO and Ads, then SEO continued to be more important than Ads but Ads declined, then SEO was an impossible game and we run Ads just because we assigned a budget for Ads, then I hired three different agencies for optimizing AdWords campaigns for a niche market and nothing happened... so I started thinking AdWords is a kind of scam for small companies.
But Google and Meta can easily manufacture views for whoever pays the most by showing those ads more.
And then every other advertiser has compete with that price.
I mean if 2 big movies are being released this weekend and one producer is willing to spend 5 million on ads then pressure on the other producer goes up to spend 6. Its not that simple or scientific to connect how the movies perform to the ads. Same with politics. One jackass raises 100k to spend on ads then their opponent feels pressure to raise and spend the same or more. There is lot of fomo driving this machine.
On top of it Corps love to say the people are buying what they want. But google results show corps are spending a hell of a lot influence who buys what. So are people driving real demand or ad spend driving it?
Everyone is competing furiously for limited Attention. How do you get noticed in a room called the internet where everyone is trying to capture attention simultaneously. It feels like in such an environment of attention scarcity Google and Facebook are like the Oil Cartel. They can control the price.
As you said, The central point is where the attention goes, hence if you just prompt an LLM for a movie to watch now because it gives better answers the focus will be shifted against Google.
The layoffs and dividend are related -- the company's death rattle has been shaking a while now. Management is desperate to retain the confidence of the investor class.
Speaking as a shareholder here, a 2 trillion dollar valuation warrants extraordinary justification. Past performance is no guarantee of future results. As the AI models get better and better at compressing the world's information, people will be going directly to their model of choice
With the amount of mindshare, infrastructure and over 90% of the search engine market share that Google has, it will take decades to even begin to challenge Google's market share in search.
We've seen this with Neeva which is now no more. Perplexity appears to be no different and only appeals to techies and at the same time is already dependent on Google search for their results, according to The Information.
In fact I can only see them getting shut down like Neeva or the case of Perplexity likely to be acquired. Amazon looks more of a potential acquirer for Perplexity AI.
I don’t think so. All a startup needs to do is build 50+ data centers around world. Lay thousands of miles of terrestrial and under sea fiber optic cables. And finally build a browser and obtain 80% market share.
not just this - most android smartphones do have google search bar by default, in some it's not trivial to disable it and most ppl are using it. This alone is a huge moat. Add to this a huge nr of chromebooks that children use in schools (and after them too since the OS is familiar) - default search for these is google too. Default ff search engine - google, default iphone search engine - google. Every time someone buys an iphone, google gets one more user automatically. Some may switch, but absolute majority will still use default
> Alphabet’s Board of Directors today authorized the company to repurchase up to an additional $70.0 billion of its
Class A and Class C shares in a manner deemed in the best interest of the company and its stockholders
Layoff is not the same as "fired". Please use the correct terminology in consideration for those who lost their jobs.
Also, the termination dates for those who were laid off in January 2023 would be around April 2023 (the layoff news came earlier due to WARN act), so the employee count as of 2023-03-31 might not include those people. This means a difference of ~10000 can be accounted for by the 2023-01-20 round of layoffs.
That is what corporate HR and Executives want you to think.
Layoffs can make it look like the company is having problems so instead of doing that they will create vague KPIs so that employees will not meet them so they can be fired.
AFAICT, Google didn't go to the effort of creating vague objectives for people to fail at. Instead they've blanket cut teams regardless of their success or performance.
Have some respect. People lost their jobs. They weren't fired because they did something wrong, they were laid off because the company did something wrong.
If you've been fired, it typically signals you had very bad performance or committed some fireable offense. If you were laid off, you were ostensibly just on the wrong team at the wrong time.
It's not about how you view your last employer, it's about how your next potential employer will view you.
If you as a shareholder receive a dividend of X% of the share price, you owe tax on it. But if the company buys back stock and as a result the share price increases by X%, you do not owe tax on that unrealized gain until you choose to sell your stock. That’s good for investors.
Qualified dividends are taxed at the same rate as long term capital gains, although the rules for what qualifies can be tricky (special one-time dividends in particular).
Google does it regularly as they pay out so much RSUs they want to keep the same number of shares on the market. You can look and see them historically doing this
Brief notes after spending 10 minutes figuring out how to get this, not nitpicking or saying you got anything wrong. Source was page with "54" at the bottom
- Unvested grants over 4 years vs. buybacks this year
- #s are for 2020, not 2023
- # excludes tax witholdings (i.e. shares they'll never grant).
- For 2020, grants of 15.539 - 10.273 witholding = ~5B, matching sibling comment's correction
- $2.324B is one of 4 columns, real number is $50.274 B
- so for 2020, real #s are 5.26B in unvested grants over 4 years versus 50.274B in buybacks that year.
- for 2023, 22.578 - 10.164 = 12.4B in unvested grants over 4 years, versus 62B in buybacks that year
You're right, it's too low, see link at bottom: my guess is the $2B number, inclusive of all granted but not vested, is the correct #.
In general people way overestimate the # of SWEs at Google relative to the employee #, even within Google.
I don't wanna get too cute in public but some fermi estimates including, say, number of employees per engineer at a 100 person startup, and a jaundiced yet correct view of how much is outsourced at a company with a lot of grunt level SWE work common to every company, bridges the multiplier from there.
Of all the people in this thread swearing they don't use Google, I wonder how many are writing their comments using Chrome (or Chromium, or Edge, or Brave, or Opera, or any other browser that uses the guts of the Chromium project)
I use DuckDuckGo for search, Apple Maps when on my iPhone, and Gnome Maps when on my computers. My main browser is Firefox, but I use Brave (Safari-based) on iOS due to better ad blocking there. I use local markdown files for all of my note taking, and Fastmail for email.
Apple gets billions from Google, funding quite a bit of their R&D.
Most of the open source software you use including the Linux kernel has a bunch of contributors from Google.
Going one step further, Google has a large hand in open standards for everything, from wifi to programming languages.
I'm not saying you should avoid these, it's just interesting that you can take so many non-typical steps to avoid google and still mandatorily have them involved in all of your technology.
Is it that interesting? How might you expect one to avoid Google's influence in standards? Whereas Firefox is one of the few mainline browsers that isn't directly controlled by Firefox.
In short, taking some of these steps is reasonable for a person, and some... are not. Painting it as some kind of moral hypocrisy isn't helpful.
However, we should also remember that Mozilla's main funder is... Google/Alphabet, via a royalty deal for having Google be the default search engine. See, e.g., here:
So far I've replaced Google products with Firefox (even on mobile), Kagi/DDG, Proton Mail, Simple Mobile Tools, my own FTP server, Emby, and F-Droid.
