"On the conference call, Ms. Porat noted that mobile cost per clicks continued to strengthen, and that the gap between desktop and mobile is narrowing." (1)
It's no surprise that after the "mobilepocalypse" earlier this year we're seeing mobile profitability grow for Google.
Google effectively forced advertisers hands in bundling their inventory and is agressively raising min CPC in a number of categories (2)
And they are breaking many of their OWN rules about how aggressively one can promote advertising on mobile - excellent, and entertaining breakdown of that here -> http://www.seobook.com/google-goes-mobile-unfriendly
I don't have much of a point other than sharing some of the information behind what's actually driving these earnings, and the major changes I've seen / experienced as a guy that spends a lot with the GOOG.
There's an Adobe study that shows that Google appears to be cutting impressions (of bad ads?) to boost CTRs and CPC; the same report shows Facebook is handily clobbering Google in CTR / relevance:
Perhaps Google is trying to boost CTR / relevance in order to attract/retain the more valuable advertisers (who would probably otherwise weight Facebook more highly for its better targeting). I really wonder how much of this growth is just Google (and Facebook) extracting more marketing dollars from the biggest spenders.
Woah many downvotes w/out explanation. Is there evidence that this study is bonk or did that comment just excite the mafia? I believe Facebook established during their IPO roadshow that they had superior CTRs.
Edit: looking over this thread, there are several rather mild comments that got strong downvotes. Looks like the followers of this thread were indeed inordinately pro-Google.
You assert that Google is "aggressively raising min CPC in a number of categories" and then link to an article that speculates that this might be the case without evidence. They didn't even say "aggressively..."
As for the third link, search ads are not the same thing as mobile display ads from the user's perspective. Remember that in the other case (mobile display ads), Google is probably selling those ads, too.
There are other reports out there & some of them do great breakdowns of click volume, click costs, click values & so on ... based on things like: device type (desktop vs tablet vs cell phones, or even across operating systems), branded keywords vs unbranded keywords, text ads vs PLAs/shopping ads, etc.
There are many such reports, but the SEM company which regularly puts out the best report on this front is RKG (which was bought out by Merkle last year http://www.merkleinc.com/news-and-events/press-releases/2014... and even after the buyout is still putting out great reports each quarter).
In the report, they stated they saw Google dramatically increase minimum CPC on own brand keywords over the past year, that brand keyword cost was up 39% YoY, and that Google was now charging brands more for clicks on their own brand terms than Bing does. You can see a quick review of their report here
http://searchengineland.com/us-paid-search-growing-but-at-sl...
And there might be multiple factors in Google showing fewer ads. Some general assertions and/or hypothesis on potential drivers...
A rise in minimum CPCs on brand keywords might block out some of the lower value 3rd party arbitrage on the branded terms, Google might be showing larger ads (with more ad extensions) above the organic results & fewer ads in the right sidebar, some categories might have PLAs / shopping ads performing so strong that there is less need for text ads, in some categories (like hotel search) Google has effectively turned much of the "organic" search result set into another layer of ads via their hotel price ads, Google includes affiliate links in their knowledge graph, over time more of Google's search volume is on mobile devices with a smaller SERP interface & no right rail to show ads in, over time more of Google's search volume is in emerging markets with less shallower and less mature ad markets, etc etc etc
A few other things worth mentioning on their general economic trends: on smaller devices partners (outside of the big one in Apple) are easier for Google to squeeze out & represent a smaller share of Google's ad revenues, over the last couple years the partner network keeps comprising a smaller percent of Google's overall ad revenue (numerous sources on this front, like http://www.siliconvalleywatcher.com/mt/archives/2013/10/anal... & http://blog.pagefair.com/2014/adsense-smoking-gun/ ), Google is getting higher revenue from clicks on Google.com & their regional search properties but the YouTube pre-roll ads generally go for less money (since they are earlier in the consumer funnel than search is & have less intent than a search does) & drag down the aggregate click price (because Google counts YouTube video ad views as clicks).
One other thing worth mentioning in terms of mobile is that while the mobile click values (and thus CPCs) are lower, Google offsets that by dominating the mobile interface with ads. 3 years back I wrote this post roghummal↗
The golden rule! He who has the something something something something etc. Don't know, don't care.
Google displaying Wikipedia content in Knowledge Graph has resulted in a large hit to Wikipedia's traffic (20-30%). Thankfully Wikipedia said they did not see a drop in donations correlated with Google's change.
