Quarterly reports are used for estimating second order derivatives aka growth of growth, which are very noisy. So friends don't let friends use quarterly reports without smoothing :).
That aside, one thing I have never understood is why Google shutdown their Product Search and then re-incarnated as some half-assed effort. When Google's product search was alive and well, I often used that for comparison shopping, finding related products etc. I'd hopped one day they would add integrated payment, inventory and offer a viable platform for lot of retailers who have no real IT departments to compete with Amazon. I also thought this was perhaps much higher valued search (intent to buy!!). Instead they shut down the whole thing. Now Amazon is the only well known comprehensive place for product search. It looks to me Google handed over one of the most lucrative search segment to Amazon on a silver platter and now we are seeing the result of that decision.
Google shut down their product search because of antitrust issues. It took a while before they realized that they were about to get into real trouble. Hence the “half-assed” replacement.
Yeah, evaluating stocks based quarterly reports accuracy always feels like a bit of a fools errand. The heuristic I use for dips in a stock is always “how many days of value did this erase?”. It keeps me sane when looking at large dips.
The most recent time Google was at this value was early April. The earliest time Google was at this value was July 2018. Google’s stock valuation has clearly stagnated a by that second metric, but definitely not by the first. This quarterly report didn’t encode much more than a bust of the pre-earnings run-up.
They tried a bit of that with Google Shopping Express. Unfortunately that turned into a me too product versus when it launched you could get same day delivery from a variety of places.
"Quarterly reports are used for estimating second order derivatives aka growth of growth, which are very noisy"
Perhaps, but they have shown double digit YoY growth that exceeds general internet growth for many years.
Personally I think it's largely because, for lucrative queries, everything above the fold is now an ad. Ads that have been tweaked and a/b tested to oblivion. Hard to grow on growth when your best trick is mostly played out.
Is this actually true? Assuming that the top queries are still things like "mortgage", "lawyer", etc, when I search those terms, my above the fold are a Google Maps box with local results, a Wikipedia box, and a single organic Yellow Pages link.
Now, "personal injury lawyer" is indeed all ads for me, but on the whole, I feel like I'm seeing fewer overall explicitly sponsored links than was the case 5-10 years ago.
When I searched "mortgage" just now, the first four results on the page were advertisements. The fifth and final result on the first page, of which only one line was actually visible without scrolling, was a mortgage calculator website. On the right side of the page there was another ad with graphical links to mortgage companies.
I guess for those queries it depends on lot on what the ad spend is in your particular locale, since you want those particular businesses to be close by. We certainly have plenty of lawyers and mortgage agents here in Kitchener, but perhaps they aren't big into advertising on Google.
Then there's a map. Of Seattle, because that's where Google thinks I am (it's off by a couple hundred miles), with mortgage-related businesses shown. Below that, we get to "People also ask" and finally, links that are not marked as advertisements.
On the right side of the screen I have links for Annaly Capital Management, Fannie Mae, Freddie Mac, AGNC Investment Corp, and Wells Fargo.
Writing this out made me think more seriously about DuckDuckGo. Going there and searching for "mortgage" is ... refreshing.
The ad targeting might be locale-specific, but the companies advertising aren't.
In the NY area, I also get 4 ads as the first results for "mortgage", from lendingtree, consumeradvocate.org, mortgage-loans.thetoptensites.com, and bankrate.com.
They may do geo-restriction just to reach the largest number of people with the smallest spend, or something like that.
The other person's point stands though, for many searches you don't get many non-ad results on the first page.
Yes it is true. Even if you use an adblocker and don't see explicit ads, for popular queries all the top results are highly SEO tuned and have paid for this placement in a different way than buying an ad directly from google. But it's an ad nonetheless.
Google Maps results - ads
Yellow Pages - Yellow pages are the original local ad! "organic", sure
Wikipedia - an ad for wikipedia itself
Quora, stackoverflow, etc - highly tuned ads
Many of those results are actually useful and don't want you to buy something from them, they want your attention. And ... we are in an attention economy today.