But I also still use Android, the Google Play Store, YouTube (via NewPipe), Google Messages, Google Maps, and Google Keep because I haven't found great alternatives. It's surprisingly hard to completely get rid of Google.
My expectation is that whatever logic held up last quarter held up this quarter. It's possible the optimal allocation is some of both, but what's the tradeoff that would drive that instead of one being mathematically superior to the other?
A possible endgame of this quest for growth is just mixing unlabeled ads directly in with search content. Effectively pay for ranking with some quality filter. I'm pretty sure it won't come to that, but worse things have happened.
First they'll just insert them among the results but--no need to worry!--"clearly" labeled as ads. Then the labels get smaller and smaller. Like Quora, yahoo news, etc.
I meant the actual search results will be mangled to show ads. And that's where llms come into play: they can merge a quote from wikipedia with a pharma-sponsored ad.
Personally I use google more/just as much for product searches; stores selling X, finding comparison sites, going to the manufacturers page for a product.
That and restaurants from maps.
I use it less for information based searches, but that almost seems to be a win from an advertiser perspective.
Google has been doing stock buybacks for years. Why are they pivoting to also doing a dividend too? Does a dividend give a bigger short term stock bump?
Buybacks are useful for many reasons, but one is that theyre good for people borrowing against their shares. If a lot of people have borrowed against their google shares and now that interest rates are high want to pay back the loan without selling a dividend makes sense.
Lots of other reasons too I think but much of it probably has to do with the change in interest rates.
Sundar Pichai, CEO, said: “Our results in the first quarter reflect strong performance from Search, YouTube and
Cloud. We are well under way with our Gemini era and there’s great momentum across the company. Our
leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI
innovation.”
The only one mention, it's strong position across conservative approach. A must have for any large multi national company like Google.
End of the day, for shareholders this is what matters. Not what products were killed, how many people were laid off, what ethical dilemmas employees face etc. are a distraction for them. This is what it has to come down to. It's not wrong.
That’s not a terrible guess. Together they own 56% of the voting shares and maintain control of the company. A divided puts money in their pocket without needing to sell any of their class B 10x voting shares.
I’m a Googler who doesn’t do anything remotely close to setting capital return policy. Just remember Alphabet has been buying back 10s of billions for a while. Dividends are just a different capital return mechanism.
Could you please expand on this? If a person got issued RSUs but they have not vested yet, wouldn't they be happy that the RSUs are going to be worth more by the time they get vested?
In a vacuum where precise numbers do not exist, maybe.
In this real scenario, if someone's goog shares were vesting at an earlier value - let's take a rough average at a glance of goog YTD to be $145, they will have lost on a year's worth of dividends at $0.2 per share. However, the current share price is $175.
So, through this maneuver, a person holding N goog shares will lose at most 3 quarters of dividends: N * 0.2$ * 3 = N * 0.6$
But they will have gained whatever the stock has appreciated, which at this moment in time works out to: N * (175-145)$ = N * 30$
What am I missing which would make the scenario above result in OP's claim of "dividends devalue issued unvested RSUs"?
EDIT: This also fails to take into account "Dividend Equivalents (DEs)", which are not factored above, and would yield extra income to the person that owns unvested shares.
Dividends started in 1602 with the Dutch East India company. However corporations with shares predate that somewhat. So it wasn’t technically the original point.
This has nothing to do with layoffs. They have plenty of money for salary even after these payouts. The layoffs are intended to reduce costs / increase profit. Google has no desire for employees; they only have employees insofar they are a necessary expense.
Once upon a time it was said by Google leadership the biggest cost Google pays is opportunity costs, chiefly in the form of projects and products they don't pursue.
The dividend is interesting. Why not spend that to further grow new businesses for Google? Is it signaling that they're not unfairly using strength in one market to take over another?
It helps add stability to the value of the stock, in simple terms. I think it’s good for a company like Google. A bad demo can crash the price 20%. That makes the dividend yield go up, which makes the stock more attractive. Plus, if you hold for years and years and years you get actual income.
Interesting that they think they're out of internal projects and acquisitions to (profitably) spend money on. Even more interesting that the stock seems to agree -- I guess investors already believed that growth is over, and are seeing this recognition of that as an alignment between reality and internal strategy.
The only major investment left would be computing infrastructures, but it's severely limited by supply. Even if Google wants to spend more money, simply there's no chips to buy. I don't see any significant future investment opportunities other than Waymo in the foreseeable future, but it seems still far from scaling out.
> Even if Google wants to spend more money, simply there's no chips to buy.
This strongly suggests that there's an opportunity to spend money relaxing this shortage. If your business growth is being throttled by suppliers, then investment either allows you to grow those suppliers, or vertically integrate them out of the picture.
You can't just create new supply. Chip fabs take multiple years to spool up. You also have to get the machines to make the chips and guess what, those are supply constrained too.
It's not a problem you can simply spend money at, it's a global supply chain problem with many disparate companies each with their own constrained supply chains.
Yeah, I think Google should be actively working on addressing shortage. But I don't think this can be solved in the short term even with infinite capitals since ASML is the fundamental bottleneck and everyone is competing for the same limited capacity.
I thought that this earnings announcement would be the first one where we'd see some impact from competitive knowledge engines, e.g. Perplexity, You.com, ChatGPT + Bing, etc., but Google still grew search $6B/15%.
This is impressive both because it's hard to keep such a big business growing at that rate and because essentially everyone in my social circle has moved on from going to Google first for information. I guess our demographic is not predictive of the larger market.
I think that most of the traffic being stolen away is going to be for low value searches. I (and probably almost everyone else) use Google when I already know what I want, ie I’m trying to get to a company’s website to buy a particular thing, but don’t know their url name.
I’m not going to use an LLM to shop for car insurance or look for hotels.
LLM responses have also started embedding ads [1], or LLM responses are themselves ads [2]
- [1] https://www.reddit.com/r/ChatGPT/comments/17ky9sg/first_time... - [2] https://arstechnica.com/gadgets/2024/04/reddit-sneaky-ai-spa...
Ok, but if you’re a well off 40 something mom trying to buy your daughter tickets to a Taylor Swift concert, what would you do? I’m willing to bet that the proportion of people using Perplexity to those using Google to search for concert tickets this past quarter was infinitesimal. Or those shopping for new cars. Or airline tickets. Or furniture. Or lawyers. Or health care. I can go on.
>I’m not going to use an LLM to shop for car insurance or look for hotels.
As I understand it, this is a great use-case for AI agents (a-la Custom GPT) and I wouldn't be surprised if the tech for that matures over the next year.
I guess I could imagine how they might be helpful in initial research - but no way I'm letting some LLM book a hotel that might not exist or get me car insurance from StratesFrarm Unsurance.
> but no way I'm letting some LLM book a hotel that might not exist or get me car insurance from StratesFrarm Unsurance.