However, for sites that do monetize through ads, Google's 'scraping' of the content is indeed stealing if the content would 'organically' draw more clicks otherwise.
After Wikia Search failed, there's no risk in Google further subsidizing the growth of Wikipedia so long as Google then gets to scrape back much of the value add via their knowledge graph & Wikia is primarily monetized via Google AdSense.
It makes sense Wikimedia didn't see an immediate donation drop. In terms of a conversion funnel, the people who are using Wikipedia for the first time are not likely to donate. My guess is most of the people who are most likely to donate a small amount here or there are the regular users who regularly seek out the site. The drop in donations due to the lower exposure would take years to kick in, because now with 20% or 30% fewer users, there will also be less new future power users who would donate in say 2018 or 2019. But offsetting any decline there for a company making over a billion a month in profits shouldn't be too substantial. Sergey Brin donates a half-million a year grant to the Wikimedia foundation & Google has also donated a few million.
It is also worth mentioning the knowledge graph now often contains affiliate links for things like music, ebooks, and so on. Over time more and more knowledge categories will have paid affiliate links in them (say booking a restaurant, heading to a concert, etc.)
In some cases Google may temporarily make a link type free to try to drive adoption and awareness, but over time it will be the same sort of scrape-n-displace they've done with hotel bookings. They not only turned the "organic" hotel search listings into a second set of paid ads, but now they are also testing having some users convert and buy the hotel booking while on Google.com - just like they are doing with their car insurance offering. And they have also added links to cityname hotel searches in their knowledge graph in order to drive more people into that "almost nothing but ads" funnel.
You can see the net effect of that sort of displacement on an industry by looking at all the consolidation in travel. Expedia acquired Travelocity and Orbitz. That leaves Expedia, Priceline & TripAdvisor as the remaining 3 big players. And even with TripAdvisor Google offered them and Yelp an ultimatum to allow Google to scrape/steal their reviews & if they wanted to opt out of that theft then they could use a robots directive to block Googlebot from indexing their site. That monopolistic abuse was so brazen it actually managed to draw the interest of regulators and politicians. Eric Schmidt did a fantastic job of misdirection & fibbing at the 2011 congressional hearing (ref http://www.benedelman.org/news/040115-1.html ) but the regulatory & political reviews forced Google to back away from at least that form of monopolistic bundling.
In certain circumstances, the price of nonvoting shares may not move with the price of voting shares. Consider a circumstance in which an activist investor seeks to gain control of a company. The voting shares will rise in value as a result of increased demand for the shares, while the nonvoting shares may not move at all.
Imagine a case where Google's business tanks, shareholders wish to oust Larry Page, Larry & Sergey obviously won't budge, but activist shareholders manage to get Eric Schmidt on board. Eric + virtually all of the class A shares is enough to get voting control of the company (when the class C shares were created, it was because the voting rights of Larry + Sergey were just barely over 50%).
In this scenario, the class C shares will fall dramatically because the financial value of Google will be nearing nothing, but it's likely that the value of class A shares will skyrocket. Because an activist needs virtually all of them to rest voting control from the founders, there's a "corner the market" situation where the last few remaining holders can demand very large prices for their shares.
The difference in share price won't be that big. Your analysis isn't wrong, but you haven't followed it all the way through.
If there is a big difference in price then that's an arbitrage opportunity for somebody, in the end all shares have the same claim on the company and will get the same payout if Google is bought or split up. In this case there would be a bunch of people buying class C shares in anticipation of the activist shareholders winning. Additionally, the price of the voting shares won't go up that much because the activist investors can't pay more than what they perceive the value of the company to be.
There's a very different risk profile for the buyers of class A shares vs. class C shares in the scenario above. The activist shareholder is trying to make the future happen; the passive shareholder is trying to predict which future will happen. The activist shareholder has a lot more information available to him, notably how close he is to winning control of the company. Some of that information may leak via the stock price and cause a run-up of class C shares, but a passive shareholder faces significantly higher risk when trying to assess the likelihood of activist shareholders winning a proxy battle, because they don't know how many shares the latter has.
It's much like how Porsche cornered the market in Volkswagon shares. Until the last couple hours, the market at large had no idea how close they were to a corner.
Also, remember that the price of a stock is set at the margin, but the value of one's holdings is an average. Imagine that an investor has amassed 100M shares of Google at an average price of $20. If they get to 100,001K, the value of Google will shoot up to $50. It is rational for them to pay any price up to $3M for those last 1000 shares, because their profit if they get them all is $3B, but if they are missing even one of them, they get nothing.
