1. Ad cost-per-click goes down over time. At some point, the entire population of earth will be fully online and there will be no natural growth in advertising. The ad business stagnates. Google's stock price depends on growth.
2. Google has a bazillion incredibly highly paid employees. They don't just need billion-dollar industries to supplement ads, they need 100-billion-dollar industries. There are not that many of these industries in existence. Cloud is one of them.
3. Cloud services scale well, so nothing stops AWS from eventually reaching something ridiculous like 90% market share. This means that it is not enough to be an "also-ran."
4. Cloud eventually failing and being decommissioned would so permanently trash Google's reputation for b2b services outside of advertising and would so thoroughly gut the company (laying off 10,000s of workers) that the company would never recover.
I am a Googler. I don't work in Cloud. Absolutely none of this is based on internal information. I have no actual idea if this reasoning matches anything that internal leaders think.
1. Ad cost-per-click goes down over time. At some point, the entire population of earth will be fully online and there will be no natural growth in advertising. The ad business stagnates. Google's stock price depends on growth.
2. Google has a bazillion incredibly highly paid employees. They don't just need billion-dollar industries to supplement ads, they need 100-billion-dollar industries. There are not that many of these industries in existence. Cloud is one of them.
3. Cloud services scale well, so nothing stops AWS from eventually reaching something ridiculous like 90% market share. This means that it is not enough to be an "also-ran."
4. Cloud eventually failing and being decommissioned would so permanently trash Google's reputation for b2b services outside of advertising and would so thoroughly gut the company (laying off 10,000s of workers) that the company would never recover.
I am a Googler. I don't work in Cloud. Absolutely none of this is based on internal information. I have no actual idea if this reasoning matches anything that internal leaders think.