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Cloud grew revenue 63%. Cloud income up from $2.2b Q1’25 to $6.6b Q1’26.
https://www.reddit.com/r/stocks/comments/1sza7xi/alphabet_be...
My wife is an investor, and one of her portfolio areas is pharmaceuticals. A couple of portfolio companies have reported that it's becoming basically impossible to make any money off of a new product, because you need to advertise it to reach the customer, and Google will skim all the excess producer surplus off as you compete with other startups serving the same market.
It's basically the perfect business model. They own the path to the consumer, which means they own the economy.
I'd also recently hired someone out of Google Search, and they said that the only queries that "legacy" (non-AI-mode) search cares about are commercial-seeking queries, and the only metric they optimize for is ad conversions on those. It literally is thousands of people whose only job is to get you to click more ads.
"sofa beds": Popular Products section (5x2 grid of chips) Reddit link: "Are sofa beds actually practical" Wayfair Reddit link: recommendations Wirecutter "Discussions and forums" section (Reddit and random crap) Ikea "In stores nearby" (5x1 of chips) "Deals on sleeper sofas" (5x2 of chips) "Things to know" section "Brands" (one row of chips) Furniture store Furniture store Furniture store "More products" (5x2 chips) Furniture store "People also search for"
None of these were marked as sponsored. I assume, but don't know, that the Popular Products chips are sponsored somehow.
"hard drive": Popular Products (5x2) Wikipedia Best Buy People Also Ask section Reddit: request for what brand is good Brand Picks for You (5x1) Things to Know section Amazon link PCMag reviews Reddit: "What exactly is HDD?" Brands section NYT review article What People Are Saying section (a weird mix of stuff) Wikipedia More Products section Store link People Also Search For section
None marked as sponsored.
Not that crazy for a vague, commercially-oriented search. Certainly not 100% ads.
Maybe in the future something comparable will be invented and protected. No harm in dreaming a little I guess.
You are mangling a well defined term of producer surplus that is widely accepted in economics with your own.
(googler, opinions are my own. I know nothing about this outside of external info)
You just say "I want to find some headphones" and it makes you some recommendations. Or it helps you nail down what you're looking for first and then gives you options at various price points. I've found this useful when shopping for cars, computers, tourist activities, and much more.
I open Google Search. If I want an LLM, I click “AI Mode.”
I only bother to open Gemini or ChatGPT or Claude if it’s a “big research thing” which is almost never.
Absent additional information, no one else can identify the false assumption underlies a strong belief that this should not be case. But something is flying in the face of the facts, and has been for a while. So, yeah, might want to take a look at those priors.
Another way to think about this is that LLM based search actually grows the entire pie for search and so multiple players can all be growing at the same time.
The real losers are publishers, blogs, forums etc. Instead of traffic going to them that traffic is being turned into more search queries and more LLM responses.
AI overview (organic for now?)
3 organic results (below the fold)
2 paid search results
Image results
1 organic result
If I don't run paid ads I don't get leads I rank organically for a lot of the keyphrases I'm bidding on (top 3 results)...organic 0-2 calls a week, paid ads 4-6 calls a week (niche business).
Personally I use AI chatbots to help me make every purchase decision I have to think about.
I just tried asking ChatGPT where to buy a backpack I'm looking for and it just... did a search. It would have been considerably faster to just do the search myself instead of wade through the slop about how "This backpack is hard to find in stock, you'll need to buy it directly from the brand yada yada yada".
Doing something right.
Maybe mass layoffs like Oracle/Meta/Amazon are doing isn't actually a good way to grow a company after all!
Infrastructure and scalability has been and is key, as well as technical expertise still absolutely super top notch.
Let’s put it this way: Google is the only company that knows how to find, store and utilize information beyond a specific narrowing. And I mean it really in the sense of curating, compression, long time storage, load balancing as well as compliance and world wide redundancy with a focus on speed and efficiency.
Under the hood of AI is pure engineering genius. Google might be trashed as the Search Engine giant that only displays ads now, but reconsider.
Why does all AI provider except for Google have massive problems with load time, reach, etc? Apple chose Google mainly because of the infrastructure. They eat everyone for lunch here. And they earned it.
Engineering at Google etc. are still the finest you can read about software engineering at the highest level. It is highly impressive how Google managed to not fall behind OpenAI. Who else was able to join the race? Microsoft? No. Apple? Oh well… Meta etc. won’t get there ever.
I think that Gemini is 3rd behind OpenAI and Claude but mainly because Google being Google, they kind of have no versioning for their AI and therefore the results are pretty much random in quality, less predictable than the others.
But the creativity and tooling like Nano Banana - fantastic.
There you have it. People don’t get that it is the infrastructure the moment they complain about Claude outtakes here.
The reason you don't hear people complaining (esp on HN) is because noone is using Gemini with coding agents. Claude Code, Codex (and IMO OpenCode et al with open weights models) are miles ahead of Gemini CLI/Jules/Antigravity/whatever other coding products Google have.
While the model was "ok" everything else was trash.
Constant 429s or 502s for "reasons".
10 different ways to try and pay for the stupid thing and none of them clear.
My favourite was as a paying customer I could not get it to use the latest model. Sometimes it would but most times it would dump me to 2.5.
All of my experience is exactly the opposite of the gp comment is saying.
The gemini-cli repo is gong show too https://github.com/google-gemini/gemini-cli
Google has cost-cut their old hiring and performance management processes, and eliminated many perks and benefits that were peculiar to Google. As the unique characteristics of Google as an institution are pared away, it makes sense that they would also adopt the standard approach to layoffs and that is what we have seen since 2023.