Same reason eminent domain laws exist: without them, it is rational for a large organization to pay any amount up to the total value of the project to the last few holdouts that are preventing it from being completed.
The only flaw in such a strategy is that Larry and Sergey control the dominant share of all the voting stock. No outside investor can do a hostile takeover.
It'd require one of the two of them to defect for such a scenario to come to fruition.
The scenario above assumes that one member of the trifecta defects and votes with the activists. Looking at the numbers [1], I was wrong in remembering that Eric Schmidt (46M votes) + all class A shares (280M votes) could outvote the founders (460M votes total). But the scenario still holds if Sergey is the defector - it'd have to be him (230M votes) + 160M Class A shares (roughly 60% of the company) against Larry + Eric. Pretty unlikely scenario, but conceivable, particularly as the founders get older and their interests diverge.
aapl and nflx had stock split among others. I don't think they have such a thing like goog\googl (dual tickers). May be it is solely choice of the founders?
GOOG was already a traded ticker so that never had any voting rights? or it got changed after the split?
A usual split just issues additional shares of the same class. The google split is unusual, because the new shares are in a new class which has no voting rights. The tickers were changed as of the split.
This is strange. I thought the new ticker would appeal less attractive to investors as it does not have any voting rights but it is more expensive than the old ticker. Does it have to do anything with volume of shares for that ticker?
Thanks to everyone for responding so kindly and quickly to my queries.
No voting rights is less attractive, but insiders hold another class of shares with ten votes per share, so that the insiders have a majority on all normal[1] votes, so the common stock voting doesn't really matter, and is not like to matter soon.
[1] some elections may have statutory requirements that a majority of each stock class vote in favor, such as tender offers, etc.
The voting rights moved from the old goog to the new googl. Voting shares do cost more now. But voting shares don't matter, Page Bring Schmidt hold a majority of votes via a third class of stock.
Hopefully GOOG won't lose its way with its unrelenetless search for profits as opposed to incentivizing its devs to make cool products. That being said, good job new CFO
I think the problem is fundamentally this: how do you decide what is a cool product, and whether to work on it or not? Subsequently, how do you sell it to the engineering & PM teams to get them to actually do it? Remember that Google doesn't really work in the same way as most product companies and these two things aren't necessarily straightforward.
I mean you're right but it just sucks when you have this massive cash pile that could be used to experiment in interesting ways. Google should figure out a way to monetize that isn't just maximizing clicks and optimizing ad revenue. That's so lame. I understand that advertising (in theory) could really show you stuff that you want in your life and maybe even need, but we aren't even remotely close yet.
It's clear that it's a volume "let's hit users with tons of stuff they just searched for on Amazon", not a surgical strike "let's get users to buy what they need for their own life based on all the stuff they do through our platforms"
In the last three months I've noticed three string queries on Google give me back results with two strings and then one of the strings will have a strikethrough. Sometimes this spans multiple pages. This is terrible
> Google should figure out a way to monetize that isn't just maximizing clicks and optimizing ad revenue.
After many years of things like 20% time, no one at Google has created anything that monetizes at a level close to ads. Why would they double down on what hasn't worked?
It's important to note that most engineers at Google don't actually work on Ads or anything to do with monetization directly. Most will be working on things like Search, Gmail, Android, Maps, Docs/Drive, YouTube, Chrome, etc etc.
I'm pretty sure Google doesn't really have a plan to monetize any of those things (other than ads), but I think it's also pretty cool that a small minority of the company makes enough money to let the rest do pretty much whatever.
I probably use Search the most out of all the other products in terms of volume usage per query (i.e. 1 video watch vs 1 search query) and I have noticed the search results getting less relevant to what I want over time. I'm always impressed by the speed at which they crawl but getting a strikethrough when I search something complicated is aggravating. Eventually someone will develop a superior search engine if they don't return to focusing on quality and relevance of results rather than just prioritizing paid content.
Their other option is to monetize search queries i.e. allow people to build on top of their search data - making search a platform on top of which apps can be built. Providing the ability to run queries over the returned results on any keyword.
Whether it would generate revenue I dont know but testing it out should be easy.
Pick a small country - provide full unlimited search API access for a year to anyone and see what gets built.
Mobile exploding doesn't mean PC will decline. There will always be demand for larger screens, better hardware, keyboard, mice and productive as well as entertainment software that takes advantage of all that.
