[whalee]

People could trivially switch their search engine to Bing or Yahoo, but they don't.

If ads are so overpriced, how big is your short position on google? Also ads are extremely inefficient in terms of conversion. Ads rendered by an intelligent, personalized system will be OOM more efficient, negating most of the "overvalue".

I'm not saying they should serve ads. It's a terrible strategy for other reasons.

[I-M-S]

Funny that you mention Yahoo, as in my mind they're the perfect example of what the poster above you noted: people quickly switched to Google once a better alternative to Yahoo appeared.

[timr]

You know that Google literally spends billions to ensure that people don’t switch, right?

That’s possible because they’re immensely profitable.

[bitpush]

Isn't the billions just setting the default? The ability to switch is the same as far as I understand it.

[timr]

The default is what matters.

[array_key_first]

> People could trivially switch their search engine to Bing or Yahoo, but they don't.

Well those are obviously worse products.

> If ads are so overpriced, how big is your short position on google?

I hate hearing this stupid, stupid line.

Most companies are run by neanderthals with more money than brains. Companies burn money on advertising because why not? Making your product better is hard and takes time, advertising is the easiest thing you can do. Does it work? Not really, no, but you get extra business for as close to zero effort you can possibly get. Hit a wall? Just advertise more!

> Ads rendered by an intelligent, personalized system will be OOM more efficient, negating most of the "overvalue".

This is exactly what people said about personalized ads. "No you don't understand! It's not like a billboard!"

And that's true, but consumers are not fucking braindead, and there's also the laws of economics. If I have 50 bucks, I'm not spending 20 fucking dollars on your dumbass paint, no matter how much you advertise it. And that's not a me thing, that's a consumer thing. You can spend 1 quadrillion dollars advertising ferraris and guess what - you will STILL quickly saturate that market and hit a hard ceiling. Because consumer's can't afford it.

And that's not even touching on the fact that most of the metrics around advertisements are just obviously bullshit. How many human eyeballs are actually on ads? Much, much less than everyone thinks.

Yes, sure, we can build highly personalized ads. Whatever. But at the end of the day, consumers still have the exact same amount of disposable income as before. We have created Z E R O value, what we have done is consolidated it.

Hmm, what happens when markets consolidate too much? Well, I guess that would mean advertising becomes completely worthless, wouldn't it? What a conundrum! It's a good thing our markets haven't been consolidating for the past 70 years...

[rprend]

Do you think consumer brands lose money when they pay Google to do advertising? Do you think digital ads have a negative ROI for the brands that buy them? If so, why do they keep buying more? Wouldn’t they lose to more efficient companies?

I think you underestimate how valuable being the top slot on google is. Just the other day i googled “bluetooth speaker” and bought the first result (an ad). One hour of that can net you millions of dollars. That’s why consumer brands bid more and more every year on digital advertising.

[array_key_first]

> Do you think consumer brands lose money when they pay Google to do advertising?

For many brands, yes, and they don't know it.

> I think you underestimate how valuable being the top slot on google is.

The more you advertise, the less valuable each ad space becomes. Consumers have a lot of money they have to dole out. Giving them more ads won't increase that pot of money - it will make your cut smaller and smaller as it's split across more brands.

[rprend]

Which brands lose money on ads? Why are they still in business?

> consumers have a lot of money that they dole out. More ads wont increase the cut of money

Consumer spending is not a fixed pie chart or a zero sum game. US consumer spending has grown from $14 to $19 trillion since 2020. $5 trillion in new pie!!

Your model of ads is: “I, a consumer, have decided to buy a bluetooth speaker, and the ads push and pull me towards particular brands”. But that’s not how ads work! Ads don’t just compete for fixed spending, they induce NEW spending. An ad can give a customer the idea of buying, and grow the market.

[array_key_first]

> US consumer spending has grown from $14 to $19 trillion since 2020. $5 trillion in new pie!!

All that's telling you is the economy is not doing nearly as well as some of our metrics would have you believe.

Real wages are about the same as before, probably lower. Consumers are buying the same amount of stuff - no value has been created. Rather, the dollar has been devalued, much more than we're willing to let on.

There's real value, like actual physical goods, service and labor, and fake value. Fake value tries to proxy real value, but historically it's often way off.

Money is fake value. Stocks are even more fake value. It doesn't matter if your stock price is through the roof if you're not selling a product people want, for example. The product is the value, the stock price is people trying to approximate the value and future value.

[rprend]

Look it's fine to have contrarian opinions that left is right, everything is backwards, whatever. But when it comes to business and money, these things are quantitative and falsifiable. If you have a better understanding than the idiots in charge, then go be rich! If you have a better model for real value, you'll outcompete them. Until you do that, you are playing word games, ones which have somehow deluded you into believing that the most profitable company on earth is not valuable.