[Periodic]

So many companies try to emulate how Google works. There are multiple books, hundreds or thousands of articles. People speculate on the perks, the review structure, the hierarchy, the autonomy.

However, when other companies try to imitate Google they always fail because they're missing a crucial piece:

Billions of dollars in ad revenue

Google doesn't work the way it does to be successful. It works that way because it is successful.

I found this no more evident than when I worked on Google Search itself.

[matwood]

Reminds me of Valve's no manager management style: https://www.bloomberg.com/news/articles/2012-04-27/why-there...

When you have a lot of money, a lot of things work because you have a lot of money. You often see the same thing with people trying to emulate pro-athletes training methods. A genetically gifted pro-athlete can often succeed in spite of their training, and not necessarily because of their training.

[thearn4]

The endless spigot of cash from Steam is something that does enable Valve to take some very experimental leaps (VR, Steam machines, SteamOS, etc.)

In my opinion, Valve also has the same shortcomings as google: practically zero customer support, and an un-curated app platform full of shovelware (finding gems on the Steam and the Google Play & Chrome Web Stores can be tricky).

But there is still a ton to admire in both organizations.

[halomru]

Valve's platform full of shovelware is due to (perceived) consumer demand, not because of size or cost reasons. Steam used to be very selective in who gets in, and people complained that a lot of small developers were left out. So Valve added the greenlight system to let the community find the gems that Valve should let in. People still complained that too few games got in. So instead valve made major changes to improve recommendations and reviews and to establish a community of curators, and then opened the floodgates.

[oxide]

Over 40% of the titles on Steam have been added in the past year alone.

The floodgates need to close, now. As someone who has voted on hundreds of Greenlight titles, Greenlight is an abject failure IMO. It's flooded with garbage, the first few waves of approvals gave us some great titles that otherwise would have never seen the platform, but now it's a nightmare. There are no more approval lists. What's worse, it's the only way onto Steam. Your indie gem is just as likely to be lost in the shovelware noise as the latest idle game ported from mobile.

Anyone with $100 can post games there. Anyone with more than $100 can purchase a service which votes their pre-purchased unchanged asset pack "game" through Greenlight. It's ridiculous.

Tags and abandoned curator lists are not a solution to hundreds of shovelware titles clogging up the new releases section IMO.

Unfortunately, nothing will change until something comes along to replace the current system entirely. Valve will act when they are forced to act, not before.

[the8472]

> The floodgates need to close, now.

Why? The internet itself is an open, uncurated platform.

The basic ability to publish things and finding good content are two separate problems. Don't try to solve one by restricting the other.

[EpicEng]

Steam != The internet. No one is preventing people from marketing their crappy games on their own. I have to dig through a mountain of shit in hopes of _possibly_ finding something worth playing. It's bad for users.

[phil21]

So you're saying I should publish on the open/free Internet, and use a custom app to find good content?

[dleslie]

One person's shovel of shit is another's gem in the rough; and Valve wins because it accepts this.

I have paid for, and not returned, numerous bizarre or niche indie games that are slayed in their reviews; whereas I've returned more than a few Overwhelmingly Positives heaping shovelfulls of mainstream schlock.

It's part of growing your userbase; you lose its initial narrow focus of taste.

[shuntress]

You don't use steam to find gems. Steam is just where you go to buy them.

[robryan]

The user review system for games is the best I know of and arguably more useful in deciding what to buy than critic reviews.

Steam is also constantly promoting new games to you and making suggestions based on what you currently play. There is also the social aspect in that you can see who is playing what, leading to new discoveries.

[iamatworknow]

Why does it seem like every review I read is basically a joke by someone with 1500 hours in a game saying simply "it's pretty good" or conversely someone with 2 hours in a game that writes an entire novel about how let down they were when they barely scratched the surface?

I will admit that at least having the verifiable length of time a reviewer played a game helps, but I don't find the reviews themselves to be all that worthwhile for most games.

[NTripleOne]

Why does there even need to be a full review when someone has spent 1500 hours of their life playing it?

If it was worth 1500 hours of the reviewer's time then it's probably worth 10-50 of a potential buyer's.

Inversely, I don't need to play a bad game for 1500 hours to decide that it's bad. I played 60 minutes of No Man's Sky and you'd have to pay me to play a single one more. Does that mean I should be discredited from voicing my opinion?

[s_m_t]

Once you've played a ton of video games you can easily judge most games by their game play aspects within 2 hours.

The exception would be with highly competitive multiplayer games, and even then you can quickly get a very good idea.

[BoysenberryPi]

Someone said this on another forum and I disagree with them as I disagree with you. I've found plenty of games through Steam that I wouldn't have known about otherwise.

[civilian]

I also find games through Steam, but I do wish I found games through a different avenue. I've also had to promise myself that I'd strongly vet any early-access games I was buying. I've just been burned too many times.

[npunt]

This. Discovery is a rather unique activity that has a wholly different set of details / constraints / etc. Way more social and content driven. Every store & platform out there does its best to accommodate discovery (and sometimes succeeds), but this is secondary to things like maintenance/updates/cust svc, providing relevant product information, and managing transactions.

Steam isn't bad at discovery, but because they're not creating much original content and their UI is janky, they're also not that good at it.

Source: created comprehensive database of education technology products [1], and while we made best attempt at discovery, we learned pretty quickly it was secondary in importance to having comprehensive info.

[1] https://www.edsurge.com/product-reviews/

[VikingCoder]

Why don't they let people offer curated lists, right in Steam?

[fudgie]

They do - http://store.steampowered.com/curators/recommendedcurators/

[halwa]

They do, you just need to be the owner of a Steam Group. http://store.steampowered.com/curators/

[paulcole]

>the same shortcomings as google: practically zero customer support

As someone who pays for AdWords, I have no problem getting someone on the phone to help when I need it.

[Black-Plaid]

I imagine that most people don't realize they are not Google customers. If you have paid Google money, then you are a customer. People using Google's 'free' services are not. Only customers will get good support.

[voltagex_]

>If you have paid Google money

If you've paid Google enough money. I have to keep paying $6AUD/month unless I want to lose $300+ of Android apps forever (Google Apps for Work). No chance of transferring them to another account (I'd pay $100+ for this)

[tln]

That is a curious situation. Have you really paid for $300 of apps for yourself?

[flashman]

Yet if your Google account gets suspended for some reason, you'd better have a contact at Google or you're in a world of pain.

[bbctol]

They said customer support.

[muse900]

This is so true especially for valve.

They have a gem game called Counterstrike Global Offensive which is their 2nd biggest game after dota2(which is free), and up to a half a year ago that I was playing, we all thought (me and reddit) that they had 0 devs working on it.

Bugs were all over the place, noone was taking action into fixing them, releases were every once in a blue moon including just new skins that were content created by players etc.