Amazon's and Facebook's ad revenue have gone up significantly in the past quarter, so this is not a story about the decline of the online ad business. It is about Google not competing in that business as well as it used to.
I still have Prime but more and more I find myself buying from other online sources. Either because the selection is better or the price is better.
But that made me realize: Amazon's profit lies with AWS, the infrastructure that was originally for their ecommerce operation. But their ecommerce has forced many other retailers to streamline their operations... I wonder how many ended up using AWS as part of that effort.
Out of choice, seeking growth, which provides value by way of equity.
The point being that, at least on its own platforms, Amazon's interest is in sales generation, not ads turnover. Direct comparisons between Amazon and Google ads misses the point.
I always shit on Facebook in the past but I have to be honest, their ad campaigns don't require buyers to do keywords research which is often a major pain. In addition, they seem to know a lot more about their end users so it's easier to target the exact customer groups you want. Years of unethical privacy practices have probably given them certain advantages in this area. I was completely horrified when I learned you could upload a CSV list of all your customers email addresses and FB will match and display ads to this exact group.
At least on Facebook I feel like I personally have a little more control over how/when/where my ads will appear as opposed to Google's process where much of it is dictated by their algorithms. Not a fan of Facebook still but I can totally see why their ad products are working well for some businesses.
However, there isn't an infinite amount of advertising spend and consumer time on the internet - people who spend those things in Amazon and Facebook's + etc's ecosystems can directly and indirectly chip away at Google's advertising market share.
Globally internet access is still growing at an incredible rate. Hundred of millions of people are accessing the web for the first time every year. It'd be really weird if Google wasn't seeing a lot of that growth affect their revenue.
Most of the people who are accessing the web for the first time are from poor countries like India and Indonesia, so the effect on Google's revenue is much smaller than the number of people would suggest. Other drivers of Google's growth are just as important: (1) People who are already connected to the internet are getting richer and are spending more time online; (2) Google continues to improve its algorithm matching advertisers to users
OTOH, a lot of those markets coming on stream might have a lot of "zero-rated" providers - Google makes a lot of money from ads when people search on the open internet. Less so when most of their activity is restricted to a few apps because consumers don't have to pay for the data use.
Oh, it's because they're a monopoly. Google has a lot of products that people have to use because of the dominance of other products, platforms, or standards that Google controls. So as long as global growth is strong and more people are using the internet, Google will grow amazingly.
If, on the other hand, Google were in a competitive environment, you'd see it growing depending on whether its products were getting better and better.
But as observed in this thread, Google search is entirely ads above the fold. Gmail is becoming a Google controlled proprietary protocol. Etc. etc.
This. Google (and Facebook) can generate more revenue by leveraging the accumulated users personal information in more invasive ways, irritating their end users. They can sacrifice long term growth for short term gain (or not). I think some of this short term growth slowing is due to that - pulling back from the most egregious practices because of scrutiny.
Google at it's value is still growing at 15% plus. I see some relation with Google growth and the world economy at large. This year the economy has been sluggish so are Google result.
Because FB is killing it with its Marketplace and because for a lot of people FB has become synonymous with the Internet. I’ve become an outlier among my circle of acquaintances because I still google the name of a specific restaurant or coffee shop we intend to go to, while my friends go directly on FB and search for the restaurant’s name in there (or even on IG to look at the restaurant’s most recent stories to see what its holidays open hours are).
Hence why the google spokesperson or whatever her official position is mentioned something about their revenues being negatively affected by currency fluctuations, that is usually double-speak for “we did bad in foreign markets”, which is to say that the US market is not the only market that counts.
Also, more time spent by people on FB Marketplace (no matter if they make money on it or not) means less time spent on Google’s web properties. I would also look at the age demographics, Google the brand was seen as cool by me and my age-cohort back when we were in our early 20s, so that most of us still use it 15 years later as we approach our 40s. But I suspect that the Facebook and especially the Instagram brand mean a lot more to people under-30 compared to what Google means.
