[oli5679]

It’s really easy to be cynical.

There is a big upside potential for high growth companies taking advantage of technology trends.

Today, Google’s revenue is £263.66 Billion. This is nearly 300x the revenue Google generated in 2003 ($961.9 million). The company went public on August 19, 2004, at $85 per share, valuing the company at $23 billion. After the IPO, Google reported $1.47 billion in revenue for fiscal year 2003, with a profit of $105.6 million.

[matthewdgreen]

But let’s ask a different question: aside from re-allocating the economy’s marketing and advertising budget into Google (from, presumably, local newspapers and TV before Google existed) how much of that revenue comes from actual tangible new wealth creation?

To put some context on this, 78% of Google’s revenue is advertising. Overall US ad spending has been increasing at about 1.6% per year since 2001, with no obvious indication of an acceleration (beyond some bumps around 2007/8.) So is there actually a success story beyond market capture here? And if all we’re doing is concentrating existing business into new channels, is this something we should be excited about?

[econ]

You simply pay more for a product to find you. The more overpriced ones find you first. Googles business model is to make it as hard as possible for products to find you while simultaneously pretending to be the go-to place for precisely the opposite. A truly magical accomplishment.

Wealth creation?

[pzo]

Google created android - the most popular OS. Sure maybe samsung or nokia would be used instead but definitely the helped expend ad business with android. Same like Meta/ByteDance expanded Ad business with Intagram/Tiktok. Even if ad spending grew 1.6% per year it's not sure if it grew as much if android didn't exist. Also need to take into account probably reduced cost of advertising - this product just got cheaper. That the ad market grew 50% in 25 years doesn't mean we have only 50% ads served same like 50% grow (in $) in smartphone market doesn't have to mean you have only 50% more smartphones if they got cheaper.

[piva00]

Technically, Andy Rubin and Chris White weren't at Google when creating Android. In usual big tech fashion, Google did a good acquisition but didn't actually "create" Android, they bought it.

[hluska]

This is an interesting topic and I’m not sure it has an answer. In 1995 advertising was really spray and pray. Testing ads was a really difficult proposition so we saw things like bearer coupons (mention this ad or bring in this coupon for 20% off!). The dominant advice out of radio was to play an ad constantly. That advice worked well for traditional media but not so well for advertisers. That model worked so well for advertisers that thirty years later, people around my age in my city can all sing the same five advertising jingles.

Google provided a toolkit to test ads and figure out which are most effective. Now the other side of that argument is that in industry, a massive of percentage of qualified people still spray and pray. The advertising industry as a whole is far from data driven.

At one point, there was an argument this was good for the planet. My newspapers are much thinner than they were 30 years ago when I could collect a metre of newsprint a month if I subscribed to the Globe and Mail plus a local. But I don’t think anyone can claim now that data centres are environmental miracles. This has also decimated local journalism to such a point that people are less aware of environmental catastrophes in their own relative backyards.

It’s possible the net effect was positive and advertising is more efficient. It’s more accurate to say advertisers have a toolkit to analyze effectiveness but many don’t or aren’t capable.

Edit - I’m going to give a very specific example of a radio jingle. If anyone is around forty or older and from a major city in Saskatchewan, they will be able to finish this.

“I said no no no no don’t pay anymore, no GST and no money down.”

[matthewdgreen]

Maybe another way to say this is: do targeted ads materially advance society? Is there an argument that better ad-targeting has increased GDP, or improved overall economic growth in some other way? Would a less-efficient online advertising system produce dramatically worse outcomes? And did we get more or less back from the older system (TV+local journalism) than we get from Google?

[jayd16]

Online commerce is a huge innovation and Google is part of that.

[matthewdgreen]

But is a Google with 78% market share actually important to this? Could we have a network of companies doing this job, perhaps less efficiently, and the world would be just about as decent?

[nottorp]

The antitrust people in various governments should definitely get excited about it :) And they apparently are indeed.

[toomuchtodo]

Is that because of innovation? Or is that because of Google’s antitrust activity the US government is currently busting? Safari default search engine deal, etc.

[bobxmax]

"Antitrust" is just lawyer-talk for winning strategies that we later arbitrarily decide is not good for capitalism.

They weren't a bunch of gremlins in a cave conspiring to commit "anti-trust violations" in 2005. They were smart as hell and invested in the right areas.

Microsoft would get hit with the same anti-trust Google is being hit with if Bing and Windows Phone were successful - they're getting away with it because they're terrible.

[intended]

Anti Trust is not lawyer speak for winning strategies. It’s a specific term, and theres a time and place to use it. Anti trust is what people, especially programmers, have been saying from time immemorial when these firms became this big.

Inefficient markets are bad for humans and are bad markets. The allocate resources inefficiently. The google graveyard is (arguably) a case in point.

The reason Khan reached the FTC was because her thesis at college, made the case that amazon’s actions reduced customer welfare. A fact that was covered here, on HN. This isn’t something a community notices unless it matters to them.

[tossandthrow]

> They weren't a bunch of gremlins in a cave conspiring to commit "anti-trust violations" in 2005. They were smart as hell and invested in the right areas.

You still killed the man regardless of intention.

[wavemode]

You seem to possess the (very common) misconception that monopolies are illegal. They are not. Rather, it is illegal to intentionally use one's monopolistic position to make it difficult or impossible for others to compete.

[nottorp]

> winning strategies

Winning for who? Not for society as a whole, that's certain.

To put it in money terms so even you can understand it, how much time has been wasted globally because Google is peddling ads and spam sites instead of pointing people to useful results?

Is that free? We should substract it from the GDP calculations if you ask me...

[toomuchtodo]

> "Antitrust" is just lawyer-talk for winning strategies that we later arbitrarily decide is not good for capitalism.

“I don’t like the law and its application” isn’t an argument.

[tqi]

These aren't like the laws of physics, there's obviously a lot of post hoc interpretation that happens.

[KerrAvon]

The meaning of “antitrust” is very clearly defined. You’re allowed not to like it or to think that laws against it should be struck down, or whatever, but you can’t say it’s something it’s not.

[tqi]

Is it? IANAL, but it seems like the concept is actually quite ambiguously defined[1], by design.

[1] https://www.ftc.gov/advice-guidance/competition-guidance/gui...

[toomuchtodo]

Certainly, when a law that wasn’t applied begins to be applied again, I can see certain mental models taking issue with that. Regardless, the law and its historical application and consequences didn’t change, only a politically driven low enforcement period. That was the anomaly.

[echelon]

There are models that are close enough.

If you allow one company to achieve market dominance, it suffocates the ecosystem and stifles evolutionary growth pressures. It's concentrated malinvestment into a local maxima that salts the playing field so thoroughly that escape velocity is unattainable by anyone else.

There are models of this. And historical anecdotes and evidence.

[snowstormsun]

Don't confuse cynical with realistic, though.

[AbstractH24]

It’s literally a matter of perspective

[asdf6969]

Google search, google maps, gmail, YouTube, and Chrome have all been good functional products for over a decade. I genuinely don’t know what they’ve been doing since then other than milking us and getting new customers. Maybe 10% of this growth leads to a real improvement in human lives.