Now of course the game has evolved and there are some new developers trying to do something with it but its funny to think that a game of that calibre that returns prolly billions in revenue has pathetic support.

The only gaming company I've seen keeping up with what they make is Blizzard.

[deadowl]

Are you kidding me about Google customer support? They're the only company that ever solved my problem with a Linux question, and later helped me when I purchased a movie on YouTube on an account I didn't intend to purchase on. They might not provide great customer support to some market segments, but when it comes to the end-consumer, they go above and beyond.

[jcrawfordor]

I'm kind of astounded to hear anyone speaking positively of Google support, and certainly my experience trying to get support and even pre-sales on Google Apps has been miserable - a lot of filling out forms (often slightly broken ones) and never hearing back. Most notably, someone once started spamming an organization I worked for from Gmail by just pasting hundreds of addresses into the To:. Over a year of multiple abuse reports from multiple people and they were still going, and the abuse report form had broken validation so that having the headers too long (because of the over 300 recipient addresses) resulted in a message that the headers field was empty. This is where oddly typical of my experiences with them.

This makes me think that it's rather particular to the product. YouTube was acquired and now has a significant focus towards consumer sales via movies and Red, perhaps these two factors have lead to a significantly different culture surrounding support?

[astronautjones]

If the op was talking about AdWords, he is wildly correct

[Kurtz79]

"In my opinion, Valve also has the same shortcomings as google: practically zero customer support..."

This strikes me as something you can afford because you are in a factual monopoly ("You are not OK with our service ? Find an alternative... whooops :)"), rather than just having a lot of money.

Steam benefits from the fact that even people not completely happy with it (personally I have no complaints, but I use it exclusively as a store/launcher) are already invested in the platform, and do not want the hassle of dealing with two or more similar services, so they are wary of any alternative that might surface (see Windows store or proprietary stores like Origin).

[adnzzzzZ]

The store letting more games in now is intentional. From a Valve employee himself: https://www.youtube.com/watch?v=XGCyfEYfLks#t=5m40s

[rqebmm]

Valve also has the prestige of being a high-profile gaming company, which brings with it choice pick of engineers. A "normal" enterprise app consulting shop doesn't have the luxury of every computer geek clamoring to work there.

If you have first-pick of incoming talent, it makes sense that you can get away with giving those employees an extremely high degree of autonomy.

[kohanz]

Is that really true though? I remember when me and my engineering peers were in our teens, some of us dreamed of working for a gaming company, but now that we're older no one does. Most actually have a very negative perception of employment conditions in that industry.

[dpc59]

The reason why there is a negative perception of employment conditions is because employment conditions are not very good, and they're not very good because a lot of people want to work in the industry.

[kohanz]

Yes, but that demand isn't coming from everyone, it's coming from a certain demographic (young people that are into games). Having your pick from that demographic is far from having "choice pick" when it comes to the overall talent pool. And we haven't even talked about attrition.

[milcron]

I for one would prefer to avoid the gaming industry, but would not turn down the opportunity to work at Valve.

[chipperyman573]

Game development is what gives the games industry a bad name. While valve is supposedly working on a few new games now[0] and updating 3 of their older games (tf2/dota 2/cs:go), it would be entirely possible to work exclusively on Steam (their online store) and never touch game code, especially with their rolling desks that literally roll so you move to whatever department you want, whenever you want.

[0]: https://www.youtube.com/watch?v=5fSt7BjJ29c

[jon-wood]

My perception is that Valve are the exception to that rule. They've got the money on tap from Steam, meaning their game development side is more of a hobby than anything else, giving a lot of freedom to the teams working on new games. I could believe it's a bit less rosy working on new hats for their Avatar Dressup games.

[SXX]

Actually Valve no longer make these "hats". Most of items that included in content updates are created by the community.

[ghaff]

It's very tempting to look at successful companies and identify their traits as key success factors. There was a very popular business book in this vein in the eighties called In Search of Excellence. The problem is that for every success characteristic you can usually find another successful company with a diametrically opposite approach or a company with a similar approach that's going bankrupt.

[dredmorbius]

Tom Peters.

[user5994461]

I think you and the parent commenter are missing a critical points.

These companies were successful because of what they were, and they continue to be successful because of what they are.

It is a virtuous circle living on money, people, management and many more characteristics that go together.

[dionidium]

They aren't missing that point. They are making the opposite point. Google had a great product at the right time and they executed well. Now it makes billions. All the other stuff is most likely incidental.

[user5994461]

And I'm making the point that they executed well because of what they are, and were from the start.

Google didn't suddenly transformed to being Google overnight the day they reached the first $1B.

[sbov]

How many successful companies do the exact opposite of Google? Have you done any research to determine which company succeeded: in spite of, because of, or no effect, from these models? What about the - surely - hundreds or thousands of companies that failed with Google (or not Google's) model?

Trying to imitate success seems to turn into a cargo cult. For whatever reason people seem to shutoff their brains when talking about this.

[dmix]

Most of the attributes in question (office environment, perks, etc) are just semantics around the product/market. The semantics matter a lot especially when your team is critically dependent on a high-turnover potential staff and require talented smart people to stick with your company, or they need an environment that helps them be creative and think out hard problems.

It's similar to questions of programming language, infrastructure options, etc. They are important supportive aspects to the core business but mostly the core of the business could still operate even if those supportive aspect were mediocre/non-optimal - just not as effectively. On a longer time scale that stuff starts to matter in a highly-competitive market.

Most startups and small businesses don't really have those issues, or at least they aren't critical at that stage of the company when the core business hasn't been figured out. So emulating them at a high cost is a bad idea.

The context of everything is important. Sadly most advice dolled out in business books is extracted and formalized without considering the context of where it worked and why.

[htrp]

>How many successful companies do the exact opposite of Google? Have you done any research to determine which company succeeded: in spite of, because of, or no effect, from these models? What about the - surely - hundreds or thousands of companies that failed with Google (or not Google's) model?

Do you know of any examples offhand? Definitely agree that it's a virtuous cycle of talent -> revenue - > perks -> talent

>Trying to imitate success seems to turn into a cargo cult.

Love the apt description of this.

[monksy]

I would agree with that. They didn't go in trying to make a billion. They made a product(s) that are worth billions.

[Qwertious]

Except, Valve's cabal system was in use for the development of HL1, and of course they didn't have buckets of money before HL1.

[dimino]

I don't think that's quite right, though the message ends up being the same.

It's not the genetics that matter, it's the years of training leading up to the current workout routine, not to mention the pro athlete's knowledge and understanding of his/her own body, as well as the dedicated free time to put into a workout that needs that kind of attention in order to succeed.

When you have all day, and you like working out, you can do things that don't normally make sense and still see results.

[ChuckMcM]

This is exactly correct. If you have a printing press that is dumping a couple of billon dollars into the basement every quarter in spite of what you're spending, you have the luxury of trying all sorts of novel things from a business perspective.