PC sales have been declining, for years. No-ones saying there wont be demand for PC's in future - just that the demand is lower than mobile computing devices.
How are smartphones not Personal Computers? Less than 1% of the code and hardware on an iPhone is cellular phone.
They meet anyone's definition of a personal computer. You can draw a straight line from the first Macintosh to the iPhone. The fact that they evolved out of the phone form-factor and are called "smartphones" may be confusing but it's also irrelevant.
Every time I travel (or am away from home for over a day straight on a weekday) I get a bit of anxiety from having to work on a laptop because it is so much less efficient. It is nearly impossible to be a company with say a couple employees total & stay competitive in saturated markets when one of the employees is on a laptop which lowers their working productivity by about 50%.
As a bonus, on my last trip, my laptop's hard drive had a corruption issue which I couldn't easily fix without wiping the drive. I should have had a backup laptop with me. Luckily I was able to borrow my wife's Windows Surface Pro & was flying back the next day after my laptop broke. But from my fear of working on laptops I really think the people who mention doing all their work from the phone are either crazy or they are thinking far into the future or they count chats / meetings at coffee shops as encompassing most of their work. :)
Granted, cell phones might eventually might get much better with keyboard and display hookups, but even the frequent moving them around (and the smaller size causing hot components to be closer together) makes them more likely to eventually run into some sort of issue than a desktop computer which just sits there & has more space to dissipate heat and such.
So your claim is that the demand for actual computers (the things with large screens and keyboards) is not going to be 0. You are right, of course. In terms of the market share of total technology "gadgetry" with computing capability, however, the percentage of these computers is rapidly decreasing and will become miniscule pretty soon.
And yet, I expect that those laptops will be the ones doing most of the hard, creative, technical work. There will be less of them than mobile devices, but does this mean they'll be less important? If anything, they'll be more important than ever!
This discussion is not about some abstract concept of value. Here value means cash money. There will likely be 100x-10000x more smartphones to laptops ratio, and most of the ecommerce will be done with the smartphone. Buying things on the web is what makes companies like Google valuable. Because of this, being ready for the majority of the Internet use to come from smartphones is going to be a big factor in their long term success.
Post-PC sounds weird for me, because a smartphone is becoming a Personal Computer, especial if you attach it to a big display and keyboard, and if it will be able to run a full OS like hopefully the Windows 10 (which is technically very possible with the Intel CPU phones). At that point only the size and the lower (but useable) performance will be the difference.
There will be a future where the way people use computers looks very different from the way they did in, say, 2005. But calling that future "Post-PC" is purely ridiculous. There will still be PCs, people will still use them. Laptops didn't get rid of desktops and tablets/phones won't get rid of them either.
It really shouldn't need clarification: "Post-PC" doesn't mean PC's are eliminated from existence becoming a footnote in history, it means that more people will use mobile devices as their primary method of computing.
A more meaningful event would be when mobile devices become self-hosting. Then can we truly talk about post-PC. Until then, they're just a really widespread toy.
I've plugged my phone into my computer 2 or 3 times in the last year.
When I was doing mobile device I'd do it more often of course, but using that as some kind of line is like saying that computers haven't taken over cars because you can't program you car in your car.
I actually don't think Google is in particularly great shape. They are still overly reliant on search and advertising revenues and their hold over the Android platform isn't particularly strong (only via Google Play Services). They also haven't demonstrated really any skill at product management with so many failed efforts and overlap between apps/services.
It's also confusing where Google is going with some of their acquisitions e.g. Nest was expensive and arugably unnecessary and the self driving car is solid technology with very poor product positioning i.e. existing car manufacturers have their own technologies and don't want to bet their business on Apple/Google.
It seems like Google desperately wants to be a consumer company like Apple when in fact they would be much better servicing business and diversifying their revenue stream. AWS and Azure Cortana for example both should have been available from Google years ago.
>I actually don't think Google is in particularly great shape. They are still overly reliant on search and advertising revenues
I also don't think Apple is in particularly great shape. They are still overly reliant on the iPhone. What's going to happen when people stop buying iPhones? What is Apple going to do? Apple is also desperately looking for that next big thing.
>their hold over the Android platform isn't particularly strong (only via Google Play Services)
It's never been stronger. An Android phone released without Google Play Services and the Play Store, outside of China, is as good as dead in the water. Google is also the steward of Android contributing nearly all of source code and doing all of the R&D. Without the stewardship of Google, the gaggle of OEM clusterfucks would be releasing incompatible smartphones to lock customers into their ecosystems.