Ah, scammers targeting your LLM assistant will certainly be a thing, this really sounds like the old "I bought the Eiffel tower" scams.
I'm not clear how this is different from scammers targeting humans? If anything, I'd expect it to be easier to set up the LLM agent to have secure/cryptographical validation of the providers, to prevent against the sorts of traps that humans fall into.
In the simplest case, we could just have trusted authorities provide lists of verified booking partners, same as e.g. Google Flights does now.
The whole agent idea is questionable anyway. Sites are are already optimized to require the absolute minimum effort for conversion and most of the interesting aggregator sites already exist and are similarly optimized. Who's going to want a clunky natural language interface that breaks half the time?
I would. I don't know what you're referring to as "absolute minimum", but when I book a flight I'm typically taken through a flow of about 10 pages, each trying to convince me to buy another set of extras. I would love an agent whom I could tell to not buy any extras and just get the basic plane tickets for me in one click, or if it fails to do so, to try again with another partner.
That would be the first step of rollout. The next step would be to ask you in ways that make it hard for you to say no. An LLM agent isn't going to stop companies from bad behavior/dark patterns, it's going to make them more effective at deploying dark patterns to segments of the market.
I think only competition and/or regulation helps push down the allure that dark patterns present to companies.
Yes, it's a great use case for using local AI agents to shop for the best deal on the consumer's behalf.
Or did you mean Google's AI agent, or hotels.com, or somebody else with a built-in conflict of interest? Well, in that case, no thanks.
Will local AI agents be the "linux desktop" of the next generation? Because as I understand it, next year is gunna be the year that local AI agents become a thing for the normies.
For the average desktop user, Linux never had anything to offer over Windows. The last nail in the coffin was obvious to me at the time: Linux didn't make any headway when Microsoft started shoving the first ridiculously-bad versions of Windows 10 down everybody's throat by abusing a security update channel. At that point it became clear that there was simply no demand for Linux in the desktop market except at a niche hobbyist level. Stockholm Syndrome was in full effect among Windows users, and it still is, and, well, I guess that's just the way it goes.
The enshittification of the Internet is even worse, though. I think personalized search and content curation through the use of local AI agents may be the only way to buck that trend.
I want something that will do for companies like Google, Amazon, and the news media what SpamBayes did for email: make it useful again. Local filtering by a tireless and incorruptible proxy whose interests are aligned with my own is the only way forward IMHO. The only question is how long it will take. My rather-useless guess is more than a year, less than ten years.
And Google will be developing Gemini further so rheu still be in the game
Google Search is a product embedded in the lives of everyone on the planet. I wonder to what extent its growth is a reflection of increasing population and Internet penetration. Even if "competitive knowledge engines" impacted Google Search, the effect would likely be minuscule compared to existing growth trajectories.
Speaking personally, there are some queries where I prefer an LLM. But usually I start with Google, and it's only after 5-10 searches that I get frustrated enough to remember I could just ask ChatGPT instead. So ironically, I actually send more searches to Google than I would have if they gave me the answer on the first one.
I wonder what their search metrics would look like if they removed quick bursts of searches. Presumably, someone searching five times in a row is actually having a bad experience, rather than loving the product so much they came back to it five times in one minute.
> its growth is a reflection of increasing population and Internet penetration
Considering the explicit link their growth opportunity to internet penetration (as does Facebook), I would say its a very strong reflection.
Everyone on the planet? Even in China or Russia?
Google is just good. You use it to get human answer to a question and find relevant information on a topic. Those are of human nature.
Google used to be good. Now the result you want is sometimes on the third or fourth page. They've cannibalized it.
I think this is the same thing I feel when I read Meta's earnings. I continue to see growth in usage of their core properties but I don't think my entire circle touches Facebook or even Instagram nearly as much.
Whatsapp certainly isn't driving those ad dollars so it truly is remarkable how disconnected my demographic (loosely using my here) is from the overall world usage.
You have no idea of Whatsapp's marketshare in India - all small businesses use Whatsapp for all communication and even take payments. That's a 1.4B population.
How does whatsapp make money? (At all, and how much?)
It's not possible it makes as much as the main Meta properties. It has no ads on anything people use.
I suspect WhatsApp has a better shot at being the "everything app" compared to Twitter.
Am guessing they want to become like "wechat"
They have a business api and take a cut of transaction fees on whatsapp pay.
And they obviously cross-reference the data with Instagram/FB to sell you stuff.
Meta does not have access to your WhatsApp chats as they are end to end encrypted.
Maybe not but they have all the timing info, the identities of the chat participants, and the facebook surveillance network. They also used to leak URLs pasted into the app out in order to generate previews, so they know what you’re linking to from within the app. Us they can infer way more about you than seems obvious at first.
As long as you and the recipient has encrypted backups turned on How to enable end-to-end encrypted backup[0]
[0]: https://faq.whatsapp.com/490592613091019
No, those are Backups stored in iCloud / Google Drive. Google / Apple have access to those, not Meta.
They are no longer end to end encrypted if google/apple have access
They are encrypted to your device and your device can upload them unencrypted in backups if you don't configure encryption. Plus the original argument was Meta did not have access.
It's not about money - how valuable the company is depends on how many people use it intersect how useful it is. As long as it's valuable, it's valuable.
I have a great idea of Whatsapp's marketshare globally. I am simply pointing out the ad revenue of Whatsapp is extremely low compared to their other properties. There is simply not enough surface area in Whatsapp used for that and their business profiles etc. are not going to be outearning US users of FB/Instagram.
Same in all of South America.
The world is much larger than the bubble we live in.
Or they are counting bots and other ai agents and ignoring the truth?
Ultimately advertisers want a return on their spend and it's a closely watched metric for marketers. Them continuing to spend is indicative that there's growing value in ads, ie bots/ai agents cannot be the reason for their growth.
You could argue fb and particularly twitter are incentivized to include it in their DAU counts but market cares more for revenue for large companies.
"There is no alternative"
I wouldn't put it past Google/Meta coopting corporate advertisers. Everyone makes everyone look good, by stating the best possible numbers.
SMEs spend a lot on advertising, in aggregate. These smaller businesses are more sensitive to lowered conversation rates and will bail early - Meta took a huge hit in earnings in the aftermath of Apple's privacy changes due to poor conversions. Advertisers didn't keep pumping money in - they stopped campaigns.
Google and Meta literally represent alternative advertising products.
So do Android and iOS. They're still the primary indicators of the strength of the smartphone market. You probably can't imagine a world without advertisements or smartphones, but that's the point from the post you're responding to that you're missing. If the advertising industry looks healthy, it helps everyone by keeping investors satisfied and share prices up, even if it's a ruse. It is possible for smartphones and the concept of advertising to cease existing some day. There's a spectrum between the current reality and absolute zero, and staying as far away from zero is the goal, even once we enter an inescapable decline.