That said, the margins on the search advertising business are shrinking, and have been for years now. You can cover for that by eliminating profligate spending and then eventually you can't. I think Ruth is the right person to handle that transition but its going to hurt in terms of people feeling that "the magic is gone."

When that happens, Google is going to have to start rewarding operational efficiency gains at least as strongly as they currently reward popular science project type gains. And then it will be very interesting to see how they change and if the era of "but Google offers its employees ..." will be over.

I hope the free sodas stay though.

[rsync]

""the magic is gone.""

Not only is the magic gone, but the boring, day to day fabric of functionality is gone.

Have you tried to really search for anything with google in the past five years ?

I don't mean meandering, aimless, consumer-centric searches like "new fitness watch" where any result tangentally related is useful ... I mean a specific, meaningful, concise search with multiple keywords, all of which are key words ... and the resulting pages do not contain one or more of those words.

I know all about allinsite: and quotation marks and so on ... those are, as far as I can tell, randomly interpreted by google. Who knows if they even work, ever.

A front page item on HN a few days ago asked what people would pay $1000 per month for ... I would pay that to have search with full control over search results with logical operators that actually worked.

[guycook]

I know exactly what you mean. "Half" "of" "my" "searches" "look" "like" "this" "these" "days". I can understand throwing out one of many keywords when I'm down on page 6, but when I search with only 4 terms and the very first result has 2 words s̶t̶r̶u̶c̶k̶ o̶u̶t̶ I start to wonder who exactly this search box is for.

[mojuba]

True, and one other thing I've noticed is e.g. "Half of my searches" can bring say 200,000 results, but "Half of my" yields 50,000. A few other weird things that's been there for years and nobody seems to care. As long as consumer-level searches work and ads are clickable, Google's clock is ticking.

[gniv]

I wouldn't put too much stock on those numbers. They are probably statistical estimates, not actual counts.

[lobster_johnson]

Under "Search tools", click on "Verbatim". It will cause the query to actually honor the words you typed.

[swang]

does this honor typos? i like spellcorrect changes but i hate all the other assumptions they make about my search terms.

[lobster_johnson]

It will show a "Did you mean:", but doesn't automatically rewrite it. Example:

https://www.google.com/search?q=gam+of+throes&tbs=li:1

[niels_olson]

I just searched for "Calcifying Fibrous Tumor", and got exactly what I wanted, the most recent review article on that tumor. What are you looking for?

[ChuckMcM]

"best free credit card" :-)

[paulcole]

> meandering, aimless, consumer-centric searches like "new fitness watch" where any result tangentally related is useful

I would wager that this describes a shockingly high percentage of the average person's searches. I know it's true for me.

[l33tbro]

This was a decent thread lamenting Google of yore.

https://news.ycombinator.com/item?id=9565464

[patrickk]

> A front page item on HN a few days ago asked what people would pay $1000 per month for

Somewhat meta, but I cannot find this item on https://hn.algolia.com or using a Google search ("site: news.ycombinator.com $1000 for") can you post a link if you have it?

[mkl]

I found it with Algolia using [ask hn pay]: https://news.ycombinator.com/item?id=13114954

[patrickk]

Thanks! I noticed it's "$1k/mo" so I suppose it's difficult to chalk this up to the google algorithm ;)

[AznHisoka]

i share the same experience. i have been using google to find articles that share a specific opinion so i do very specific searches in hopes of finding editorial opinion pieces. what i get back are lame how-to guides and wikipedia articles.

[knight17]

Earlier they had a blog search option which I used a lot to find pages written in a personalised style, but they shelved this. Now there is no way to find such pages under the current system other than trying yor luck with searching for site:blogspot.com and site:wordpress.com; but these two blog hosts are not even half the universe of all the blogs out there.

What I do now is to create a Google Custom Search Engine with all my RSS feed subscriptions; it resembles this earlier feature as I feed it lots of personal blogs that I read, but it is not even close to the earlier blogsearch.

Similarly there was a discussion/forum search which was also useful; that too was removed.

[Arjuna]

"I hope the free sodas stay though."

For those that are not aware of the reference here, you will enjoy reading Steve Blank's post entitled "The Elves Leave Middle Earth - Sodas Are No Longer Free."

https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...

[technobabble]

Wow, thank you for the article, I've never read it before.

This happened at the Bike Cooperative I used to work at; everything was informal, but we were able to focus on weird types of bikes and recycling projects that were interesting to us and subsequently we'd dedicate hours to do them. Unsurprisingly, the management came in, and we were wrench monkeys like everybody else; not so say that we were whiny because we didn't feel like "special snowflakes. We lost freedom to focus on our strengths in the cooperative.

[nunez]

Awesome article.

[RandomOpinion]

>When that happens, Google is going to have to start rewarding operational efficiency gains at least as strongly as they currently reward popular science project type gains. And then it will be very interesting to see how they change and if the era of "but Google offers its employees ..." will be over.

One has only to look at Microsoft to see an example of what might happen. Things were very carefree there as well back in the '90s during their heyday when growth seemed limitless.

It's also interesting to contrast Google / MS with Amazon, where Bezos has kept a tight rein on operational efficiency all along. They probably won't suffer as much when they reach their growth ceiling.

[ChuckMcM]

Agreed, and studying companies that have come through the transition to the other side is very useful. Particularly telling is how people describe what they "like" about work.

[sdenton4]

I dunno, man; I already hear a lot about suffering at Amazon...

[_audakel]

http://www.geekwire.com/2016/report-amazon-employee-jumps-of...

[nir]

Do people in Google still think the magic is there? It seems like a great place if you want stability and a nice salary, but obviously (unless you're in the comparatively tiny X dept) you're going to be a very small cog in a huge machine?

[ihoz]

I know many people at Google Boston (Cambridge). They are all bored out of their skulls.

One guy says how he works 30 hours in a busy week and uses his 20% time to hit the gym.

But in another's words: "how can I leave when they pay me so much?"

[tytso]

I work at Google Cambridge, and I'm easily working 50+ hours a week. I work in Technical Infrastructure (on our storage systems in our data centers) and one of my 20% projects was to design and architect the underpinnings of what an Android Product Manager has claimed to be one the most important features of Android N (file based encryption), the open source incarnation of which (ext4 encryption) has turned into a generic file system encryption mechanism that has enabled encryption for f2fs and soon ubifs, and has inspired the btrfs and xfs folks to look at file system based encryption.

For my "official" 80% project, in order to get approval to go into the planning phase for a complex, multi-year project, we had to demonstrate how it would save hundreds of millions of dollars on an ongoing basis, and show how the TCO savings would be many multiples over the software engineering costs to implement said project. So in Technical Infrastructure, we do very much care about operational efficiencies --- that's how Google Compute Engine (which is driven by TI) has been able to cut its prices and inspire the market to follow suit.