Google the company had seen this coming by late 2010 at least, that is that FB (or whatever social network will become dominant) will become synonymous with the Internet, much as Google was back then. That’s why they resorted to desperately-sounding battle cries involving the number of arrows and the volume of wood material in order to convince their workers that they need to build a product that would not let FB become the only player in town. Unfortunately their Google+ execution was poor and here they are now, looking from the outside at a walled-garden.
I don’t know if that double speak conclusion makes much sense. If they were doing bad in foreign markets and the share of revenue there was negligible, currency fluctuations would have no impact.
Actually, it’s the inverse, where currency fluctuations only start to have an effect when you have significant foreign revenue
> Actually, it’s the inverse, where currency fluctuations only start to have an effect when you have significant foreign revenue
I do think Google has had a "have significant foreign revenue" for quite some time now, otherwise they wouldn't have reached almost a $1 trillion market valuation, it's a strange thing though that only now they've started putting the blame on "currency fluctuations", a move which is usually made by non-cool businesses like retailers or copper-miners (to name just a few), not by Amazon and Google (at least not until now).
Maybe I'm just a little bit too cynical when it comes to how business is done nowadays, but in the case of those retailers and copper-miners I just mentioned blaming "currency fluctuations" it's just a way of not acknowledging to their investors that "hey, we didn't do our homework in terms of execution oversees, but let's blame it all on FX, it's not like even the central bankers know how this currency thing even works". Like I said, maybe I'm just cynical, but I see Google playing the same defect-the-blame game, especially as the Google representative repeatedly refused to come with any other details about this (presumably by the next conference call she'll be surprised to hear that FX hedging is actually a thing that most of the time works quite well).
The bar chart in that article, where the y axis apparently starts at 14% and change - it's really hard to think of journalists as sources of truth when they use such blatantly deceptive graphics.
Sorry, but you (and parent) seem to be misinformed on all counts. This chart is both entirely normal and makes complete sense for anyone with a financial background, as can rightly be assumed for a Bloomberg or WSJ reader.
- Financial charts commonly don't start at 0%, e.g. look at any stock chart ever. No one ever assumes it does. This is to maximize clarity of differences, otherwise a lot of financial charts would have very small differences on top of very long bars, which would be much harder to read
- Percentage change is the correct metric when the title is "growth slows". If direct revenue were shown then readers would need to compare slopes rather than than heights, which is much harder, confusing, and less clear. (Direct revenue would be appropriate for a chart titled "revenue drops", but this story is about growth, not revenue, so that would be the wrong chart.)
- YoY percentage change is a normal metric to use on a quarterly or monthly basis precisely because it removes seasonal effects, see [1]. There is nothing nonsensical about it whatsoever.
This article and chart assumes a reader who is financially literate. It is not deceptive in any way, but rather follows best practices.
Despite the dripping holier-than-thou tone of your post, I believe it is you who are misinformed:
> Financial charts commonly don't start at 0%, e.g. look at any stock chart ever.
Which is why those types of charts usually are line charts, or candlestick charts. The only reason to do a chart like this as a bar chart is to deliberately overemphasize the size of the difference between the quarters. A bar chart with a non-zero baseline is a horrible way to display this kind of data.
> This is to maximize clarity of differences, otherwise a lot of financial charts would have very small differences on top of very long bars, which would be much harder to read
Well, using a chart with a zeroed axis seems to work just fine for the very next chart in the article.
It’s not holier than though, it’s a simple factual rebuttal.
The purpose of the chart is to highlight change. showing a 0-100% range for data that shifts within a couple of percentage points makes the change difficult to see
The second chart starts at zero because the lower bounds of the data are much closer to zero. It still tops out at 70% to highlight the change.
It doesn’t matter if it’s a line or bars, the data would look nearly flat with a 0-100% range — and for what reason?
It is you who has assigned a special value in your mind to 0 and 100. There is nothing constraining real data to those limits. Growth can be negative or above 100. Those values are no more magical than 12 or 27 or 1444.829.
> the data would look nearly flat with a 0-100% range — and for what reason?
To show honestly that the change is barely noticeable.
An even more useful chart would have a y-axis from -50% to 50%. Then readers could see clearly that revenues were still growing, just not quite as fast as last period and well above any risk of contraction.