Arguably true, but that's a rather different point than "there is no alternative". There are arguments to be made about market "health" and the relative sizes of the largest players, but what the upthread comment was doing was resorting to "anti trust" shorthand that clearly doesn't apply. There may be problems with this market, but lack of competition isn't one of them.
I've thought this about Facebook/Meta for so many years now, and I continue to be proven wrong time and time again.
I see friends' Meta activity in the Philippines and it's 10x what I see from friends elsewhere.
I'm not sure anyone under like 60 is frequently using Facebook as social media, but Facebook Marketplace is huge, Instagram is huge.
> essentially everyone in my social circle has moved on from going to Google first for information. I guess our demographic is not predictive of the larger market.
"Google is dead, no one goes there anymore" is one of the most tired takes I see frequently on HN. It's nice to hear someone express the self-awareness to realize that what they see in their immediate circle is not representative of reality.
They think if they say it enough times they’ll eventually get it right one day to have their I told you so moment.
The smart money is always going against their hate. It’s not enough to stop using their services, but to also convince their friends and family to switch to their choices.
> everyone in my social circle has moved on from going to Google first for information
Or have they ?
I'll admit that despite having a GPT4 sub which I use often, I still fallback on google for quick questions and verification of what GPT4 says if I need to be certain.
Not even because I am particularly going to google, it's just so heavily integrated.
I find GPT4 requires long queries to get much out. And I can't be bothered typing out a long query if Google can give me the same in 3 words and scanning down the result page.
you will like perplexity pro then?
Or Kagi, which is essentially LLM + citation links (with the '?' suffix)
I have moved to Kagi as my search engine, although 99.99..% of people will probably never pay for search. Anecdotally, whenever I'm not finding what I need on Kagi and fallback to Google (less than once per week), it's shocking what a disaster the UX of Google's products have become (Maps is an even bigger offender than Search, where seemingly arbitrarily labeled places get more visibility than the search results).
What do you use instead of Google Maps? I don't know enough about alternatives to choose one.
Apple Maps has better satellite images, and since about a year is often better at navigating.
Google maps trumps with pois
What's even the google hate? the company is great and provides value. Why go into the rabbit hole of worse products?
I don't hate on Google, but the user highlighted some feature on Google Maps that are not desirable, and clearly knows more about map apps than me, so why not ask him what he uses? Google provides great value, I agree, but sometimes there's better stuff out there.
Reread GP, Google maps has gotten atrocious with highlighting random spots above your search. That's not hate, it's observable fact.
First time on HN? Welcome.
> essentially everyone in my social circle has moved on from going to Google first for information
As you said, you don't know how representative is your social circle. And you may underestimate your Google usage. ChatGPT often isn't a good substitute to Google. Looking at my history, a lot of my Google queries couldn't be answer by ChatGPT. Either because I need precise information, or recent information. Often I use Google just to redirect me to some specific site, typically wikipedia.
If you have a social circle where 100% of your contacts turn to an LLM first, not only have you buried yourself deep in a niche filter bubble, but you have also surrounded yourself with some of the planet's most misinformed people. If I were you, I'd be worried.
I don't think there's a measurable difference between his social circle and those who still rely on traditional media (news, TV, mainstream "journalism") to form their view of the world. It's just another cage.
This site has always been a bubble.
Agreed. Reddit is a bubble too if you take note of the viewpoints there, but that reaches a wider variety of folks. Imagine how much of a bubble HN is.
HN is a bubble where people listen to what you say even if you argue against them, I haven't found any such place anywhere else before. I've found some people who listen even to people they disagree with on some niche forums, but never a community as big as this with density this high.
Other than listening and arguing in relatively good faith I don't think HN is a bubble, although such people probably have pretty different opinions than the typical person simply because they listen and change themselves more so it gets more refined.
But isn't that the definition of a bubble - a group that doesn't behave the same as gen pop?
I would say this is the definition of a sub culture.
A bubble in this context has the connotation of ignorance of what is outside the bubble.
Indeed. Most of the commenters here really have no clue of what is going on and are just reacting to the headlines.
I'm very delighted that I bought GOOGL stock at $95 when it fell after everyone panicked at their Bard demo a year ago. [0]
[0] https://news.ycombinator.com/item?id=34713073
I'm bullish on GOOGL - Gemini 1.5 Pro is insanely good! GCP is also democratizing the cloud; I think the market share will only increase.
But isn't that exactly the problem with Google?
Everyone wants their shares to go up, more growth, which can then lead to questionable actions on their part. Did you see the recent article about search enshittification (tldr; to make key metrics go up, make search worse so that users have to make more queries to get what they want)?
This might surprise people a lot. In developing countries Google is synonymous with internet. A lot of even young, people have a mental model of the internet as a subset of Google.
I’ve read articles about new Internet users in some countries where it’s similar, except Facebook. Maybe it depends on how it was introduced?
First, most lucrative markets like travel, product search etc. are still all on Google. Certain growth in them is coming along with GDP growth.
Second, Google can still be optimizing/increasing no. of ads served.
I played around with the free version of Gemini recently. I gotta say it was quite impressive. On par or even better than the paid version of OpenAI.
Google search's biggest threat is Amazon. People buying stuff search directly on Amazon.
#notallpeoplebuyingstuff
Seems like a situation where it’s worth it to be cognizant of your bubble.
I don’t know exactly what you meant by “our demographic”, but I’m a frequent reader of HN, work in tech, and generally stay up to date with all things tech, and yet… I don’t know if a single person that doesn’t still use Google as their go-to place for information. Before this comment I had never even heard of Perplexity or You.com. /shrug
Oh, Perplexity is great. It's an LLM that answers with links and explanations of what you'll find in them.
I don't find it useful as a main search engine, but some queries are obviously better handled by something like it.
Anyway, yeah, I guess I'm the only person I know in real life that does not use Google.
You still have to verify plausible sounding LLM output somewhere.
And Google is doing a worse and worse job of performing that role or any other.
There are other search engines and almost all of them are orders of magnitude better than google is now.
Saying other search engines are orders of magnitude better is the funniest thing I’ve read all week.
Citations needed there buddy
No, not really.
The decline of Google's search performance is on the front page of HN at least once a week. It's common knowledge at this point.
Try Kagi if you want to be reminded of what good search is like.
On what metrics of search quality is Kagi "orders of magnitude" better than Google?
It is probably massively better for niche technical searches which many technical people here do for their job, that is the Kagis userbase after all.