And this is not new, by the way --- the whole time (coming up on 7 years) that I've been at Google, we've always been very interested in bringing costs down, and the team was amply rewarded when we rolled out ext4 across the production fleet, because we could accurately quantify the performance benefits, and how that translated to dollars saved to the company.

And so no, I'm not bored. In fact, one of the great things about Google is that I have flexibility to do things that help move the industry, both in Google products and in the Open Source world. This includes serving on program committees, working with a graduate student on a paper which we've submitted to the Usenix FAST conference (fingers crossed, we'll hear soon if it's been accepted), do presentations of my work at LinuxCon, etc. etc. Of course, I probably should be carving out some time to hit the gym, just for personal health reasons....

[ChuckMcM]

I just love the dissonance of "I'm easily working 50+ hours a week." and "one of my 20% projects".

When you say it "You'll be working 40 hrs a week and to be successful you'll need to spend an additional 25% of your time coming up with other stuff that helps us." it doesn't sound quite so magical :-)

That said, when I worked there I quickly realized that with no trouble at all I could spend all my waking hours in the office playing with the neat things that are made available to employees. It doesn't feel like overtime when its something you would do in your free time anyway.

The sticky bit is that you don't get profit participation in the financial upside of those extra projects.

[tytso]

Sure, but a lot of these things are things I was doing anyway when I was working for MIT and earning a five figure salary. When I moved out to a startup (VA Linux Systems), I more than doubled my salary; and when I went to Google I took a significant step up in compensation over my previous job at IBM --- and yes, I'm still doing the things that I love to do.

So it's not a matter of doing things because it's needed to be successful (although they won't hurt when I'm next up for Promo, I'm sure), it's the fact that I get to help influence the industry. As far as profit participation is concerned, I'm paid plenty enough to be comfortable, and I'm used to the concept of the financial upside coming indirectly from what my open source activities (e.g., ext4 maintainer, being on the program committee of ATC and FAST conferences, etc.) do for my personal brand. Yes, I'm not going to have the money of say, a Peter Thiel or a Larry Ellison. I also don't have to worry about having all of that money turning me into an *sshole, either. :-)

Am I aware that I'm trading off potentially being able to earn even more income in exchange for more security and the freedom to choose what I do (and the fact that I can find choices that help out the open source projects that I care about _and_ which result in benefits to my company is something I consider a feature, and part of the value I can bring to my employer)? Of course. Sure, I could probably earn more by working for a high frequency trading firm. But I'd lose a lot of freedom. More importantly, what working on moving the poles of the US financial system to the right-half plane would do to my soul isn't worth the extra money it might bring in.

[hobo_mark]

However, for those who are not aware: https://en.wikipedia.org/wiki/Theodore_Ts'o

In other words, very much an outlier, even at Google! :)

[tytso]

Last year, when I was attending our Storage Infrastructure roadmap/planning meeting, it was very humbling because there lots of people in the room that were way smarter than me. Which is the other really great thing about working at Google; unless you're someone like Jeff Dean, there will be lots of people smarter than you that you can learn from, and the default assumption that you can make is that your colleagues will be very talented.... so I'm not sure how much of an outlier I really am!

[vidarh]

Already 5+ years ago, I talked to a director at a recruitment company in London that loved Google, because they were easy pickings to find good candidates to place in the roles he had because they were all - in his words - disillusioned - and at the same time the "Google" on their resumes still made his clients all starry-eyed. He saw recruiting people out of Google as easy money.

[trhway]

Montessori for adults.

[mikelevins]

"the magic is gone"

I first went to work at Apple in January of 1988, at the end of the era that Woz described as making whatever they felt like and throwing it over the fence to ravening crowds who were throwing bales of money over the other direction.

Some time in the first few weeks I was there, my department head convened a staff meeting to explain that they were going to try a new concept that Apple had never tried before. "It's called a 'budget'," she said. "We try to guess ahead of time what our plans are going to actually cost."

At some point someone asked if that meant that regular meetings would no longer be catered. The answer was, "of course not. We have to have some way to get people to show up."

[dalbasal]

How/why are search margins shrinking? Is it getting more expensive to deliver search? Online ad spending is going up, not down.

[ChuckMcM]

What Punch said, basically its a maturing of the Internet Advertising market, the early enthusiasm for lots of metrics on engagement being dampened by a gradual understanding of click fraud. This is reflected in Google's financials as a falling 'cost per click' (what Google gets for an ad click).

The other factor is that Google search has been slowly losing its quality edge on its competitors and so services like Microsoft's Bing start developing more significant inroads, the combination of more market share and higher CPCs on Microsoft's service lead it to be profitable last year[1]. And the reason is in part because Microsoft can preferentially send search traffic to their properties, but it is also tied to the fact that consumers don't then switch their search provider later.

To counter-act that Google has been paying more and more money to third parties to send search traffic their way (this expense is called 'traffic acquisition costs') and Google was horrified when Oracle's lawyer disclosed that they were paying Apple a billion dollars a year for their search traffic[2]. They paid millions to Mozilla to send their search traffic to Google [3] and had a material dip in traffic revenue when Mozilla cancelled that deal[4]. What the author of the article in [4] did not realize is that all of Yahoo!'s search traffic is in fact served by the Bing index and servers. Yahoo! hasn't had a native search service since they agreed to send it all to Microsoft. So Bing+Yahoo! market share is really just Bing market share. That money paid, their TAC, comes right out of the profit margin for their ads

At the end of the day this is neither good nor bad, search is being commoditized. And as it commoditizes that puts pressure on margins since discrimination based on cost always puts pressure on margins. Eventually Bing and Google will be equally expensive from an advertiser point of view and the one with the best operational efficiency will make the most profit. Neither of them will be able to use "excess profits" to fund moonshots.

That is why it is so critically important for Google to find additional viable businesses to augment its search advertising revenue.

The current road leads to a very un-fun place to work, long hours (maximize work done for salary paid), few benefits (reducing costs), and little room for new development. They won't end there, it's like saying if you drive west in the US and never turn eventually you'll drown in the Pacific ocean, it's true but there is always a turn before that point. But if Google of 2003 was one end of the spectrum, Google is inexorably moving toward the other end. Ruth is there to make sure what's left is still a viable business that deserves a high stock price.

[1] https://techcrunch.com/2015/10/22/bing-is-profitable/

[2] https://www.bloomberg.com/news/articles/2016-01-22/google-pa...

[3] http://www.pcmag.com/article2/0,2817,2398046,00.asp

[4] http://www.geekwire.com/2015/yahoos-deal-mozilla-draws-searc...

