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0 pointstimewizard0y ago0 comments

> It's common for startups to be acquired when they lack a clear path to profitability

I just can't work out the economic logic of that. It seems to be then that there are secondary considerations, such as market domination, that provide the value in these transactions. I'm not sure how this argues against my point.

> a large company has the resources and clout to turn a borderline business into a good one

I can't determine why a search and advertising company thought it had the requisite skills to run an ISP or to make it a competitive and profitable business.

> even if it's a large company as sclerotic as Google.

The evidence here is that they failed anyways.

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SR2Z0y ago

> I just can't work out the economic logic of that.

Startups are often unprofitable despite having a good product. Large companies have an easy time of making good products profitable, but a difficult time in developing good products from scratch.

> It seems to be then that there are secondary considerations, such as market domination, that provide the value in these transactions.

Undoubtedly! But a profitable startup that is dominating a market would not be acquired for a small amount of money (or at all).

> I can't determine why a search and advertising company thought it had the requisite skills to run an ISP or to make it a competitive and profitable business.

Google makes the majority of its money on ads. That being said, it's absolutely brainless to ignore YouTube, Waymo, Pixel, Cloud, etc., etc. when talking about Google's business. All of these would be unicorns if they were independent companies.

timewizardOP0y ago

> Startups are often unprofitable despite having a good product.

There are lots of reasons a company can be unprofitable. Just having a "good product" does not mean there is a "market demand" for the product.

> Large companies have an easy time of making good products profitable, but a difficult time in developing good products from scratch.

You accidentally have made my point for me again. Why should this at all be the case? What natural economic factors lead to this outcome?

> that is dominating a market would not be acquired for a small amount of money

You could also just compete with them. Market domination is one of the factors in determining if an illegal monopoly exists.

> Google makes the majority of its money on ads.

So owning platforms that deliver ads is an important part of market lock up.

> brainless to ignore YouTube, Waymo, Pixel, Cloud,

All things that deliver ads or gather user data for the purposes of advertising, yes?

> All of these would be unicorns if they were independent companies.

With the exception of their cloud.. they all used to be independent companies.

That there are attributable reasons for the outcome is not interesting, why this illegal outcome is not prosecuted is.

SR2Z0y ago

> You accidentally have made my point for me again. Why should this at all be the case? What natural economic factors lead to this outcome?

Economies of scale. That's it. The overhead per employee is much, much smaller in a big company, it's much easier to acquire more labor/investment, and there's much more stability for planning.

This is a GOOD THING. This is how we enjoy cheap goods and services. It's all well and good to crow about small business, but actually dealing with small businesses frankly sucks as a consumer.

> You could also just compete with them. Market domination is one of the factors in determining if an illegal monopoly exists.

Google Search dominates the market mostly because it's better than all the other competitors. iPhones dominate the market (at least in the US) because people prefer them. Not all monopolies are the result of illegal behavior, and not all monopolies are equal.

Market dominance is necessary but not sufficient to call a monopoly illegal.

> So owning platforms that deliver ads is an important part of market lock up.

If you criteria is "all platforms which could deliver ads" then Google not only doesn't have the market locked up, they're incredibly far from it.

> All things that deliver ads or gather user data for the purposes of advertising, yes?

I don't know about you, but I find that I go to YouTube to watch videos, call Waymo to physically go from point A to point B, use my phone to make calls and browse, and use Cloud for my compute needs.

Just because a product COULD be used to deliver ads does not mean that's what it's for. It's nuts to try and see the world that way and I cannot even begin to understand why you would want to.

> With the exception of their cloud.. they all used to be independent companies.

Dude, no. Waymo, Pixel, Cloud, Photos, and Search are homegrown. YouTube was an acquisition - but comparing how much work has been done post-acquisition vs pre-acquisition it might as well also have been 100% in-house.

Your facts are seriously wrong here. Google is not acquiring finished businesses and extracting all the profit they can from them, PE-style; they're actually creating value.

> That there are attributable reasons for the outcome is not interesting, why this illegal outcome is not prosecuted is.

There are definitely things Google does which are illegal, like that Apple default search deal!

By and large, though, the company is wildly profitable because it offers services which its users find useful.

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