But such searches doesn't generate much ad revenue, so it doesn't do much to Google to lose them, all the people searching for articles about makeup or clothes or games or other things that has strong advertisement potential Google is awesome as a search engine, I haven't seen anyone say Kagi is better there. Kagi is only better for the searches that Google doesn't care about since they generate so little ad revue, Google uses so much compute per search that I'm not even sure such technical searches would be profitable for them to run, likely that would increase profits to lose them to Kagi.
That is something that you can only decide for yourself.
- You should try this steak, it's delicious!
- You can't prove that! I'm not trying the steak until you have evidence that it's delicious!
The typical HN downvoter invited (once) to eat at a restaurant...
> I guess our demographic is not predictive of the larger market.
I think it is, "our demographic" is just a few years ahead of the masses. For example MacBooks started getting popular with programmers way before they got popular with the masses.
It's possible our demographic is just more ahead of the market than you think. There's a lot more quarters left in the future...
I already include site:reddit.com when searching for reviews, but I think that's been getting astroturfed away.
funny you mentioned that because this demographic is the same demographic that predicted the demise of FB (it has grown in orders of magnitudes), hating on Tesla (also has been growing), didn't believe the viability of Dropbox idea.
When you say moved on can you share what you're using when you want/need to buy something online? Understand you moving on for information, but just curious what you're using these days for a specific product.
I went to Kagi.
Only better quality alternative I found that has the same coverage and is available here.
FWIW for my purposes Marginalia is also a lot better quality (less annoying, more likely to give me the results I want - if it has them) than Google now but I cannot use it as my only search engine since the index is still small.
The other big ones (Bing, DDG) managed to still be worse than Google last time I tried despite Google goong out of their way to make it easy for others to walk past them.
There was another interesting one but they discriminated against non Americans and didn't even allow is to try so I don't know. It looked promising though, but as long as kagi don't betray us I get I stay with it.
> when you want/need to buy something online
Not OP, but Kagi/reddit/trustedReviewSites/anywhereButAmazon.
I'm not a huge online shopper, but if the item isn't a total commodity that I just buy from Amazon without thinking, I generally ask Perplexity for suggestions and find the summaries/conclusions more helpful than clicking through a bunch of links delivered by Google.
I think Google still beats the various AI tools for any use case where you need to find a real world thing or decide between real world things. Which are also the primary types of queries that drive advertising revenue for Google. Yeah, ChatGPT has replaced searching Google for stack overflow answers, but it's not like you were clicking on ads when looking for programming answers anyway.
Perplexity especially is absolute garbage for 99% of people and their use cases. Google search is instant, available from every browser window and works with minimal keystrokes. LLM based search is such a bad experience on mobile where verifying the likely nonsense response is even more of an expensive task.
I have never used an LLM for buying intent and those are the valuable queries, AIUI.
Or there is large scale number fudging and fraud.
Just remember no one is auditing what views, likes and clicks count Google and Facebook tell you, you are getting. Advertisers just milk corporations. They dont care if the numbers are fake. They are now trained to tell everyone to spend more or you dont get attention someone else will.
As Goldharber once famously said , about the Attention Economy - people have limited attention to give anything but infinite capacity to receive attention.
No one likes to hear or believe they dont really have any influence when the system is signalling they do. So the ponzi scheme grows larger and larger.
There is a great book about it (from an ex-googler) called the Subprime Attention Crisis.
No one knows what to do about it so everyones head is buried deep in the sand.
We need new attention allocation systems that are not market driven.
Advertisers don't always insist on seeing evidence of genuine ROI but online advertising is more measurable than most other forms of ads and when the ROI slips a lot of ads customers notice and act accordingly.
Marketing is fascinating WRT to fraud because everyone benefits from it: the ad space provider, the ad marketplace, and the marketing team who needs to show performance.
I personally think this line of thought is due to people just not accepting how profitable advertising is to the end business. We're taking a clear and massive increase in profits that dwarf advertising costs. People don't advertise on meta/Google because they are duped by bots or some conspiracy between ads marketplace and marketing teams to hide the fraud. They advertise because their bottom line goes up and it's clear and direct. I once worked for a company where the only reason we'd ever drop some amount of advertising was due to supply constraints. We sold too much at certain points! It really does work.
Maybe, but I can't remeber an add I've seen, much less clicked on in the last week. You?
Maybe not. But your brain noticed those brand names and when you need a product in that category they are more likely to come to mind.
It’s actually shocking if you think about products from your childhood which are no longer advertised and have completely dropped out of public consciousness.
Need more data to see the big picture.
The number of people who don't see their bottom line growing, but are spending on ads, getting views is not reported anywhere.
Would also be interesting to see if ad budgets of the largest spenders are increasing with time once market capture is complete.
"Everybody generalizes from one example. Well, at least I do."
Except somebody needs to pay at the end.
I think I am opted into an experiment, but when I use Google search the first results are answers from their own LLM.
https://search.google/
I was asking GPT some question reg a Postgres feature , it gave me the answer with the caveat that it's knowledgebase hadn't been updated in a year.
I went right back to google.
lol at people still using Google. Kagi is far superior.
Recently, I read on another HN thread that Kagi uses Google to build its index. If that's the case, the only way Kagi appears better than Google is that it doesn't show ads. Not sure, if my understanding is correct or not.
kagi allows you to downrank or even ban or boost certain websites so that when you serach, if there is a result from that website, it'll be downranked or boosted based on what you set up. It also automatically downranks websites that use shady ad trackers. They are slowly building their 'crawler' too but it's more nuanced regarding how they do this
Consider this: You ask a question (go to google) to solve a problem. But an LLM solve it for you. That's why they are popular in programming.
However, besides this, google is still my go to for relevant information on entertainment and news etc.
Yeah, Kagi is more for academics and people wanting to search the real internet, not the pop one.
lol at paying for search.
The same kind of people who try alternatives are likely using adblockers, therefore they weren't positively affecting Google's earnings anyway.
The volume of search ads I see increased dramatically since one year ago. Just adding a data point to the discussion.
Exactly and this is what they've been doing, per the recent trial and post on the guy who destroyed Search. That's what 90% market share let's you do, stuff another 1 or 2 ads before results, reword/suggest queries so they are more valuable, worsen results so people try more queries (and see more ads) for one search, articially boost the 2nd ad bid (in a second price auction) so that the winner has to pay more than 2nd place bid.
Been a shareholder a long time and 20%+ growth on 11-digit quarterly revenue still mindboggled me
Yes, and this strategy is only good for one or two pumps, because the advertisers will eventually notice the lower engagement rate per dollar of spend and reduce their commitment accordingly.
I'm curious what 2025 will look like for Elgoog. There are only so many desperate death throw spin tweaks available before the opportunities for indirection are exhausted.