[MarkMc]

Here is Google's net profit margin for past 4 years [1]:

2013: 22.9%

2014: 21.4%

2015: 21.7%

2016 (9 months): 22.0%

It doesn't look like profit margins are under strong downward pressure. But a better metric would probably be 'revenue per search query' - I don't have any recent statistics, but if Bing can close that gap it will reduce Google's margins when bidding for search traffic from Apple and Firefox (and maybe force Google to increase the percentage of AdSense revenue they give to website publishers). But even then, Google will still have three significant advantages to avoid the complete erosion of their margins: (1) Android; (2) Chrome; (3) The Google brand (I'm sure that more people try to change the default search engine on their new Windows computer than try to change the default search engine on their new Android phone).

Also, Bing would probably not be profitable if it was a separate company and had to pay Microsoft for the privilege of being the default search engine on Windows. Bing+Yahoo seems to be growing market share, but I wouldn't expect them to completely close the gap with Google in the next 20 years because Google's ownership of assets like YouTube, AdSense, Google Maps, Android and Chrome.

Google has all my search history, a list of all the AdSense websites I visit, my YouTube history, my location history, ten years of my email history and my Play Store purchase history. And for any given search query I perform, Google can access a larger pool of similar search click history from other users. How will Bing ever overcome all these disadvantages?

[1] Derived from https://www.google.com/finance?q=NASDAQ%3AGOOGL&fstype=ii&ei...

[ChuckMcM]

It is so much more nuanced than that. That number is essentially manufactured for the street (and before anyone jumps down my throat about being some sort of conspiracy nut let me explain).

Early in Google's life there was an article which asked the question "Is Google's gross margin 100%?" It went on to observe that Google had overhead, staff, facilities, and monthly recurring costs like electricity and phone bills, but every advertisement they 'served' cost them essentially no delta in their overhead, so their "cost of goods" when looking at the business through the lens of the goods economy[1] was zero. And any revenue they generated by selling a "click" (their stand in for a widget) was 100% gross profit. As a result, using old school goods economy accounting rules, profit is entirely a function of how many clicks they "ship" and there are many knobs to adjust which boost how many clicks they ship. They include, but are not limited to, putting more ads on their own pages and buying traffic to point at their pages with ads on them.

But when you evaluate their business using the principles of information economics[1] you see that they do have costs and their core product's value is eroding.

To understand that statement, you have to ask "what does Google actually sell to advertisers?" An 'ad unit' or an 'ad word' is the name but what is it really? My claim is that what they really sell is a piece of very valuable information that is hard to get. They sell "this person has just looked for this good or service, now who wants to respond?" They create that information by providing a portal that people can write in a question.

This "solves" for advertisers their biggest ask, that a consumer looks at their advertisement exactly when they need the good or service that advertisement is promoting. You can put an ad for a sports car in a magazine about cars, you can put an ad for a sports car on a television show about cars, but that pales in comparison to the idea of putting your ad for a sports car in front of someone who has just asked "What's the best sports car?".

I think that it is pretty easy to see the value there to advertisers, they would rather spend money advertising to people looking for their products then advertising to everyone and hoping that some of them want their products. What is more is that it works well and that is why it has become a major force in advertising. It is also an interesting measure of the value too advertisers.

Advertisers will constantly evaluate what it costs to advertise against product sales or market penetration or market visibility. They have a limited budget to spend and they want to make it count. That sets up the traditional economic forces which demands they allocate their ad spend capital wisely to get the most impact. Google, unlike a television network or magazine, brought into wide use the notion of an auction that happens at the decision point, between potential advertisers on what they would pay to have their ad shown, and where it would be shown, in the search results for a given query. In an information economic sense this gives us the fundamental value of the information that Google sells.

The key being that all of the knobs that Google has at its disposal will eventually be turned to their maximum point, and if CPC keeps falling their profit margin will too. Because Microsoft's CPC number is going up their margins will continue to increase. At Google's current rates they will eventually be buying so much traffic and putting so many ad slots on their own sites that non-"free" services will appeal to more and more people which reduces the number of eye-balls on a Google ad which reduces its value to advertisers still further. If Google reaches the point where they are no longer able to adjust their traffic mix to achieve their numbers, they will be in a very tight spot.

[1] The "goods economy" is the system of directing capital into the production of goods. The "information economy" is the system of directing capital toward the disclosure of information.

[MarkMc]

I agree with your analysis that Google basically sells "this person has just looked for this good or service, now who wants to respond?". But you seem to be ignoring the large, persistent information advantage that Google has over Bing.

Consider 3 scenarios:

1. Person A just searched for "What's the best sports car?".

2. Person B just searched for "What's the best sports car?". He's a 45-year old man who works for an insurance company in New York. He has a wife and three kids, but he recently started seeing a 28-year-old psychology grad student in Chicago twice a month. Two years ago he bought a $6,000 watch for his wife's birthday.

3. Person C just searched for "What's the best sports car?". He's a 23-year old man who lives with his parents and does not have a wife or girlfriend. He works for Walmart and has just been promoted to manager. Nine months ago his friend bought a Subaru WRX.

Now consider what types of advertisers will bid for each search. And perhaps more importantly, what types of ads and landing pages will be offered for each search. Clearly, having detailed personal information is a significant advantage when deciding which ads to show to a user. Google has that advantage and doesn't look like giving it up any time soon.

However, I can think of two pieces of evidence against this argument: (1) Bing was able to outbid Google to be the default search engine on Firefox; (2) Outbrain and Taboola regularly outbid Google AdSense to advertise on Time, Forbes, Bloomberg, etc. In both of these cases I would have expected Google to prevail, so perhaps Google's personal-information advantage is not as strong as I think. Or perhaps Google isn't taking full advantage it.

[yuhong]

>The key being that all of the knobs that Google has at its disposal will eventually be turned to their maximum point

I wonder what this would exactly look like. As a side note, I wonder what would happen if for example an economic collapse happened and Google's ad revenue was significantly reduced.

[gniv]

> This is reflected in Google's financials as a falling 'cost per click' (what Google gets for an ad click).

But what is not known is the cost of a _similar_ click. Since the number of clicks increases dramatically quarter over quarter, it could be that it's the new clicks that are bringing the cost down.

[spydum]

Chuck, just want to say your detail and insightful comments are a tremendous asset to the community!

I do have to disagree though: MSFT has office and windows as major cash cows, maybe azure will also start turning some big profit in 2017 as well (tbd). So they can afford those r&d style projects without nearly as much risk as "Alphabet". I do agree with your assessment of goog though: the heat is turning up and I don't doubt belt tightening is their future.

[ChuckMcM]

I agree, Google really needs their version of 'office' or to make their cloud offering competitive in order to survive long term. I see them trying to extract more and more revenue from Android as one of their strategies.

[PunchTornado]

a lot of it is going to facebook & others.

[bitmapbrother]

And yet Google is making record profits YoY. As for Facebook, it would seem they've been cooking the books.

[nunez]

I hope they strip the stupid tape over their fridges that cover the sodas "because a 200-calorie coconut water drink is SO MUCH BETTER for you than a ZERO CALORIE soda."

