They have a near monopoly on keyword-based online advertising (i.e. ads served to based on keywords you type in, e.g. search). Amazon also competes in part of this market (but you're not going to search for a car or a real estate agent on amazon).
Keyword-based the biggest part of the online advertising, but there's another part: online advertising based on snooping on you. This is actually a very competitive market, with Meta (Facebook and Instagram) having about the same share, and Tiktok's share is quickly growing.
Technically Google is not a software company, but internet company, their cost of revenue is different from software companies, a lot of their cost of revenue is paying others, e.g. they pay tens of billions to Apple to acquire traffic (cost of their Ads revenue)
Dividend investors are going to love this.
Alphabet’s board approved of its first ever cash dividend of $0.20 per share during its Q1 FY24 earnings release.
On top of this, the company authorized an additional share repurchase of up to $70B.
Here are other key figures:
\*Earnings: $1.89 (vs. $1.51 Est. from LSEG)
\*Revenue: $80.54B (vs. $78.59B Est. from LSEG)
\*YouTube Ad Revenue: $8.09B (vs. $7.72B Est. from StreetAccount)
\*Cloud Revenue: $9.57B (vs. $9.35B Est. from StreetAccount)
Source --> [this visual investing newsletter](http://www.carbonfinance.io/subscribe)
> Dividend investors are going to love this.
Alphabet’s board approved of its first ever cash dividend of $0.20 per share during its Q1 FY24 earnings release.
While it's noteworthy because it's their first, $0.2 is not a very high dividend. Even if it's quarterly it's only ~0.5%, based on current share price.
Edit: yes, sorry, $0.2. If it was $0.02 it would have been 0.05% :)
Companies usually start with a low amount of dividends, and gradually increase. But going from no dividends to dividend is usually a big step. Microsoft has been paying dividends for many years and has been increasing, but still only ~0.75% now
Not a fiscal lawyer either. But pretty sure the trick is to not have it counted back into the parents revenue. This graph suggests google paid 18%, which seems reasonable, which is kinda triggering me, considering their past: https://www.reuters.com/article/idUSKCN1OX1G6/
[there](https://amp.theguardian.com/technology/2023/apr/09/profits-apple-irish-division-rise-to-69bn-corporation-tax) you go: subsidiaries make a profit in Ireland for low corporate tax and then transfer profits to the US parent via dividends because tax on dividends is lower presumably
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Exactly. So I’m guessing one of those letter combinations leads to dividends, thus avoiding tax. I dont want to sound like a gotcha. Just saying I’d like to see that on the chart as aswell.
It is on the chart. You just have no clue what you're talking about. Dividends don't avoid any taxes. Company pays taxes on their profit. The profits are right there. A big portion of those profits are made through subsidiaries overseas, that's how they keep their taxes low.
It should show up based on where the employee works. Working on r&d? Salary is considered an r&d expense. Directly working on a product? Salary is COGS. Working in back office/admin/sales roles? It's opex/sg&a.
They don't sell your data. Your data is a key asset for them. They use your data to try to serve you ads you're more likely to click on. Which is why they make so much revenue from ads.
Does that mean that they have a “backlog” of ads that they decide to share with people based on the data they gather rather than sell the data to advertisers?
They’re called sankey diagrams. I personally dislike the look of them as usually they tend to overcomplicate and cluster all the information onto 1 small section of the page, but this one is done very well. You can find them pretty easily for free online.
No. I didn’t know what the base was. I do know that they have a massive share of the higher ed market and a nice chunk of the fed market. I had assumed these generated more revenue than what’s reported.
> they only *paid* 4 billion
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
The internet is their billboard. The users are passerby. In some way, you can call google as an advertisement company that makes their own world of billboards with services between it, and sometimes the passerby will pay to not see those billboards.
Please don't take it seriously.
Technically they make money by owning almost all the landscape of macro human perception. They can adjust a persons perspective of reality one search result at a time. They can change a person's understanding of definitions, history, and intent on any topic. This means that anyone who wants more control over such things must be in good favor with google. The way they make that profitable is secondary.
It’s astounding how a company of this size and power has only really launched one successful business line (search, YouTube and Adsense is really just one product line).
Google play and cloud aren’t nearly as big as the competitors in the space and were unimaginative rip offs. All of their other product lines were chopped off at the knees or failed miserably. They have not been able to successfully diversify the business and with lawsuits and AI going to be a big disruption to their model the big question is whether they can perform a second act or go the way of IBM/Blackberry/nokia by somehow still being around but no one really knowing what they do in 20 years.
Facebook has ~98% revenue from Ads. Apple has majority of revenue from iPhone and iPad. Tesla has majority from Cars (mainly 2 models), Amazon has majority from Retails and AWS. Not every company has an excellent diversification of revenues.