I think so, as an early AdWords small advertiser, in the first cycle most of the inbound sales were explained by SEO and Ads, then SEO continued to be more important than Ads but Ads declined, then SEO was an impossible game and we run Ads just because we assigned a budget for Ads, then I hired three different agencies for optimizing AdWords campaigns for a niche market and nothing happened... so I started thinking AdWords is a kind of scam for small companies.
But Google and Meta can easily manufacture views for whoever pays the most by showing those ads more.
And then every other advertiser has compete with that price.
I mean if 2 big movies are being released this weekend and one producer is willing to spend 5 million on ads then pressure on the other producer goes up to spend 6. Its not that simple or scientific to connect how the movies perform to the ads. Same with politics. One jackass raises 100k to spend on ads then their opponent feels pressure to raise and spend the same or more. There is lot of fomo driving this machine.
On top of it Corps love to say the people are buying what they want. But google results show corps are spending a hell of a lot influence who buys what. So are people driving real demand or ad spend driving it?
Everyone is competing furiously for limited Attention. How do you get noticed in a room called the internet where everyone is trying to capture attention simultaneously. It feels like in such an environment of attention scarcity Google and Facebook are like the Oil Cartel. They can control the price.
As you said, The central point is where the attention goes, hence if you just prompt an LLM for a movie to watch now because it gives better answers the focus will be shifted against Google.
Fantastic points and perspective, thanks for sharing, w34t. This makes sense.
Also worth noting that ChatGPT, while big in tech circles, most people don't use it day to day.
>I guess our demographic is not predictive of the larger market.
The only thing this demographic is predictive of is its tendency to overestimate its degree of influence.
I want to say I'm joking, but I've unfortunately noticed that a lot of techies are very self-absorbed and detached from the wider world at large.
The layoffs and dividend are related -- the company's death rattle has been shaking a while now. Management is desperate to retain the confidence of the investor class.
I think most companies would love to being "dying" like Google "is". Seriously, Google is not dying and making obviously false claims is not helpful.
I could give more credibility to an argument for "stagnating" over "dying". A lot of mature companies are still hugely profitable.
Speaking as a shareholder here, a 2 trillion dollar valuation warrants extraordinary justification. Past performance is no guarantee of future results. As the AI models get better and better at compressing the world's information, people will be going directly to their model of choice
> a 2 trillion dollar valuation warrants extraordinary justification
$320B annual revenue, 15% growth, $0.20 per share dividend and $70B share buyback.
Enough said.
And it’s very likely that for 90% of people their model of choice will be at the other end of the Google/Chrome search box
Top 5 most valuable company on earth
Massive YoY growth
Massive cash horde, buybacks, dividends
Target of endless legal actions due to market dominance
"death rattle"
TIL.Death Rattle is slang for Extremely Successful.
> death rattle
Stock up 16% after hours.
It is a death rattle. For the short sellers, that is.
It's going to take a long time for alternatives to make inroads into Google.
There are lots of marketing dollars looking for a home, and Google is going to be one of the better bets for some time to come.
They may turn into a zombie but they won't die for a long, long time.
For example, cable companies still exist and have a ton of paid ads on them.
Fox makes $3-5B in sales per quarter: https://valustox.com/FOXA
Sinclair isn't doing so good but they're still selling in the hundreds of millions per Q: https://valustox.com/SBGI
With the amount of mindshare, infrastructure and over 90% of the search engine market share that Google has, it will take decades to even begin to challenge Google's market share in search.
We've seen this with Neeva which is now no more. Perplexity appears to be no different and only appeals to techies and at the same time is already dependent on Google search for their results, according to The Information.
In fact I can only see them getting shut down like Neeva or the case of Perplexity likely to be acquired. Amazon looks more of a potential acquirer for Perplexity AI.
They'll probably never budge from the top of the search pile.
But search itself may decline over time.
The same happened to everyone from steam train companies to Xerox to cable companies. These guys are next.
“If everybody sees it coming, it’s not coming.”
I don’t think so. All a startup needs to do is build 50+ data centers around world. Lay thousands of miles of terrestrial and under sea fiber optic cables. And finally build a browser and obtain 80% market share.
not just this - most android smartphones do have google search bar by default, in some it's not trivial to disable it and most ppl are using it. This alone is a huge moat. Add to this a huge nr of chromebooks that children use in schools (and after them too since the OS is familiar) - default search for these is google too. Default ff search engine - google, default iphone search engine - google. Every time someone buys an iphone, google gets one more user automatically. Some may switch, but absolute majority will still use default
> Alphabet’s Board of Directors today authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares in a manner deemed in the best interest of the company and its stockholders
The most important item on the report
Also...10,000 fired... Employees previous equivalent quarter:190,711 and now:180,895
Edit: 190,711 employees on March 31, 2023
Layoff is not the same as "fired". Please use the correct terminology in consideration for those who lost their jobs.
Also, the termination dates for those who were laid off in January 2023 would be around April 2023 (the layoff news came earlier due to WARN act), so the employee count as of 2023-03-31 might not include those people. This means a difference of ~10000 can be accounted for by the 2023-01-20 round of layoffs.
this isn’t a fucking HR email thread, fired means layoff in these lands
There's a meaningful difference between the two. You're fired for doing something wrong. You're laid off if the company wants to cut costs.
That is what corporate HR and Executives want you to think.
Layoffs can make it look like the company is having problems so instead of doing that they will create vague KPIs so that employees will not meet them so they can be fired.
That doesn't scale.
AFAICT, Google didn't go to the effort of creating vague objectives for people to fail at. Instead they've blanket cut teams regardless of their success or performance.
What you're observing is that companies lie, not that there aren't differences between the two.
whatever the drones command. end result is the same.
Have some respect. People lost their jobs. They weren't fired because they did something wrong, they were laid off because the company did something wrong.
im also being “laid off” buddy :)
In what world is “laid off” better than “fired”? Either way the company screwed you, doesn’t matter how they justify it
If you've been fired, it typically signals you had very bad performance or committed some fireable offense. If you were laid off, you were ostensibly just on the wrong team at the wrong time.
It's not about how you view your last employer, it's about how your next potential employer will view you.
And HR will do their best to find an excuse to turn "layoff" into "fire" so the company won't need to pay unemployment
2023-03-31 would have been after the last day for the January layoff group, at least for US workers not in the NY office.
Closest comparison is the last quarter were they ended with 182,502
Correct. Edited my comment to clarify number of 190,711 was as of March 2023.
People layed off (about 10,000) in Jan 2023 were still on the books in March 2023. Termination didn't take effect until April.
This happens naturally with turnover if they freeze hiring.
Exact same level of authorization in April '22 and '23
Why don't American companies pay dividends? I assume it's not tax efficient to pay dividends in the US?
If you as a shareholder receive a dividend of X% of the share price, you owe tax on it. But if the company buys back stock and as a result the share price increases by X%, you do not owe tax on that unrealized gain until you choose to sell your stock. That’s good for investors.