Who am I kidding; that will never happen

[muninn_]

I don't buy it. Many companies are able to get the perks, culture, and autonomy right without being a multi-billion dollar company. It does enable Google to do certain things (like moonshot projects) that smaller companies can't do, but a lot of the perks I've seen are replicated in other companies.

In fact, I think your comment "Google doesn't do what it does to be successful, it does it because it is successful" is completely ignoring how Google came to be successful in the first place, which was doing what you're saying it does because it's successful. Reading something like "How Google Works" goes over this exact thing in detail.

[Periodic]

I tried to clarify the wording. I'm specifically trying to call out the structure of Google's management and the general way they approach problems.

For example, even within the profitable Google portion of the business, they often have many competing projects. There will be competing search features, competing chat applications, competing cloud services. Google will make big speculative bets or internally competitive bets because it can afford to just let people build things and see what happens. Google, as a company, doesn't really seem to have any idea of what most individual engineers are doing week to week.

Many companies can't do that. If you are a medium-sized company you probably don't have the market position or revenue to afford to be unfocused.

[user5994461]

> Google, as a company, doesn't really seem to have any idea of what most individual engineers are doing week to week.

Correct... but also correct if you replace Google by any company.

I've worked from zero management company (ala. Valve) to large fixed hierarchical structure (government).

The company never knows what people are actually doing. If it tries to find it, people will either game the system or waste time to justify they're doing instead of doing it.

[hkmurakami]

>For example, even within the profitable Google portion of the business, they often have many competing projects. There will be competing search features, competing chat applications, competing cloud services. Google will make big speculative bets or internally competitive bets because it can afford to just let people build things and see what happens. Google, as a company, doesn't really seem to have any idea of what most individual engineers are doing week to week.

This sounds exactly like how Microsoft works. They (famously) even had 2 versions of Windows 95.

[tajen]

I didn't know – and haven't found – the 2 versions of Windows 95 you're talking about. Source? Is it Windows 93 vs 95? Is it 95 vs "Plus!" ?

[dgant]

Might be referring to NT

[vkou]

Yet, free markets beat out top-down managed economies because they have competing teams seeking to provide the same services.

Tech is, to an extent, a winner-takes-all market. If you build out two competing products internally, in the long run, it will cost you less then building one product, and having an outside competitor fight you for market share, by building that second product.

Case in point: I'm sure that Facebook would have loved it if one of their teams built Whatsapp. For 20 billion dollars, they could have funded a hundred competing internal products.

[nostrademons]

For most companies, having two competing products internally does not also prevent you from having two competing products externally. There's no law preventing an outsider from starting a competitor just because you've already got two alternatives.

Whatsapp is a great example - Facebook already had Facebook Messenger, and Facebook Chat, internally. Google had GChat and Hangouts and whatever else they're working on these days. It didn't prevent the outside company with half a dozen employees from eating their lunch.

The parent's point is that because of their core markets in search & social networking, Google and Facebook have the luxury of no major competitors, and so they can afford the internal competition to advance the state of these markets. The market structure came first, not the corporate structure. And if you try that in a market with few barriers to entry (like mobile chat, before everyone had built their network effects), it's just as likely that a competitor outside the company will eat the market, not one inside the company. Probably more likely, since internal projects are hamstrung by things like executive approvals, PR worries, and potential legal issues while startups can just take their product to market and see where the market takes it.

[dispose13432]

They don't seem to play free market. They seem to play "new guy takes all".

For example, Google Voice was put in maintenance mode and Hangouts took off. Then Allo, then ... ?

They very rarely actively push two products with the same purpose.

[vkou]

No, it's not a free market. They also don't try to poach other teams' employees with higher salary offers, push bad press about the other team, try to be ramen-profitable, etc.

But you can get some of the benefits of a free market by having teams work on multiple solutions to one problem. You can also squander them by making the wrong high-level decisions.

[Animats]

Google Voice, previously Grand Central, was in maintenance mode from when it was first acquired. Google never improved it much.

[jrochkind1]

Pretty much _every_ google product is in maintenance mode from when it is first released, and never improved much.

This may be part of the strategy, those that somehow turn into 'profit' are the ones that actually have full-time engineering assigned to them, and get improved? I couldn't say.

For example that I ran into recently, Google Custom Search/Site Search theoretically _has_ an API for creating/modifying custom searches... but it's completely inaccessible, because the only auth method it supports is one that no longer exists. I suspect it is still running on a server somewhere with zero traffic though. If you Google around, you can see for at least a year, _some_ people (prob those with the paying 'Site Search', not the free 'Custom Search') have managed to get answers from this from google support -- the answer is "There is an internal feature request ticket to add OAuth 2 support to this API, but I can't give you an ETA".

[euyyn]

> Google, as a company, doesn't really seem to have any idea of what most individual engineers are doing week to week.

This isn't true. Even I, as a software engineer, can look up with ease what the majority of other people work on.

[nunez]

I hope you're not talking about peoples OKRs or internal profiles on Grow or whatever it's called now because you know that stuffs not accurate

[euyyn]

Wasn't thinking of those, no.

[gonehome]

It may end up that even Google can't afford to be unfocused - if they do end up losing their search engine ad revenue because it and standard websites become less relevant it'll probably be what's pointed at.

You can see their disorganization in their software and products - letting ideas like Google Voice that were ahead of their time languish until iMessage comes and takes over, lots of failed software launches etc.

[bitmapbrother]

>Google, as a company, doesn't really seem to have any idea of what most individual engineers are doing week to week.

Isn't that basically the job of the manager?

[muninn_]

I don't disagree with your follow up. Thanks for the post.

[ravitation]

He's not talking about the perks. He's talking about the design of the organization, beyond the culture.

The structures, the roles, the processes.

Autonomy is a value, but values only influence design.

[muninn_]

The post I responded to mentioned (and naturally I mentioned this as well) perks, autonomy, structure, etc... and then says that the missing piece is billions of dollars in ad revenue.

So I pointed out that many companies are able to get these things right (/imitate Google), without billions of dollars in ad revenue. It's not the ad revenue. That's my contention.

[ravitation]

What I meant is that "perks" are just an outcome of a certain organizational structure designed around a set of values.

There are multiple structures that allow for "perks", or are designed for autonomy. And, as you said, others have produced structures with similar results or based in similar values.

But, he's talking about the specific structures at Google.

[jasode]

>Many companies are able to get the perks, culture, and autonomy right without being a multi-billion dollar company.

You're right but I understood what Periodic intended to explain. Unfortunately, he phrased it as "billions in ad revenue" instead of a less common metric of "profit-per-employee".

If the company generates enough profit-per-employee, it can afford to pay for lavish perks.