>It's also confusing where Google is going with some of their acquisitions e.g. Nest was expensive and arugably unnecessary and the self driving car is solid technology with very poor product positioning i.e. existing car manufacturers have their own technologies and don't want to bet their business on Apple/Google.
Nest is going to be Google's IoT company, I believe, and they're going to play an integral role in defining their vision of IoT. As for their self driving cars - the same could be said about Tesla and look what happened there. It's all about disrupting industries, not trying to make deals with the players.
I'm not sure anything you wrote is very accurate beyond the reliance on web search ads. Their hold on Android is very strong and is an amazing demonstration of product expertise. Nest will likely continue to make inroads into the home. Google still appears to be the self-driving car leader and it's easy to see how that could be an incredible business for it. Considering Google search and Android are (humongous) consumer products, I have no idea what you mean that it "wants to be a consumer company".
I'm very surprised parent-of-parent got so downvoted; I agree the point isn't very rigorous (as parent argues), but parent-of-parent isn't particularly less rigorous or more incendiary than average HN comments.
There are plenty of solid reasons to doubt Google given the points that parent-of-parent draws:
* Android was purchased and has plenty of product sharp edges. E.g. there are several ways to send texts. There's the issue of fragmentation. The new Google Photos has embarrassing auto-tags for African-Americans. Google has a solid whole product right now, but so did RIM. They will need to push really hard on projects like Tango and Project Fi to compete in future markets.
* Google is the most published self-driving car manufacturer, but w/out a shipping product they aren't clearly a leader. All early reviews of their car indicate that it's currently too conservative. There's also an issue: do people actually want the whole product? It looks like Tesla and Mercedes will very likely beat Google to market with core self-driving features.
I agree with parent-of-parent that Google appears to be trying to position itself more aggressively in many consumer product markets. Google is an excellent technology company, but most of their products have been niche hits. There's plenty of room for their competitors to leverage better customer relationships to own good chunks of the markets that Google seeks to own.
>Android was purchased and has plenty of product sharp edges.
It was purchased 10 years ago. What's left of the original purchase exists in name only.
>There's the issue of fragmentation
Speaking of fragmentation. How well do new iOS apps work on older iOS devices like the iPhone 4? I'm guessing not very well and probably not at all. App fragmentation on iOS is the real problem.
>The new Google Photos has embarrassing auto-tags for African-Americans.
It's an algorithm. It made a mistake and it learned from it.
>Nest is garnering a reputation for being untrustworthy.
There's precedent with Youtube Music Key. $10/month is a lot to pay for removing ads from music videos alone, but given that it's bundled with the overall streaming service, it's a pretty good deal.
There's no incentive for them to do this though. Cable TV uses a broadcast model, so it's possible that ads on subscription channels is a profit-maximizing strategy. But YouTube users have independent streams of video. If some users want to pay nothing and see ads, while others will pay a little for fewer ads, and still others will pay full freight for no ads, then that's a profit-maximizing strategy and it will happen.
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[ 2.8 ms ] story [ 155 ms ] threadIt's no surprise that after the "mobilepocalypse" earlier this year we're seeing mobile profitability grow for Google.
Google effectively forced advertisers hands in bundling their inventory and is agressively raising min CPC in a number of categories (2)
And they are breaking many of their OWN rules about how aggressively one can promote advertising on mobile - excellent, and entertaining breakdown of that here -> http://www.seobook.com/google-goes-mobile-unfriendly
I don't have much of a point other than sharing some of the information behind what's actually driving these earnings, and the major changes I've seen / experienced as a guy that spends a lot with the GOOG.
(1) http://www.wsj.com/articles/googles-results-top-expectations...
(2) http://searchengineland.com/google-showing-fewer-ads-per-sea...
(3) http://www.seobook.com/google-goes-mobile-unfriendly
* http://www.zdnet.com/article/googles-mobilegeddon-moves-hitt...
Perhaps Google is trying to boost CTR / relevance in order to attract/retain the more valuable advertisers (who would probably otherwise weight Facebook more highly for its better targeting). I really wonder how much of this growth is just Google (and Facebook) extracting more marketing dollars from the biggest spenders.
Edit: looking over this thread, there are several rather mild comments that got strong downvotes. Looks like the followers of this thread were indeed inordinately pro-Google.
As for the third link, search ads are not the same thing as mobile display ads from the user's perspective. Remember that in the other case (mobile display ads), Google is probably selling those ads, too.