Also, dividends are taxed as ordinary income whereas stock buybacks lead to capital gains, which almost always have a lower tax rate.
Qualified dividends are taxed at the same rate as long term capital gains, although the rules for what qualifies can be tricky (special one-time dividends in particular).
Only if youve held the stock for less than 6 months. Most dividends are taxed at capital gains rate.
but there is no guarantee of a stock buyback increasing the stock price by x%, correct?
They are doing a dividend too.
MSFT pays dividends.
What an odd statement. Care to explain why you think a routine buyback announcement is important?
Stock buybacks are done when a company think either 1. they are massively under valued, or 2. when there isn't a better investment for their cash.
Google does it regularly as they pay out so much RSUs they want to keep the same number of shares on the market. You can look and see them historically doing this
A side effect is avoiding dilution from RSU grants.
Poster is correct: that is not the reason for them.
We can confirm this. Compare RSUs granted/year -- $150M -- to buybacks this quarter -- $70B. ~700x as much.
According to https://www.sec.gov/ix?doc=/Archives/edgar/data/0001652044/0... their stock-based compensation expense was $15.539b in 2023 (and actual repurchases were $2.324b).
Brief notes after spending 10 minutes figuring out how to get this, not nitpicking or saying you got anything wrong. Source was page with "54" at the bottom
- Unvested grants over 4 years vs. buybacks this year - #s are for 2020, not 2023 - # excludes tax witholdings (i.e. shares they'll never grant). - For 2020, grants of 15.539 - 10.273 witholding = ~5B, matching sibling comment's correction - $2.324B is one of 4 columns, real number is $50.274 B - so for 2020, real #s are 5.26B in unvested grants over 4 years versus 50.274B in buybacks that year. - for 2023, 22.578 - 10.164 = 12.4B in unvested grants over 4 years, versus 62B in buybacks that year
Where are you getting that $150M spent on RSU grants per year from? Unless I'm missing it, I don't see that in the report and it seems way too low.
Let's say the average engineer gets $100k/year in RSUs. (I would guess the actual number is higher.) That would only cover 1500 engineers.
You're right, it's too low, see link at bottom: my guess is the $2B number, inclusive of all granted but not vested, is the correct #.
In general people way overestimate the # of SWEs at Google relative to the employee #, even within Google.
I don't wanna get too cute in public but some fermi estimates including, say, number of employees per engineer at a 100 person startup, and a jaundiced yet correct view of how much is outsourced at a company with a lot of grunt level SWE work common to every company, bridges the multiplier from there.
https://www.sec.gov/Archives/edgar/data/1364742/000156459021....
It's in the earnings. It was $5.2B this quarter against $15.7B repurchased.
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At today's closing price this is 3.6% of outstanding shares
Do they mention what price?
Of all the people in this thread swearing they don't use Google, I wonder how many are writing their comments using Chrome (or Chromium, or Edge, or Brave, or Opera, or any other browser that uses the guts of the Chromium project)
"I don't use Facebook!" (goes off to check Instagram account)
I use DuckDuckGo for search, Apple Maps when on my iPhone, and Gnome Maps when on my computers. My main browser is Firefox, but I use Brave (Safari-based) on iOS due to better ad blocking there. I use local markdown files for all of my note taking, and Fastmail for email.
But I am aware that I’m not typical.
Firefox is funded by Google.
Apple gets billions from Google, funding quite a bit of their R&D.
Most of the open source software you use including the Linux kernel has a bunch of contributors from Google.
Going one step further, Google has a large hand in open standards for everything, from wifi to programming languages.
I'm not saying you should avoid these, it's just interesting that you can take so many non-typical steps to avoid google and still mandatorily have them involved in all of your technology.
Is it that interesting? How might you expect one to avoid Google's influence in standards? Whereas Firefox is one of the few mainline browsers that isn't directly controlled by Firefox.
In short, taking some of these steps is reasonable for a person, and some... are not. Painting it as some kind of moral hypocrisy isn't helpful.
I'd guess only a minority.
However, we should also remember that Mozilla's main funder is... Google/Alphabet, via a royalty deal for having Google be the default search engine. See, e.g., here:
https://www.bloomberg.com/news/newsletters/2023-05-05/why-go...
And while the royalties arrangement is not that old, Google was a main funder before that happened as well. FYI.
So far I've replaced Google products with Firefox (even on mobile), Kagi/DDG, Proton Mail, Simple Mobile Tools, my own FTP server, Emby, and F-Droid.
But I also still use Android, the Google Play Store, YouTube (via NewPipe), Google Messages, Google Maps, and Google Keep because I haven't found great alternatives. It's surprisingly hard to completely get rid of Google.
Don't forget.. As of February 2024, there are approximately 3.6 billion Android users worldwide, spread across 190 countries.
Eh, Firefox is blazing fast and readily available. Avoiding ReCaptcha on the other hand...
Wow they announced their first-ever dividend (following Meta which announced theirs last quarter).
Leading from behind.
yes, thank goodness Meta finally invented dividends.
was there a tax law change that motivated this versus more buybacks?
Yes, they've started taxing stock buybacks (albeit it started a year ago): https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-...
they're doing both?
Sure, but why do both and why now?
por que no los dos....?
My expectation is that whatever logic held up last quarter held up this quarter. It's possible the optimal allocation is some of both, but what's the tradeoff that would drive that instead of one being mathematically superior to the other?
fast follow ;)
A possible endgame of this quest for growth is just mixing unlabeled ads directly in with search content. Effectively pay for ranking with some quality filter. I'm pretty sure it won't come to that, but worse things have happened.
Like this? https://arstechnica.com/gadgets/2024/04/reddit-sneaky-ai-spa...
Injecting ads into the actual search results looks egregious today, but will be the norm later.
First they'll just insert them among the results but--no need to worry!--"clearly" labeled as ads. Then the labels get smaller and smaller. Like Quora, yahoo news, etc.
I meant the actual search results will be mangled to show ads. And that's where llms come into play: they can merge a quote from wikipedia with a pharma-sponsored ad.
In many countries this would be illegal for classic media.
Like this doesnt happen already and hasnt been the case for the last 10 years?
Personally I use google more/just as much for product searches; stores selling X, finding comparison sites, going to the manufacturers page for a product.
That and restaurants from maps.
I use it less for information based searches, but that almost seems to be a win from an advertiser perspective.
Google has been doing stock buybacks for years. Why are they pivoting to also doing a dividend too? Does a dividend give a bigger short term stock bump?
Buybacks are useful for many reasons, but one is that theyre good for people borrowing against their shares. If a lot of people have borrowed against their google shares and now that interest rates are high want to pay back the loan without selling a dividend makes sense.