And constant layoffs very much have the result on morale you'd expect today.
[1] https://www.nintendolife.com/news/2014/01/iwata_and_miyamoto...
I don't think any of them are learning the lesson you think they are
In particular, the flow that used to support content creators through Google Search has been damaged. Previously, content would appear in Google Search, visitors would come in, and creators could earn revenue through ads, courses, or other products. But now Google can answer directly through AI Overviews, making it harder for content creators to survive independently.
That said, I think Search is still making a lot of money because Google is effectively focusing less on informational search and more on commercial search. I mean searches with purchasing intent, such as “best laptop recommendation.” We cannot know the full search-volume statistics from the outside, but in my subjective experience, the quality of actual search results is often much worse than expected.
In that sense, Google’s revenue now feels less like it comes from serving small developers or end users, and more like it comes from selling infrastructure to large companies and major developers. The huge increase in Cloud revenue seems especially important. Google appears to be strong in enterprise AI solutions, and as an AI development platform it seems extremely powerful. My impression is that the center of gravity in AI development platforms is shifting somewhat from Microsoft toward Google.
However, revenue growth does not necessarily mean product quality. Since AI is increasingly absorbing informational search, users may end up using Google mainly for commercial-intent searches. From another angle, that gives Google an incentive to tune its algorithms and layout around purchase-intent queries.
Separately from that, there is a sharp contrast between Google as a development platform for companies and Google as a service experienced by end users. From the end-user perspective, the experience feels worse every day. Search feels poorly maintained. Ads also feel poorly controlled; for example, adult ads may appear to teenagers. Outside the Gemini API, the places where users can actually use Gemini feel fragmented, and the web version of Gemini is difficult to use seriously because of strong token limits.
Google seems to be trying very hard to serve developers who build on top of Google. But separately from that, ordinary users of Google services increasingly feel neglected.
This isnt a Google issue. Users are asking for it - ChatGPT and Perplexity did it first and it'd be crazy for Google not to do that.
You could argue Google being late to LLMs were a good thing, and once they were forced to play the game, they played
Suppose an electricity utility builds the power grid, and many businesses build their operations around that grid. Then later, the utility uses its privileged position in the grid to directly replace the businesses that depended on it. Would that be morally acceptable? It may be correct from a business perspective, but that does not automatically make it good for the whole ecosystem.
In a capitalist society, companies are pressured to create new cash cows, enter adjacent markets, and even perform self-disruptive innovation in the interest of shareholders. This may be one such case. But whether that benefits the overall ecosystem is a separate question.
Users want free content. Users want services without ads. Users want fast summaries. Users want answers without reading the original source.
Those desires are natural. But if producers cannot remain sustainable under those desires, then the long-term quality of information may collapse.
Google can preserve revenue through AI Overviews, while creators may lose revenue. The problem is that AI Overviews occupy a large container near the top of the results page and hide or push down the sources users would otherwise visit. In other words, the UX design emphasizes Google’s AI answer while making external sites less visible.
It is true that content creators now have to compete with Google’s AI Overview. But this competition is asymmetric.
From the company’s perspective, and from the shareholder perspective, Google’s decision may be correct. They are far smarter than I am. But it is still unclear whether Google will remain unharmed if the ecosystem that feeds it is gradually destroyed.
This analogy is incorrect. If someone wants to use bing.com, they just have to type b-i-n-g.com. You chose an example with high barrier to entry. So if the utility behaves poorly, the consumer cant switch.
Google did none of that.
You dont like google? go to ddg, bing, .. You dont like google maps? use apple maps .. You dont like youtube? .. go to tiktok, fb reels, and if you're a creator, upload it elsewhere.
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You can say that Apple does a fantastic job of removing altnernatives. You dont like Apple Airpods? Good luck buying Sony to work the same way as Airpods with your iPhone.
https://www.google.com/search?q=did+google+seach+increase&oq...
It’s possible AI will do a better job of capturing ad dollars by better serving intentional searchers.
Some of it is for stock pumping, some for regulatory capture, some is flooding the zone with shit.
This kind of "marketing" is part of the reason why tech is held in low esteem now. It destroys the sense of optimism and replaces it with fake tech bro worship.
But they're presumably investing more in it, since Other Bets income fell from $-1,226M to $-2,100M, meaning expenditure went up $800M YoY. (Obviously not all of this was Waymo though.)
My decade old tech blog with 500+ posts now gets 10x less traffic than it did a few years ago and I'm actually on the fence on pulling the plug on my 10 year old business because traffic is so low it now costs me more to host video courses that I sell than I make per month from them. In turn this comes with other implications, such as maybe stopping my YouTube channel and no longer contributing to open source because paying bills has priority over hobbies. I enjoy spending time on these things and morally was always ok with giving away almost everything I do and learned for free, but income requirements are very quick to slap you into reality.
The impending deaths of most things are greatly exaggerated.
- https://www.rip-grep.com/microsoft
https://github.com/burntsushi/ripgrep
Wonder if it was an intentional pun.
May be short term and turn around at some point, but the current trends definitely feel lower vs. higher.
For example, Chinese electric vehicles are selling like hotcakes in Europe but you'd be hard-pressed to find any in the US.
(Edit I had confused it earlier with 1.1.1.1 which is from cloudflare)
[1] https://en.wikipedia.org/wiki/Aleph_number