>To show honestly that the change is barely noticeable.
Any claim that the chart is misleading would have to show that it is disproportionate relative to the impact of these "barely noticable" changes on discounted future cash flows, which is the rational basis for stock valuation. These changes, if sustained, are potentially very significant.
>Then readers could see clearly that revenues were still growing
But the target audience already knows that because it's a simple headline number. The chart zooms in on a particular aspect that matters a great deal to that audience - for good reason.
>using a chart with a zeroed axis seems to work just fine for the very next chart in the article.
It actually has an axis at around -6, hence why the bars are floating above the axis. Looks like they do this to make it clear which graphs are full range and which are clipped, as the clipped ones touch the axis.
There would be no value to a chart that shows quarter-over-quarter growth, especially in a seasonal industry such as advertising. There is always a drop from Q4 to Q1 in ad revenue, simply because companies spend heavily on advertising around holidays.
I find it frustrating that so many of the suggestions in this thread for cleaning up these charts would actually lead to much more deceptive (even clickbaity) visualizations.
I agree. My point was by showing sequential quarters in the x-axis, that comparison is very hard to make. Instead the reader is probably more focused on quarter to quarter change.
A better graph would be q1 revenue of the past 10 years in the x-axis.
> Also, charts like that are very common in financial publications. The target audience knows how to read them.
Yea, I've never really understood this complaint. Except in publications targeted only at the most ignorant or innumerate audiences, it's ludicrous to claim that the only magnitude of change that can matter is one that's visible on a 0-100 scale.
Ignorant and innumerate audiences do exist, but this isn't a general-purpose argument against ever having enough respect for your audience that you can use the scale that lets you most accurately convey the data.
So you are saying reporters don't have any say in what images appear as part of their reports?
I'm not saying "any" say, but in my experience working for two major newspaper companies, it's not a given. There are other people who decide that. Again, it's not a blog.
How is the WSJ's credibility any better than a blog?
>The Wall Street Journal is the most trusted news source in the country, according to the index, with 57.7% of Americans trusting it.
All polls are biased based on how you ask questions.
https://www.forbes.com/sites/tonysilber/2018/10/03/the-wall-...
I'd say little more than half the poll is about as irrelevant as a blog. Either you trust something because of confirmation bias or you don't.
Disregarding blogs as somehow being less credible, holds traditional media to a higher standard which they have chosen to abandon for partisan reporting over the past 10 years.
Other random sources for comparison/counterpoints:
https://mediabiasfactcheck.com/wall-street-journal/https://poorvucenter.yale.edu/writing/using-sources/principl...
How is the WSJ's credibility any better than a blog
If you seriously don't know the difference between a 129-year-old newspaper that has won countless journalism awards, has broken world-changing news, is respected both among its peers and by millions of readers versus some rando blog, then I really don't know what to tell you.
WSJ takes huge legal risks in order to provide honest, ground-breaking reporting that makes society better. They were responsible, for example, for the Theranos exposé.
It doesn't matter who does it. What matters is as the end user reading that article this is pretty misleading. So from that standpoint, the journalist writing the article is implicated by default since he/she literally writes their name on the article. And frankly they should feel responsible for it.
Maybe I'm an outlier, but I don't find properly labeled charts deceptive at all. There is no hard rule that all charts must have an axis at zero, and charts that fit this template are not necessarily more valuable or informative than those that don't.
> There is no hard rule that all charts must have an axis at zero
Starting at something other than zero is like, the #1 thing that cable news channels do to make charts flashed on the screen for a few seconds look exaggerated.
And for a chart like the one shown in the article, there's no reason to not start at 0 unless you're trying to exaggerate the differences in values.
>Starting at something other than zero is like, the #1 thing that cable news channels do to make charts flashed on the screen for a few seconds look exaggerated.
In this case however it is not being flashed on the screen for a few seconds, so we have plenty of time to read it and notice the axis labels, then argue in the comments that the label that we read is deceptive because people might not read it.
Also, if labelling the y axis on this graph as something other than zero is deceptive, should the x axis start at the beginning of time?