There are other reports out there & some of them do great breakdowns of click volume, click costs, click values & so on ... based on things like: device type (desktop vs tablet vs cell phones, or even across operating systems), branded keywords vs unbranded keywords, text ads vs PLAs/shopping ads, etc.
There are many such reports, but the SEM company which regularly puts out the best report on this front is RKG (which was bought out by Merkle last year http://www.merkleinc.com/news-and-events/press-releases/2014... and even after the buyout is still putting out great reports each quarter).
RKG's most recent report is downloadable here http://www.rimmkaufman.com/digital-marketing-report/ & it is something I read (and recommend) every quarter. :)
In the report, they stated they saw Google dramatically increase minimum CPC on own brand keywords over the past year, that brand keyword cost was up 39% YoY, and that Google was now charging brands more for clicks on their own brand terms than Bing does. You can see a quick review of their report here http://searchengineland.com/us-paid-search-growing-but-at-sl...
And there might be multiple factors in Google showing fewer ads. Some general assertions and/or hypothesis on potential drivers...
A rise in minimum CPCs on brand keywords might block out some of the lower value 3rd party arbitrage on the branded terms, Google might be showing larger ads (with more ad extensions) above the organic results & fewer ads in the right sidebar, some categories might have PLAs / shopping ads performing so strong that there is less need for text ads, in some categories (like hotel search) Google has effectively turned much of the "organic" search result set into another layer of ads via their hotel price ads, Google includes affiliate links in their knowledge graph, over time more of Google's search volume is on mobile devices with a smaller SERP interface & no right rail to show ads in, over time more of Google's search volume is in emerging markets with less shallower and less mature ad markets, etc etc etc
A few other things worth mentioning on their general economic trends: on smaller devices partners (outside of the big one in Apple) are easier for Google to squeeze out & represent a smaller share of Google's ad revenues, over the last couple years the partner network keeps comprising a smaller percent of Google's overall ad revenue (numerous sources on this front, like http://www.siliconvalleywatcher.com/mt/archives/2013/10/anal... & http://blog.pagefair.com/2014/adsense-smoking-gun/ ), Google is getting higher revenue from clicks on Google.com & their regional search properties but the YouTube pre-roll ads generally go for less money (since they are earlier in the consumer funnel than search is & have less intent than a search does) & drag down the aggregate click price (because Google counts YouTube video ad views as clicks).
One other thing worth mentioning in terms of mobile is that while the mobile click values (and thus CPCs) are lower, Google offsets that by dominating the mobile interface with ads. 3 years back I wrote this post roghummal ↗ The golden rule! He who has the something something something something etc. Don't know, don't care. Steko ↗ That seobook post has some gems: JimmaDaRustla ↗ Well, Google doesn't need to increase their search engine ranking... choppaface ↗ Google displaying Wikipedia content in Knowledge Graph has resulted in a large hit to Wikipedia's traffic (20-30%). Thankfully Wikipedia said they did not see a drop in donations correlated with Google's change. aaronwall ↗ After Wikia Search failed, there's no risk in Google further subsidizing the growth of Wikipedia so long as Google then gets to scrape back much of the value add via their knowledge graph & Wikia is primarily monetized via Google AdSense. justwannasing ↗ And the most expensive ads are Super Bowl ads as the TV networks aggressively force the hands ...
https://twitter.com/danbarker/status/439125570115223552/phot...
And they link directly to Wikipedia, driving traffic to their site, so they're not really wrongfully stealing the data.
However, for sites that do monetize through ads, Google's 'scraping' of the content is indeed stealing if the content would 'organically' draw more clicks otherwise.
It makes sense Wikimedia didn't see an immediate donation drop. In terms of a conversion funnel, the people who are using Wikipedia for the first time are not likely to donate. My guess is most of the people who are most likely to donate a small amount here or there are the regular users who regularly seek out the site. The drop in donations due to the lower exposure would take years to kick in, because now with 20% or 30% fewer users, there will also be less new future power users who would donate in say 2018 or 2019. But offsetting any decline there for a company making over a billion a month in profits shouldn't be too substantial. Sergey Brin donates a half-million a year grant to the Wikimedia foundation & Google has also donated a few million.
It is also worth mentioning the knowledge graph now often contains affiliate links for things like music, ebooks, and so on. Over time more and more knowledge categories will have paid affiliate links in them (say booking a restaurant, heading to a concert, etc.)