Consider 2 different companies' revenue,income,#employees:

Walmart: $482b, $24b, #2300000 -- ~$10k per employee

Google: $74b, $19b, # 69952 -- ~$276k per employee

Take one example of a perk such as free catered food which is estimated to cost $20-per-employee-per-day.[1] For Walmart to offer this perk multiplied by 2.3 million employees, it would cost ~$11 billion which is almost half the $24b profit. Google's calculation for 69k employees is ~$349 million which is less than 2% of the profit. And the free food is just one perk... there are also massages, haircuts, laundry, daycare, etc.

Yes you don't have to have a billion in revenue to offer perks like that. SAS Institute of North Carolina in the 1990s didn't yet reach $1 billion in revenue but they offered lavish Silicon Valley style perks.[2] They could afford it because they sold statistics software with high margins (profits). Although they are a private company, we can safely assume they are generating much more profit per employee than Walmart.

So, if we have a hypothetical medium-sized company that has a revenue of $400 million with income of $100m ... to afford lavish perks, we need to generate that $100m with ~360 employees or fewer (Google benchmark). If it requires hiring 9500 employees to generate $100m (Walmart benchmark), it means we will have to pinch pennies and charge the employees for each pen taken from the supply room.

Direction of cause-effect: create a great high-margin business so you pay for free gourmet food.

Attempting the reverse of subsidizing $20 for each employee doesn't mean you'll end up with a high-margin business.

We can generalize the free food case study to other "Google perks/methodologies/culture" to see if we really have the direction of cause & effect correct.

[1] http://www.businessinsider.com/2008/4/googles-ginormous-food...

[2] 60 Minutes story (2002): https://www.youtube.com/watch?v=lvsIcwHavOs

[muninn_]

So I understand what you're saying here, and it makes sense. At the same time, I see career section after career section offering the same kind of perks with much smaller companies. Maybe it's not 3 meals of gourmet food, but free catered lunches, great 401k matching, unlimited vacation, great health and dental benefits. I'm not saying the perks are matched tit-for-tat, but I still stand by my statement that you don't have to be a multi-billion dollar company to afford those perks.

Likewise, Walmart can offer those types of perks. Just not to people working on the floor or in distribution centers.

Thanks for your original reply :)

[e15ctr0n]

> I see career section after career section offering the same kind of perks with much smaller companies. [...] you don't have to be a multi-billion dollar company to afford those perks.

Many of these smaller companies are VC-funded startups that have zero revenue and are burning VC money to provide these perks.

[ghaff]

These are by no means the norm outside of Silicon Valley VC funded companies where they have become table stakes. Good health and dental in many cases but not the rest. And unlimited vacation, where offered is, even ignoring the more cynical interpretations mostly about eliminating liabilities especially under California law.

[morgante]

I'm guessing you're mostly looking at career sections for technology companies. In general, tech companies have quite high revenue per employee.

You're probably also looking at startups, which don't yet have material revenue but plan to reach margins closer to Google's than Walmart's.

[brazzledazzle]

It's not fair to count retail or warehouse employees. Walmart would only need to offer those perks to its corporate employees.

[mathattack]

Yes. Many management books and theories confuse correlation with causality.

Another common example, "Companies with happier employees are more successful." But perhaps causality is the other way, "Employees become happy when their companies succeed."

[jamez1]

Or perhaps there isn't causality either way. For example, perhaps good management tends to produce both happy employees and successful companies.

[mathattack]

Yes - very much so. This happens a lot. Frequently when you optimize on a metric, the correlations go away.

[usrusr]

Enter the stock market and suddenly the cargo culting that results from causality mixups can successfully increase market capitalization for a while as long as enough people literally buy into the shared misconception.

It must be hard to think straight in a domain where one of the most visible success metrics can be so misleading.

[fullshark]

I wish more companies made that mistake

[furyofantares]

> Google doesn't do what it does to be successful. It does it because it is successful.

Those things aren't mutually exclusive and almost certainly are both true

[inopinatus]

The most pointed quote in the article is “No one wants to face the reality that this is an advertising company with a bunch of hobbies.”

But without search, without Gmail, without Chrome, without Android, without the moonshots and all the "hobbies" Google's brand would wither, and its access to data at massive scale would be crippled, and its access to eyeballs would be curtailed, and the talent would walk. Others have built advertising businesses, but Google's dominance in advertising couldn't occur without the product mix.

[bad_user]

All of Google's products are complementary products that create lock-in.

For instance both Chrome and Android have been created with the purpose of controlling the underlying platform that people use, in order for them to not be at the mercy of the other platform owners, like Apple or Microsoft. And it worked.

This is very obvious to anybody with an interest in how microeconomics works. For example this is why open source can exist in a world where people need to struggle to put food on the table. It's basic knowledge: complementary goods and services are meant to increase demand for your cash cows.

But alas good journalism is dead.

[sahaj]

"All of Google's products are complementary products that create lock-in"

I disagree. Chrome was created to be a standards based browser, Android to unify the different phone operating systems circa 2004. I picked Google products because they allowed me to get out if I needed to. Gmail provides IMAP, POP. Docs and Music let you take out your data as needed. Google intentionally creates a way to get your data out. All of these things require foresight and work to pull off.

Does the lock-in exist because no one else is offering the same service? Potentially. But the intention of the company when they created these services was to create the best service, not a lock-in service.

[user5994461]

They're just ad distributing products.

Ever tried to install an adblocker on Android? There isn't anything you can do without rooting your phone. Seriously, it should be called Addroid.

Ever tried to install adblock/ublock on Chrome? only to find out that it doesn't exist in the chrome store or was removed again.

[bad_user]

Well, actually Android is the most friendly mobile platform for ad-blockers, or other hacks.

What you're complaining about is Chrome for Android, but then again Android is also the only mobile platform supported by a real Firefox implementation that has plugins, including ad-blockers.

You're talking about rooting the phone, I guess you want /etc/hosts or something, but you know, even on the desktop that kind of solution requires sudo rights. This one is entirely about security and really, Android is not that hard to root.

And even though I'm a Firefox user on the desktop, I've also used Chrome with AdBlock Plus and then uBlock Origin and never had any problems.

[eropple]

> Ever tried to install an adblocker on Android?

Yes. Works across browsers and against in-app ads, too. https://block-this.com

> Ever tried to install adblock/ublock on Chrome?

Yes.

> only to find out that it doesn't exist in the chrome store or was removed again.

Under no circumstances. AdBlock Plus has never, as far as I know, been removed, nor has uBlock Origin.

[marssaxman]

I use an adblocker on Android all the time, and I've never bothered to figure out how to root a phone. It was not at all difficult. Maybe it's hard with Chrome but that's no big deal - just use Firefox.

[serge2k]

> Chrome was created to be a standards based browser

Then why not give money to firefox? Why not start contributing more?

instead they built their own, integrated it with google stuff, and pushed it heavily for years and years.