... Or show the difference more clearly. It's about visual dynamic range. Nothing wrong with it. Maybe the problem is people assuming that every x and y axes always start at 0.
Why should it start at specifically zero though? Growth can be, and often is, negative. Shouldn't it start at -50 to be sure? The point of the chart is exactly to show ("exaggerate") the difference in values!
0 is merely a convenient numerical value that also has business meaning - no growth. You can then contrast any numerical value with this, 10% meaning it grew by a fraction of .1, and so on. For most percentage quantities, it usually makes sense to start at 0 if that has some business meaning.
Cable news channels have a problem of not labeling their axes at all, or having proportions that don't match the labels that are there. Like pie charts that show <40% as being roughly half. And then not providing enough time for viewers to fully understand the data.
> There is no hard rule that all charts must have an axis at zero
Of course, but the charts are a vehicle to show casing data, and this specific one intentionally misleads viewers. I'm not sure if it was due to ill-intention or ignorance, but charts like that go against everything charts are for in the first place.
I am surprised that no one mentions about their Waymo / Verily revenue potentials. I genuinely believe those will have even bigger potentials than ad sales for Alphabet.
Elon Musk recently said LIDAR system was just too expensive and unnecessary as he's betting on using Tesla's video cameras for their own automated driving. I guess we'll have to wait and see.
humans have a brain that's difficult to reproduce in an economical fashion so far; tech can't even saccade the current cameras to track moving objects with clarity
That's a nearly unique position among autonomous vehicle people. He's correct about LIDAR costs, for now. The question is: "How long is 'now?'" Unless there is something fundamentally wrong with the idea of MEMS LIDAR, Musk's statement is something like "Rotating memory will never be cheap enough for X" when SSDs are coming.
No we haven't. Just because you have a narrative in mind doesn't mean it is true. If we had achieved peak advertising, other advertising companies such as FB should also show slow growth - but they aren't.
Avertising has been around since at least the industrial revolution, I don't see why it should go away soon.
That said, we might be above sustainable levels of advertising, so the market might be forced to shrink (either voluntarily or involuntarily though ad blockers).
I ran across a recent FB stat whose overwhelming prevalance in mobile (90%+) was staggering. Google may gain on Android, but has to lose, again, relatively, on search.
I'm not sure where the parent is getting 15%; Google seems to be up ~23% YTD. Today's close was an all-time high, though that might get somewhat undone in the morning.
To your point, that seems to be a bit worse than tech (~26% YTD) but better than the S&P (17% YTD).
That makes sense to me, the ads seem to be more irritating and less appealing. I am unlikely to include them in anything I host because the value they add is negative
GDPR has largely been ignored on the webmaster-side, so I don't believe that's a large factor. Especially since you can pretty much do whatever you did before, you just need to mention it in your privacy notice.
I've yet to see actual cookie consent banners on a meaningful scale. So far, cookie notices have been rolled out, so you'll get a sentence or two and an OK button. There's usually no option to deny, and even those that do add it, don't do so in a way that matters: if you click No, cookies for analytics, ads etc have already been set.
Then there's this whole topic of third party cookies. Do you only need to inform & gather consent for cookies you set, or also those that services set that you embed in your site?
"Google owner Alphabet misses forecasts: Google's parent company, Alphabet, saw its shares drop in after-hours trading after the internet giant missed revenue forecasts"
Interesting. So they're reporting on a competitor and are known to try to move markets with their stories. Is there oversight? Since I have no legal training I ask naively, do protections for journalism cover a situation where reporters aim to influence and persuade (like editorials) rather than provide "just the facts?"
Given that the newspapers at the founding of the republic were nakedly partisan and biased and the founders were well aware of it, yes, the first amendment protects journalists who produce biased bullshit.
You can only be prosecuted for slander and libel, and there is a high bar to prove it.
People keep repeating that here on HN as if it's a bad thing.
New information moves markets, and the larger impact it has, the more it will move markets, because markets are built on information. And obviously the function of the free press is to uncover and disseminate new information, the more meaningful the better. So it's not underhanded -- it's noble and completely aligned with good.