In some cases Google may temporarily make a link type free to try to drive adoption and awareness, but over time it will be the same sort of scrape-n-displace they've done with hotel bookings. They not only turned the "organic" hotel search listings into a second set of paid ads, but now they are also testing having some users convert and buy the hotel booking while on Google.com - just like they are doing with their car insurance offering. And they have also added links to cityname hotel searches in their knowledge graph in order to drive more people into that "almost nothing but ads" funnel.
You can see the net effect of that sort of displacement on an industry by looking at all the consolidation in travel. Expedia acquired Travelocity and Orbitz. That leaves Expedia, Priceline & TripAdvisor as the remaining 3 big players. And even with TripAdvisor Google offered them and Yelp an ultimatum to allow Google to scrape/steal their reviews & if they wanted to opt out of that theft then they could use a robots directive to block Googlebot from indexing their site. That monopolistic abuse was so brazen it actually managed to draw the interest of regulators and politicians. Eric Schmidt did a fantastic job of misdirection & fibbing at the 2011 congressional hearing (ref http://www.benedelman.org/news/040115-1.html ) but the regulatory & political reviews forced Google to back away from at least that form of monopolistic bundling.
Though, of course, the same sort of behavior continues to this day in other forms. From just yesterday there's both https://twitter.com/chrispirillo/status/624630005734113280 & https://twitter.com/jeremys/status/624675646694780928
So, iow, business as usual.
(The former has voting rights)
The A shares are essentially inconsequential right now because voting is controlled and concentrated by the B share owners.
In this scenario, the class C shares will fall dramatically because the financial value of Google will be nearing nothing, but it's likely that the value of class A shares will skyrocket. Because an activist needs virtually all of them to rest voting control from the founders, there's a "corner the market" situation where the last few remaining holders can demand very large prices for their shares.
If there is a big difference in price then that's an arbitrage opportunity for somebody, in the end all shares have the same claim on the company and will get the same payout if Google is bought or split up. In this case there would be a bunch of people buying class C shares in anticipation of the activist shareholders winning. Additionally, the price of the voting shares won't go up that much because the activist investors can't pay more than what they perceive the value of the company to be.
It's much like how Porsche cornered the market in Volkswagon shares. Until the last couple hours, the market at large had no idea how close they were to a corner.
Also, remember that the price of a stock is set at the margin, but the value of one's holdings is an average. Imagine that an investor has amassed 100M shares of Google at an average price of $20. If they get to 100,001K, the value of Google will shoot up to $50. It is rational for them to pay any price up to $3M for those last 1000 shares, because their profit if they get them all is $3B, but if they are missing even one of them, they get nothing.
Same reason eminent domain laws exist: without them, it is rational for a large organization to pay any amount up to the total value of the project to the last few holdouts that are preventing it from being completed.
It'd require one of the two of them to defect for such a scenario to come to fruition.
[1] http://www.forbes.com/sites/chuckjones/2014/04/02/google-sto...
GOOG was already a traded ticker so that never had any voting rights? or it got changed after the split?
http://techcrunch.com/2014/04/03/google-is-splitting-its-sto...
Thanks to everyone for responding so kindly and quickly to my queries.
[1] some elections may have statutory requirements that a majority of each stock class vote in favor, such as tender offers, etc.
It's clear that it's a volume "let's hit users with tons of stuff they just searched for on Amazon", not a surgical strike "let's get users to buy what they need for their own life based on all the stuff they do through our platforms"
In the last three months I've noticed three string queries on Google give me back results with two strings and then one of the strings will have a strikethrough. Sometimes this spans multiple pages. This is terrible
After many years of things like 20% time, no one at Google has created anything that monetizes at a level close to ads. Why would they double down on what hasn't worked?
I'm pretty sure Google doesn't really have a plan to monetize any of those things (other than ads), but I think it's also pretty cool that a small minority of the company makes enough money to let the rest do pretty much whatever.
Whether it would generate revenue I dont know but testing it out should be easy.
Pick a small country - provide full unlimited search API access for a year to anyone and see what gets built.
unrelenting (or relentless) probably is.
Which both look in great shape for the Post-PC future having control of the 2 most dominant mobile platforms.
I'm still not convinced.
They meet anyone's definition of a personal computer. You can draw a straight line from the first Macintosh to the iPhone. The fact that they evolved out of the phone form-factor and are called "smartphones" may be confusing but it's also irrelevant.