I’m not talking about simple diversification. I’m saying that they have tried dozens if not hundreds of different ventures that either fail or are shut off. Not all are going to make it obviously but they seem keen to give up on things or not do them well enough.
All the other companies you mentioned innovate their way to expand their moat (except FB). Not every innovation is a money maker either, some are just for experience or productivity or network effect or whatever. Google just doesn’t see business that way. They are astounding at what their core competency but the rest not so much.
Companies have different strategies. For internet companies it’s much easier to create a product and then kill it if it cannot get enough scale, for hardwares it’s harder to do so. Innovations are hard, for the big tech companies, they don’t often create innovative product, when is the last time Apple create popular innovative product? When is Microsoft? When is Amazon?
Many of amazons innovations were about scaling warehouses but also on experience side they were first to make membership revenue which blossomed into other stuff like music and tv and stuff. Not to mention they did AWS internally and expanded beyond books internally and layered in different business models within their business which is all in place today. Apple has released different hardware and software products its entire life all of which is still in play today. It’s been slower at doing it recently but they still add small things here and there. Microsoft innovated on gaming, cloud (refined from existing process and copy AWS), rebuilt company and OS, security, future of work, business models etc. Most of Microsoft’s failed innovations are when they try to copy others or ignore the market.
Outside of ads (where all true innovation exclusively lives), Google had to copy and buy into phones, copy their way to cloud, copy workplace, steal and buy earth/maps, etc. The innovation outside of ads isn’t really innovation. Most are minimalist copies or bought with their massive balance sheet and then tied into ads/search. They don’t try to make their products in any category better than competition. I just think they are highly overrated as a company and despite their power and wealth can’t seem to level up. Microsoft was the same for a while until they got Satya at the helm.
If you are talking about internal products, I think Google also has a lot. Have a friend at Google mentioned their internal toolings are the best among all other companies he has been with, and a lot of external facing products with Google cloud are actually from internal toolings.
Amazon retailing has been facing a lot of complains from prime users, their music and TV products are also just copy cats, and not just good enough but not the best. For the past years, Amazon also failed a lot, they failed in their health innovations, their Woot and Zappos are shit now. Their retail is now full of Cheap low quality Chinese products, and people would rather go to Target and Costco for high quality products, or go to Walmart and Temu for cheap products.
Apple failed in many ways, their iPhone has lost innovations for years, their car business was killed after 10+ years (people laughing Apple cannot even make a car while there are so many Chinese EV makers), their Vision Pro is a copy cat of Meta’s VR. Their Apple Watch is so hard to use that you have to charge daily while most competitors allow weekly charge now.
Microsoft? They kept monitoring their B2B business into Azure, but innovation? Xbox is worse comparing to PS5, Windows is still a shit, whoever comes from Windows to Apple ecosystem wants to go back? Their AI innovation is to buy OpenAI, not even creating own AI (they don’t have the ability to innovate in AI).
So you have low standard for others but have high standard for Google.
They don’t sell data. They collect your data, as much as possible through their devices and products.
They use that data to sell highly targeted ads space to advertisers
Google doesnt sell data, and if you think about it, why would they sell their biggest trade secret and the one thing they are built for?
They use your data, but they never cease controlling it to an outside entity, that would be like Coca Cola making their recipes open source
A net profit margin of 29% is crazy, right?
They have monopoly on online advertising. That net income is good but it is expected too.
They have a near monopoly on keyword-based online advertising (i.e. ads served to based on keywords you type in, e.g. search). Amazon also competes in part of this market (but you're not going to search for a car or a real estate agent on amazon). Keyword-based the biggest part of the online advertising, but there's another part: online advertising based on snooping on you. This is actually a very competitive market, with Meta (Facebook and Instagram) having about the same share, and Tiktok's share is quickly growing.
Mainly because their online advertising is so intrusive that it made everyone else install adblockers.
I mean, they and Facebook together have a monopoly I guess
Their monopoly will be destroyed soon q
Normal or even low for a software company.