(Of course if reporters make up information or lie it's bad, but that's a separate issue, for which lazy or unethical reporters are generally fired.)
"Free press" doesn't mean you can skew facts to paint a deceptive picture as in this case, you can see the graphs. This is the same Bloomberg that reported about the Super Micro story and we all know what happened.
There should also be some accountability and you can't just shrug it off because you're the "free press".
Doesn't surprise me. The value of their ad products is deteriorating rapidly. For instance just today we found that one of our UAC campaigns, which supposedly is super smart and will automatically find the best channel for you decided to switch to a new channel with 14x higher CPC than the other channel that was working very well. That new CPC was 2x our target CPI. Why on earth they don't put in limits to prevent stupid bids like that is beyond me.
(Going back over a decade) I guessed Google was under-monetizing, and then they could just keep slowly turned the knob, and the indicator was when they couldn't turn that monetization knob any more.
Google's Ad platform is at this point now. It has turned in to this jumble of UI anti-patterns and dark patterns. Each successive rollout of a new feature is basically, add more text we can test and relinquish your bidding control to us. At a slow, incremental pace this works. Eventually, however, they max out either what the advertiser can budget, or remove enough of the advertiser's ROI that it doesn't work any more. Then the risk becomes, rather than failing to grow revenue, that they actually collapse it.
One of the things that stuck with me the most, was many years ago Yahoo would go in and change the text of your search. That was egregious on many levels. The non-self service display ad networks would make you jump through a bunch of hoops to run a campaign and then make it as hard as possible to stop the campaign without it being fraud. Adwords, on the other hand had none of these problems. It worked fantastically. Not anymore.
Agreed, even on boring old paid search the new search suggestions are driving me crazy and I can't see a way to easily turn them off?
It's changed some very niche campaigns from CPC bidding to CPA bidding and performance dropped by about 2/3rds until I noticed and switched back. But it's trying to auto apply CPA bidding again. Losing the will to live fighting the endless BS Google throws at ads now.
Isn't great that exact match doesn't mean exact match? Or, isn't it great that your ads and landing pages routinely outperform the supposed Quality Score? Isn't it great that...
The major shifts in Google products, with numerous high-profile cancellations, have made me suspect weakening of fundamentals, or other threats, possibly regulatory or legal.
This news supports (though doesn't clearly prove) the former.
Product cancellations are just part of Google's culture. They have been doing it for years, including at times when they had very good financial results. It is not a sign of anything other than Google being Google.
In particular it is the result of two unusual characteristics of Google's culture: work supporting legacy code is valued much less than it is at other companies, and launching a new product is by far the best way to get promoted.
FWIW: The latter is often thought but this isn't really supported by data AFAIK (or at least any data i've ever seen computed on the subject)
As anecdote: My org has historically been one of internal infrastructure, maintenance, fixing apis, etc, and our promo rate is much higher than most orgs that launch products.
> two unusual characteristics of Google's culture: work supporting legacy code is valued much less than it is at other companies, and launching a new product is by far the best way to get promoted.
This has been the case at all companies I ever worked at. I don't think there's a place where supporting legacy code is highly regarded and ensures your promotion.
Yes, people get promoted for launching products, but they don't get un-promoted when the product fails 2y later, which most of them have, including 10O% of moonshots so far.
Moonshots are supposed to be high-risk speculative projects. Failure is the most likely outcome. You cannot expect good people to take a chance working on moonshots if they will be punished when they fail.
That aside, one thing I have never understood is why Google shutdown their Product Search and then re-incarnated as some half-assed effort. When Google's product search was alive and well, I often used that for comparison shopping, finding related products etc. I'd hopped one day they would add integrated payment, inventory and offer a viable platform for lot of retailers who have no real IT departments to compete with Amazon. I also thought this was perhaps much higher valued search (intent to buy!!). Instead they shut down the whole thing. Now Amazon is the only well known comprehensive place for product search. It looks to me Google handed over one of the most lucrative search segment to Amazon on a silver platter and now we are seeing the result of that decision.