[dekhn]

Google did give money to firefox. Lots and lots of it.

https://www.cnet.com/news/firefox-maker-mozilla-we-dont-need...

[zardeh]

Why not Safari or Opera?

Competition is good. You can make a standards based browser and then add additional features that others can't or won't provide. Building it in house gives them more control. Do you think Mozilla would have developed V8 if google just threw money at them?

[ronald_raygun]

A good blog post on what youre talking about

https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/

[xenadu02]

He's got a great prescient paragraph at the bottom:

> Sun is the loose cannon of the computer industry. Unable to see past their raging fear and loathing of Microsoft, they adopt strategies based on anger rather than self-interest. Sun’s two strategies are (a) make software a commodity by promoting and developing free software (Star Office, Linux, Apache, Gnome, etc), and (b) make hardware a commodity by promoting Java, with its bytecode architecture and WORA. OK, Sun, pop quiz: when the music stops, where are you going to sit down? Without proprietary advantages in hardware or software, you’re going to have to take the commodity price, which barely covers the cost of cheap factories in Guadalajara, not your cushy offices in Silicon Valley.

Indeed Sun got eaten alive by commodity hardware while not having any viable strategy to make money on software.

[hackcrafter]

On a side note, I'm glad to see Joel has re-themed his blog posts but kept them hosted at the same URLs.

Many of these posts seem timeless and often very prescient.

In fact, at the bottom of this one, he points out the strategic dead-end Sun was heading down with commoditizing software while also making/promoting Java that commoditized their hardware...

[lobster_johnson]

He recently moved to WordPress, after having used his own blogging tool for years: https://www.joelonsoftware.com/2016/12/09/rip-citydesk/

[throwaway98237]

"All of Google's products..." and there are many "create lock-in." so very true

How have there been no anti-trust related issues here?!

[eropple]

Because antitrust law is made of words that mean things. There is no field, anywhere, in which Google has the monopolistic position necessary, or has been shown to be in an oligopolic group necessary, to invoke antitrust law against the company. Not search, not ads, not mobile, not e-mail, not anywhere. They have competition, and healthy competition, in literally every field.

[throwaway98237]

You didn't need to be an asshole. But, you went and were.

[throwaway729]

> Google's dominance in advertising couldn't occur without the product mix.

This is absolutely accurate.

Google is what it is because google.com is the best search engine in the world and because GMail is the best web-based mail client -- free or otherwise.

[rokhayakebe]

free or otherwise.

Correct, which is why many people have gmail for personal use and google apps gmail for professional.

I can't use Outlook or Yahoo Mail; that's not due to a lack of trying.

[lobster_johnson]

There are better alternatives. I use Fastmail.com.

[Roritharr]

I'd take Zimbra over Gmail any day.

[findjashua]

"But without search, without Gmail, without Chrome, without Android, without the moonshots and all the "hobbies" Google's brand would wither"

I'd argue it's less about branding, and more about creating an ecosystem.

[wnevets]

exactly, with out those hobbies users like myself would be less "trapped" in the Google ecosystem.

[drvdevd]

The interesting thing about Google though, is their seemingly humble roots and how quickly they rose to billions in ad revenue. I still remember when they didn't exist. I believe that kind of quick, meteoric rise is a relatively new phenomena. A company of Google's scale would've taken 100 years to build, 50 years ago.

[fineline]

So if they'd started in 1966 it wouldn't have been built until 2066? Good job they waited until the nineties so they could leapfrog their alternate destiny.

[drvdevd]

Actually, yes. That's exactly correct. You can probably directly correlate their growth with the rise of widely available broadband internet access for homes in the 90s.

[dworin]

The best business practices to emulate come from successful in boring and fiercely competitive industries, where you can see if those practices are really making a difference. When a company has a single massively profitable product that's mostly protected from competition, it's hard to know if anything they're doing makes sense at all. But boring companies don't make exciting Fast Company headlines.

[panglott]

Isn't this true of any large, profitable company, like Microsoft in the '90s?

But surely the cultures these companies create are very different. Or is Google secretly a lot like Microsoft in the '90s?

[ravitation]

> Google doesn't do what it does to be successful. It does it because it is successful.

I love this line.

[elcct]

And it shares just so much ad revenue with publishers so they don't starve but can't develop at the same time

[__derek__]

We humans have a hard time reasoning about correlation and causation. Superstition comes so naturally.

[smallnamespace]

That's because causation is really hard to reason about. Often times it's not that A causes B or B causes A, but C causes both, or A and B causes each other at the same time.

[Afforess]

No. You're correct, causation is complicated, A-Z and all the greek letters too are part of a single cause. But the situation is worse than that.

The reason humans are superstitious is that we don't seek answers, we seek narratives. We seek to explain without disrupting what we already believe. We might see the real cause and effect and rewrite what we see to fit what we want.

[__derek__]

You sound like someone who's read The Black Swan. If you haven't, though, you probably don't need to.

[shmulkey18]

"We are pattern-seeking story-telling animals." -- Ed Leamer in "Macroeconomic Patterns and Stories"

[1_2__3]

ITT: A lot of people who have never worked for Google and don't realize how correct you are.

[jhayward]

> Google doesn't work the way it does to be successful. It works that way because it is successful.

Correct, and commonly the case. There is a corollary as well - often the company (not commenting on G specifically) does not know precisely why they are/were a success, i.e. what very specific details were important vs other specific details that look important, but aren't.

This lack of insight happens all the time and company culture can become fixed on things that they did as they became successful but were red herrings. A kind of cargo cult effect. One example I would give from Google is the early focus on "top school, top grades" "A" players as hiring filters - turns out that was useless, or worse. Kudos for figuring that out - but there are probaby at least a dozen other strong beliefs cooked in to the culture that are simply coincidental to success, not essential.

[_RPM]

Yes, also, a lot of companies try to emulate Google's interview style for engineering.

[ninjakeyboard]

You're absolutely right. There may not even be causality but they have to evolve together. You can't start a company and try to be like google. The food staff would be a primary expense and that would sink your company and turn off investors. You care so you conduct the M&M Project - things like that. It evolves with your success and keeps people around and interested.

[nunez]

To be fair, that applies to many more things outside of Google:

- "Why can't everyone stop being poor and get a job; it's not that hard!"

[jondubois]

I think a lot of tech companies are like this.

Most tech companies by far succeeded because they were in the right place at the right time - But post-rationalization can make anyone look like a genius; and the illusion can last forever.

[balls187]

By Billions of dollars in ad revenue, you actually mean high Revenue per Employee.

[snambi]

This is true. Google founders were extremely thrifty in the early days, before they started making money. They didn't compromise, but they didn't spend lavishly either.

[anamoulous]

Sort of like the 20th century newspaper business.

[mbesto]

I'm oft reminded:

Revenue solves everything

[king_kerr]

Excellent point that puts this in its proper perspective.