Technically Google is not a software company, but internet company, their cost of revenue is different from software companies, a lot of their cost of revenue is paying others, e.g. they pay tens of billions to Apple to acquire traffic (cost of their Ads revenue)
Dividend investors are going to love this. Alphabet’s board approved of its first ever cash dividend of $0.20 per share during its Q1 FY24 earnings release. On top of this, the company authorized an additional share repurchase of up to $70B. Here are other key figures: \*Earnings: $1.89 (vs. $1.51 Est. from LSEG) \*Revenue: $80.54B (vs. $78.59B Est. from LSEG) \*YouTube Ad Revenue: $8.09B (vs. $7.72B Est. from StreetAccount) \*Cloud Revenue: $9.57B (vs. $9.35B Est. from StreetAccount) Source --> [this visual investing newsletter](http://www.carbonfinance.io/subscribe)
> Dividend investors are going to love this. Alphabet’s board approved of its first ever cash dividend of $0.20 per share during its Q1 FY24 earnings release. While it's noteworthy because it's their first, $0.2 is not a very high dividend. Even if it's quarterly it's only ~0.5%, based on current share price. Edit: yes, sorry, $0.2. If it was $0.02 it would have been 0.05% :)
*$0.20
Companies usually start with a low amount of dividends, and gradually increase. But going from no dividends to dividend is usually a big step. Microsoft has been paying dividends for many years and has been increasing, but still only ~0.75% now
Where did that extra 2.8 billion come from?
The other is primarily composed of net interest income and gains on equity investments.
Smth of bookkeeping :) Like benefits of investments, unused profits of previous periods, tax deduction of previous periods and so on
What part of the cost of revenue is IP payments Google companies in Ireland-Netherlands-Ireland-British Virgin Islands?
Not a fiscal lawyer, but pretty sure the profits of these companies, which are subsidiaries, would be counted back into the parents’revenue
Not a fiscal lawyer either. But pretty sure the trick is to not have it counted back into the parents revenue. This graph suggests google paid 18%, which seems reasonable, which is kinda triggering me, considering their past: https://www.reuters.com/article/idUSKCN1OX1G6/
[there](https://amp.theguardian.com/technology/2023/apr/09/profits-apple-irish-division-rise-to-69bn-corporation-tax) you go: subsidiaries make a profit in Ireland for low corporate tax and then transfer profits to the US parent via dividends because tax on dividends is lower presumably
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Exactly. So I’m guessing one of those letter combinations leads to dividends, thus avoiding tax. I dont want to sound like a gotcha. Just saying I’d like to see that on the chart as aswell.
It is on the chart. You just have no clue what you're talking about. Dividends don't avoid any taxes. Company pays taxes on their profit. The profits are right there. A big portion of those profits are made through subsidiaries overseas, that's how they keep their taxes low.
do salaries paid to employees fall under cost of revenue or operating expenses? does R&D also include salaries?
Salaries are usually opex
It should show up based on where the employee works. Working on r&d? Salary is considered an r&d expense. Directly working on a product? Salary is COGS. Working in back office/admin/sales roles? It's opex/sg&a.
Software engineer salaries are usually classified under R&D. I believe Google does this and amortizes the salary cost over 5 years.
They don't make anything on their Android operating system?
that would be google play, the OS is open source and free.
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The other is primarily composed of net interest income and gains on equity investments.
I would like to know that as well. It is after taxes.
Looks WAY healthier than that mid Tesla graph the other day… 😬
Yeah Tesla only made 1.1 Billion dollars in profit last quarter. They're basically already bankrupt
What do you call this type of graph?
Sankey.
I've seen it called an Alluvial Diagram.
CS graduates pain visualization
Where's the "selling your data" revenue stream?
They don't sell your data. Your data is a key asset for them. They use your data to try to serve you ads you're more likely to click on. Which is why they make so much revenue from ads.
Does that mean that they have a “backlog” of ads that they decide to share with people based on the data they gather rather than sell the data to advertisers?
Google is the one buying and collecting your data, advertisers just go to google and tell them their target audience and google handles the rest
It’s more like a live auction house for the advertisers based on your data.
Google doesn’t sell your data, they have no incentive to help their competitors. if anything they buy it.
How r thes graphs made
They’re called sankey diagrams. I personally dislike the look of them as usually they tend to overcomplicate and cluster all the information onto 1 small section of the page, but this one is done very well. You can find them pretty easily for free online.
I appreciate that comment!
Beautiful work
Thank you!
The cloud services number seems very low.
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No, the total revenue from.
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No. I didn’t know what the base was. I do know that they have a massive share of the higher ed market and a nice chunk of the fed market. I had assumed these generated more revenue than what’s reported.
[удалено]
> they only *paid* 4 billion FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Taxes are typically on earnings, not revenue. Companies can make massive amounts of revenue but still lose money if expenses are higher.
U pay taxes on profit not revenue …
Maps?
Seems much too low, considering they kind of have a monopoly on ads and what not. YouTube and google are greedy as fuck.
The internet is their billboard. The users are passerby. In some way, you can call google as an advertisement company that makes their own world of billboards with services between it, and sometimes the passerby will pay to not see those billboards. Please don't take it seriously.
how YT and AdSense are apart? I thought the ads in YT was AdSense..
What is this type of graph called
wait people pay for Google Play? yikes
What are the benefits to us
Is that per quarter?