Lots of other reasons too I think but much of it probably has to do with the change in interest rates.
Signaling that growth will be slower.
Sundar Pichai, CEO, said: “Our results in the first quarter reflect strong performance from Search, YouTube and Cloud. We are well under way with our Gemini era and there’s great momentum across the company. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”
The only one mention, it's strong position across conservative approach. A must have for any large multi national company like Google.
Up 15% after hours on news that they will begin a large cash dividend and share repurchase program.
They have have been buying back stock for a very long time
In fact they announced the same-sized buyback authorization exactly 1 year ago.
How much of authorization was realized in actual purchase last year?
Is this announcement a continuation of buybacks at the same rate, or just a renewal of the headroom?
Beats me. Their buybacks have accelerated over the last decade and were about $60B each of 22 and 23.
End of the day, for shareholders this is what matters. Not what products were killed, how many people were laid off, what ethical dilemmas employees face etc. are a distraction for them. This is what it has to come down to. It's not wrong.
Congrats to Googlers
so much for all the google doomers. Just goes to show how unintuitive all of this things are
Fascinating that they’re issuing a dividend. Can’t find anything better to do to drive growth?
Google has $100B+ of cash and is giving out $10B/yr as a dividend. I think they will be able to scrape something together if they have a good idea.
Yes - and what they’ve decided is a dividend. It’s the first in their history. I’m not saying it’s good or bad, but it’s something.
The interesting part is why they chose to issue a dividend instead of sticking only with a theoretically equivalent buyback.
Put money in Larry and sergey's pockets without them having to sell any shares?
That’s not a terrible guess. Together they own 56% of the voting shares and maintain control of the company. A divided puts money in their pocket without needing to sell any of their class B 10x voting shares.
It is $300B/year company growing at 15%. I don't think growth is an issue here
Better
I’m a Googler who doesn’t do anything remotely close to setting capital return policy. Just remember Alphabet has been buying back 10s of billions for a while. Dividends are just a different capital return mechanism.
Importantly, dividends devalue issued unvested RSUs.
I though this was the case, but Googlers will receive Dividend Equivalent Units on unvested GSUs on each dividend payment date.
Could you please expand on this? If a person got issued RSUs but they have not vested yet, wouldn't they be happy that the RSUs are going to be worth more by the time they get vested?
No, because they would be worth the amount less the dividends during the vesting period.
In a vacuum where precise numbers do not exist, maybe.
In this real scenario, if someone's goog shares were vesting at an earlier value - let's take a rough average at a glance of goog YTD to be $145, they will have lost on a year's worth of dividends at $0.2 per share. However, the current share price is $175.
So, through this maneuver, a person holding N goog shares will lose at most 3 quarters of dividends: N * 0.2$ * 3 = N * 0.6$
But they will have gained whatever the stock has appreciated, which at this moment in time works out to: N * (175-145)$ = N * 30$
What am I missing which would make the scenario above result in OP's claim of "dividends devalue issued unvested RSUs"?
EDIT: This also fails to take into account "Dividend Equivalents (DEs)", which are not factored above, and would yield extra income to the person that owns unvested shares.
Corporate finance theory says that when a dividend is issued, the price of the stock goes down by an equivalent amount.
Dividends were originally the main point of owning corporate stocks in the first place.
Dividends started in 1602 with the Dutch East India company. However corporations with shares predate that somewhat. So it wasn’t technically the original point.
They are growing as fast as they can in terms of data center and GPU output. They're supply constrained.
Where would you spend that cash?
They already have >150k employees they can redeploy at will to enter any new market.
It's not like they can make any major acquisitions in this political environment.
Facebook did it, so they will follow.
Yeah, they should spend it making 5 new chat apps.
Google released their latest chat app 7 years ago.
Or halting the layoffs.
This has nothing to do with layoffs. They have plenty of money for salary even after these payouts. The layoffs are intended to reduce costs / increase profit. Google has no desire for employees; they only have employees insofar they are a necessary expense.
Once upon a time it was said by Google leadership the biggest cost Google pays is opportunity costs, chiefly in the form of projects and products they don't pursue.
And back at that time they had way fewer employees than they do now, so that made sense.
Why halt them with performance this good? Maybe there isn't a useful role for that many people at Google as-is
Why? It’s not a charity.
Funnily enough, Peter Thiel called this years ago.
The dividend is interesting. Why not spend that to further grow new businesses for Google? Is it signaling that they're not unfairly using strength in one market to take over another?
It helps add stability to the value of the stock, in simple terms. I think it’s good for a company like Google. A bad demo can crash the price 20%. That makes the dividend yield go up, which makes the stock more attractive. Plus, if you hold for years and years and years you get actual income.
It signals they're pandering even more to Wall St.
Oh wow, I didn’t know their domain name is abc.xyz, that’s beautiful.
They really live or die by Ad revenue...
Extrapolated annually, that's about 320 Billion. Even if you want to normalize it by number of employees, it's it's over 1.7 Million USD/capita .
Capitalism is nuts.
Stock is +13% after hours so far.
Looks like all those $ that pushed down META are flooding into GOOG.
meta.ai and groq, even bing copilot work for me. Google usage for me has reduced a lot. As such I’m not optimistic about google’s search business.
Does Google monetize searches for code stuff?
Interesting that they think they're out of internal projects and acquisitions to (profitably) spend money on. Even more interesting that the stock seems to agree -- I guess investors already believed that growth is over, and are seeing this recognition of that as an alignment between reality and internal strategy.
This is current position in the US economic cycle imposed by the Fed. High interest rate, low investment. Return to safety.
The only major investment left would be computing infrastructures, but it's severely limited by supply. Even if Google wants to spend more money, simply there's no chips to buy. I don't see any significant future investment opportunities other than Waymo in the foreseeable future, but it seems still far from scaling out.
Google is in the fortunate position of having their own in house AI compute modules (TPU's) that are more or less on par with Nvidia chips.
They might have to compete for foundry time, but it's better than having to compete for AI chips.
> Even if Google wants to spend more money, simply there's no chips to buy.
This strongly suggests that there's an opportunity to spend money relaxing this shortage. If your business growth is being throttled by suppliers, then investment either allows you to grow those suppliers, or vertically integrate them out of the picture.
You can't just create new supply. Chip fabs take multiple years to spool up. You also have to get the machines to make the chips and guess what, those are supply constrained too.
It's not a problem you can simply spend money at, it's a global supply chain problem with many disparate companies each with their own constrained supply chains.
Yeah, I think Google should be actively working on addressing shortage. But I don't think this can be solved in the short term even with infinite capitals since ASML is the fundamental bottleneck and everyone is competing for the same limited capacity.
There is a $6B increase in purchase of properties and equipment vs. 23Q1.