As a bonus, on my last trip, my laptop's hard drive had a corruption issue which I couldn't easily fix without wiping the drive. I should have had a backup laptop with me. Luckily I was able to borrow my wife's Windows Surface Pro & was flying back the next day after my laptop broke. But from my fear of working on laptops I really think the people who mention doing all their work from the phone are either crazy or they are thinking far into the future or they count chats / meetings at coffee shops as encompassing most of their work. :)
Granted, cell phones might eventually might get much better with keyboard and display hookups, but even the frequent moving them around (and the smaller size causing hot components to be closer together) makes them more likely to eventually run into some sort of issue than a desktop computer which just sits there & has more space to dissipate heat and such.
What does that mean in this context?
I've plugged my phone into my computer 2 or 3 times in the last year.
When I was doing mobile device I'd do it more often of course, but using that as some kind of line is like saying that computers haven't taken over cars because you can't program you car in your car.
It's also confusing where Google is going with some of their acquisitions e.g. Nest was expensive and arugably unnecessary and the self driving car is solid technology with very poor product positioning i.e. existing car manufacturers have their own technologies and don't want to bet their business on Apple/Google.
It seems like Google desperately wants to be a consumer company like Apple when in fact they would be much better servicing business and diversifying their revenue stream. AWS and Azure Cortana for example both should have been available from Google years ago.
I also don't think Apple is in particularly great shape. They are still overly reliant on the iPhone. What's going to happen when people stop buying iPhones? What is Apple going to do? Apple is also desperately looking for that next big thing.
>their hold over the Android platform isn't particularly strong (only via Google Play Services)
It's never been stronger. An Android phone released without Google Play Services and the Play Store, outside of China, is as good as dead in the water. Google is also the steward of Android contributing nearly all of source code and doing all of the R&D. Without the stewardship of Google, the gaggle of OEM clusterfucks would be releasing incompatible smartphones to lock customers into their ecosystems.
>It's also confusing where Google is going with some of their acquisitions e.g. Nest was expensive and arugably unnecessary and the self driving car is solid technology with very poor product positioning i.e. existing car manufacturers have their own technologies and don't want to bet their business on Apple/Google.
Nest is going to be Google's IoT company, I believe, and they're going to play an integral role in defining their vision of IoT. As for their self driving cars - the same could be said about Tesla and look what happened there. It's all about disrupting industries, not trying to make deals with the players.
There are plenty of solid reasons to doubt Google given the points that parent-of-parent draws:
* Android was purchased and has plenty of product sharp edges. E.g. there are several ways to send texts. There's the issue of fragmentation. The new Google Photos has embarrassing auto-tags for African-Americans. Google has a solid whole product right now, but so did RIM. They will need to push really hard on projects like Tango and Project Fi to compete in future markets.
* Nest is garnering a reputation for being untrustworthy due to absurd bugs like: https://www.youtube.com/watch?v=BpsMkLaEiOY
* Google is the most published self-driving car manufacturer, but w/out a shipping product they aren't clearly a leader. All early reviews of their car indicate that it's currently too conservative. There's also an issue: do people actually want the whole product? It looks like Tesla and Mercedes will very likely beat Google to market with core self-driving features.
I agree with parent-of-parent that Google appears to be trying to position itself more aggressively in many consumer product markets. Google is an excellent technology company, but most of their products have been niche hits. There's plenty of room for their competitors to leverage better customer relationships to own good chunks of the markets that Google seeks to own.
And how is this a sharp edge?
> There's the issue of fragmentation.
July 2015 and still talking about fragmentation? What problem do you think is fragmentation?
> The new Google Photos has embarrassing auto-tags for African-Americans.
ONE case and has nothing to do with Android
> Google has a solid whole product right now, but so did RIM.
And this can be said about Apple or Microsoft
It was purchased 10 years ago. What's left of the original purchase exists in name only.
>There's the issue of fragmentation
Speaking of fragmentation. How well do new iOS apps work on older iOS devices like the iPhone 4? I'm guessing not very well and probably not at all. App fragmentation on iOS is the real problem.
>The new Google Photos has embarrassing auto-tags for African-Americans.
It's an algorithm. It made a mistake and it learned from it.
>Nest is garnering a reputation for being untrustworthy.
Hasn't this been addressed by Nest?
Honestly, chances are that you don't. Everyone says they will, few do.
I can verify all of these statements.
https://www.youtube.com/watch?v=ML_ec6XRYQA
https://www.youtube.com/watch?v=--LIrN-5PQo