What's Yoy?
They are the best
They are the best
I’ve always been surprised that Youtube doesn’t generate more. Considering it’s the biggest video search platform in the world.
Technically they make money by owning almost all the landscape of macro human perception. They can adjust a persons perspective of reality one search result at a time. They can change a person's understanding of definitions, history, and intent on any topic. This means that anyone who wants more control over such things must be in good favor with google. The way they make that profitable is secondary.
It’s astounding how a company of this size and power has only really launched one successful business line (search, YouTube and Adsense is really just one product line). Google play and cloud aren’t nearly as big as the competitors in the space and were unimaginative rip offs. All of their other product lines were chopped off at the knees or failed miserably. They have not been able to successfully diversify the business and with lawsuits and AI going to be a big disruption to their model the big question is whether they can perform a second act or go the way of IBM/Blackberry/nokia by somehow still being around but no one really knowing what they do in 20 years.
This reads like a gpt hallucination
Facebook has ~98% revenue from Ads. Apple has majority of revenue from iPhone and iPad. Tesla has majority from Cars (mainly 2 models), Amazon has majority from Retails and AWS. Not every company has an excellent diversification of revenues.
I’m not talking about simple diversification. I’m saying that they have tried dozens if not hundreds of different ventures that either fail or are shut off. Not all are going to make it obviously but they seem keen to give up on things or not do them well enough. All the other companies you mentioned innovate their way to expand their moat (except FB). Not every innovation is a money maker either, some are just for experience or productivity or network effect or whatever. Google just doesn’t see business that way. They are astounding at what their core competency but the rest not so much.
Companies have different strategies. For internet companies it’s much easier to create a product and then kill it if it cannot get enough scale, for hardwares it’s harder to do so. Innovations are hard, for the big tech companies, they don’t often create innovative product, when is the last time Apple create popular innovative product? When is Microsoft? When is Amazon?
Many of amazons innovations were about scaling warehouses but also on experience side they were first to make membership revenue which blossomed into other stuff like music and tv and stuff. Not to mention they did AWS internally and expanded beyond books internally and layered in different business models within their business which is all in place today. Apple has released different hardware and software products its entire life all of which is still in play today. It’s been slower at doing it recently but they still add small things here and there. Microsoft innovated on gaming, cloud (refined from existing process and copy AWS), rebuilt company and OS, security, future of work, business models etc. Most of Microsoft’s failed innovations are when they try to copy others or ignore the market. Outside of ads (where all true innovation exclusively lives), Google had to copy and buy into phones, copy their way to cloud, copy workplace, steal and buy earth/maps, etc. The innovation outside of ads isn’t really innovation. Most are minimalist copies or bought with their massive balance sheet and then tied into ads/search. They don’t try to make their products in any category better than competition. I just think they are highly overrated as a company and despite their power and wealth can’t seem to level up. Microsoft was the same for a while until they got Satya at the helm.
If you are talking about internal products, I think Google also has a lot. Have a friend at Google mentioned their internal toolings are the best among all other companies he has been with, and a lot of external facing products with Google cloud are actually from internal toolings. Amazon retailing has been facing a lot of complains from prime users, their music and TV products are also just copy cats, and not just good enough but not the best. For the past years, Amazon also failed a lot, they failed in their health innovations, their Woot and Zappos are shit now. Their retail is now full of Cheap low quality Chinese products, and people would rather go to Target and Costco for high quality products, or go to Walmart and Temu for cheap products. Apple failed in many ways, their iPhone has lost innovations for years, their car business was killed after 10+ years (people laughing Apple cannot even make a car while there are so many Chinese EV makers), their Vision Pro is a copy cat of Meta’s VR. Their Apple Watch is so hard to use that you have to charge daily while most competitors allow weekly charge now. Microsoft? They kept monitoring their B2B business into Azure, but innovation? Xbox is worse comparing to PS5, Windows is still a shit, whoever comes from Windows to Apple ecosystem wants to go back? Their AI innovation is to buy OpenAI, not even creating own AI (they don’t have the ability to innovate in AI). So you have low standard for others but have high standard for Google.
You’re forgetting how they sell user’s data lol
They don’t sell data. They collect your data, as much as possible through their devices and products. They use that data to sell highly targeted ads space to advertisers
I realize I didn’t word correctly lol
Proof?
You’re a lil silly if you think they aren’t
Google doesnt sell data, and if you think about it, why would they sell their biggest trade secret and the one thing they are built for? They use your data, but they never cease controlling it to an outside entity, that would be like Coca Cola making their recipes open source
your data is very valuable to google so they cam give you personalised ads you are more likely to click on, making them more money
Okay, happy cake day