TLDR: Google was grossly negligent with its spending due to its position as monopoly. It continued to look for its next “search” cash cow, instead of nurturing its core revenue driver, and ignoring key threats that it assumed it would not need to address given they found their next cash cow first. They didn’t. Disclaimer: My work is purely on the business side of the house, so if I show lack of understanding or come off as an SWE hater who doesn’t understand, I apologize and feel free to roast me.*** Googlers, I’ll share a more granular insight of this post in the internal blind with more reference points you can look at yourself internally. Some of the data that makes me confident in saying this is why Google is doomed, I can’t share, but Googlers can look it up in internally. I used chat GPT to summarize my notes otherwise I’ll be doxed immediately with how I’d explain this. Between 2019 and 2023, Google saw a consistent rise in ad revenue and a steady increase in headcount. Despite this growth, most revenue is concentrated in one organization (Search Ads), while expenditure and headcount are dispersed into cost centers, a concerning business model. The company’s strategy involves launching and acquiring products, often witnessing their failure, yet occasionally striking gold with services like Gmail, Maps, and YouTube. These successes, however, raise questions about monetization strategies and product evolution, given their minimal functional updates over the years.Google's approach appears to focus on maximizing revenue through engineering and providing a unified user experience, leveraging its search and ad capabilities. But quite literally not doing shit with these products after they are built. However, this has led to a cycle of exploring new ventures without clear direction, evident in its handling of 20% projects and acquisitions like Google+ and Google Glasses, reminiscent of aimless experimentation. Pre-COVID, Google displayed a lack of clear vision or direction, raising concerns about its long-term strategy and operational focus. During this period, Google's main competition (without realizing it) wasn't from big names like Meta or Bing, but from digital advertising agencies specializing in paid search/PPC. These agencies, growing since 2012 and firstly entering the market for 2005, became essential for businesses wanting to run Google Ads campaigns due to Google's complex ad product and the company's reluctance to hire sales reps. This reliance on agencies meant Google missed out on direct revenue from advertisers. Attached graphs highlight Google's revenue growth, employee count, and the rise of ad agencies (A), along with the revenue Google forfeited to these agencies(B). Currently, Google's push towards automating Ads has threatened these agencies' roles, leading them to resist adopting new Ads features to maintain control over advertisers. This focus on engineering-driven revenue models without sufficient sales support has led to broken trust with advertisers and agencies, with agencies often not fully utilizing advertiser budgets to maintain their relevance and gatekeeping. Google's recent emphasis on growing its sales teams to improve advertiser relationships shows recognition of the problem, but cultural mismatches and leadership inexperienced in aggressive sales strategies are significant hurdles. If agencies shift their focus away from Google, it could significantly impact the company. Despite the growth in sales teams, Google's culture and hiring practices may not align with the aggressive approach needed to rectify the situation, underscoring a pressing challenge for the company's future in the advertising space. RIP Google
Not sure if I follow. Ad agencies RIP with Gen AI so Google RIP?
Ad agencies recognized Google had a good product that was made by engineers, and no one from Google to help advertisers understand or use it. So they essentially became experts on the product, and started selling Google ads management to businesses. Agencies would take a cut of the ad spend. Agencies created a monopoly around the relationship of a lot of advertisers, and are now dictating how they spend and use Google ads.
That assumes the ad clients are dumb and won't try something new on their own. Possible due to how G operates. Thanks for clarifying.
I have no idea what I just read. Someone tldr plz.
It's just another "Google is done because of X" post
"Google is finished because it tried to invest in other revenue streams" Yaaawwwwwnnnn
Dude, your whole field is like BS
Don’t be mean. You guys had a gold mine of talent and money, and still let OpenAI smoke you.
The burn is unbelievable. ❤️🔥
So eventually advertisers will leave the agencies and work directly with Google.
That was the original attempt when Ads became heavily automated. But agencies caught on and since there weren’t many Google reps to go out and sell it, agencies started gatekeeping and creating a poor perception of googles intentions to advertisers to increase their relevance.
Given enough pressure, businesses will figure it out. I don't think Google is at risk here. The need remains the same, and businesses will find the path of least resistance to get the results they are after. It just may take some time for the industry to make the shift.
Hard to make money when 99% of their engineers are grossly overpaid and come here telling everyone about it. When it gets to be like that you know it’s bad.
Here is my tldr: Google had a lot of money to spend. So they took all the talent in the market and used it to build random shit in hopes of another cash cow like search. The products that were built ended up being built and not changed, nor monetized, like maps and gmail. Google neglected its relationship with advertisers, allowing ad agencies to basically be googles sales team, and form relationships with advertisers over Google. Now that times are tough these advertisers are more important than ever, and Google doesn’t have the bandwidth or experience in sales ability to correct this, leaving a lot of revenue dollars in the hands of agencies who consult these advertisers. Boom.
Maps and Gmail are steadily being more monetized, which is simultaneously degrading the UX. Maybe it will hit equilibrium somewhere, or maybe they become so bad they die off.
Aside from monetization. The UX on both is still abysmal when you consider the little things that are still not fixed. Gmail search is horrendous for finding emails. Maps is irritating for public transit and too confusing. I’m looking at my maps app right now and it has the bart train labeled as the yellow line, and not “Antioch” or “Richmond” the way people read the actual trains they get on.
We need less business grads, leas McKinsey analysts, less coasters, less cockroaches
Pre Covid, pre coaster Google. What was built besides search though. lol.
Show your puts or get out
Lolzzz