Hacker News Reader

Comment by d3nj4l | Hacker News Reader

What is it with Google pulling off the bait and switch on so many products at once? Unlimited high quality photos for Pixel owners, free workspace for personal/family users and unlimited drive storage for education are all going paid over the span of ~a year. It's almost like Google's exploding from within.

View on HN

This is most probably the effects MBA's / late stage growth cycle. Google had all this potential profit lying around, and then someone came around and wanted to get a bonus out of it.

Google should watch out, if people no longer get any perceived utility from their services, they will find themselves destitute. A true ad company with a search engine and no innovation as Peter Thiel describes them.

I would rather pay Apple than Google.

...which will mean you'll still end up indirectly paying Google:

https://www.macrumors.com/2021/06/29/icloud-data-stored-on-g...

Opposite effect for me. I was getting workspaces for free to basically send and receive five emails a month or so. I pay Google for Google One storage, Stadia, and YT Music. Their reneging of workspaces is going to lead to me giving Google zero dollars per month. I'm sure I'm a rounding error to them, but perhaps others are in the same boat.

But you missed the key point. The goal was not to get more money for Google. The goal was to get a fat bonus. Doubling an orgs profit by destroying value requires some good, high-level holistic analysis to uncover. Meanwhile the VP in question will be doing everything in their power to obfuscate that, at least until after the next comp planning cycle.

At which point they will fix the mess they created and ask for an even bigger bonus.

I mean this is what companies build up revenue for, to be able to set prices when inflation happens. Googles services are undeniable. Now they are in position to start justifying their high multiples.

They probably started looking at their GCP bill

If that's the case, and not a deliberate aggressive strategy to acquire users ("bait and switch"), Colab users playing with GPT on free TPUs and GPUs should be by far the most worried.

The cost of storage at Google's scale is low. GPUs/TPUs are another thing entirely.

The community of https://fakeyou.com users has been using Colab to train TTS models. Changes late last year to available free instance types forced most of our users to have to pay for the pro plan.

Storage is cheap, but egress/ingress in and out of gcp is not. I suspect the real reason Google are doing this is a mixture of the two, to reduce network costs and because they've got enough users now.

My guess is where it's been going for a while, in line with the signals sent by hiring their new CFO - juicing shareholder value by cost-cutting now that the easy gains have been had and "natural growth" is slowing.

Their gains are extraordinarily easy still.

2020: $41b operating income. 2021: $78b operating income (+$37b in one year).

2018: $31b operating income. 2019: $36b operating income.

So they just added an entire 2018 or 2019 size profit to their outcome in the past year.

That didn't come from squeezing pennies on little storage products and the like. That's from one of the world's largest snowballs continuing to roll down hill, piling up tens of billions in trivially easy profit addition as they go. When it comes to expanding margins, for an organization the size of Google that is still expanding relatively quickly in sales, it's far more important to hold down cost expansion as the profit soars (don't add those entirely unnecessary 20,000 heads) than it is to cut rounding error costs. Microsoft has similarly been masterful about doing that lately (unlike during the Ballmer era).

Question is: is this extra income here to stay in 2022?

Most likely. Search continues to be strong and nothing has come close to bypass the moat. Facebook on the other hand, their moat has been broken through and they're knocking at the door of the castle :P

Their deal with Apple ensures their staying power. They own the other half of the Mobile ecosystem so even when lockdowns end and travel opens up there may be even more usage.

Where did that growth come from? Is there a breakdown somewhere?

Same cash cow as always. Money from companies who think we browse the web without AdBlockers. A little bit YouTube adds. They tried to spin it as growth on Google Cloud, but its minimal, compared to the cash cow.

https://abc.xyz/investor/static/pdf/2021Q4_alphabet_earnings...

It is incredibly doubtful they ever really intended to give away boundless amounts of storage forever. It is far more probable that they were trying to entice customers.

Which makes sense.

But when other companies do it, they tell you that it’s not forever. I suspect other companies want you to still be a customer in 5 years.

When you close a line that already has a queue, you stop new people from joining you don’t screw over those already there.

End storage for new users, don’t just go telling scientists you’re going to delete their stuff.

This isn't the first time, nor the last. They've been doing this for years as part of their kill old products and replace them with similar new one products culture. Google Music comes to mind.

https://en.m.wikipedia.org/wiki/Dumping_(pricing_policy)

Compare https://en.wikipedia.org/wiki/Predatory_pricing#Criticism

It's hard to tell if it's constantly shifting priorities and budgets causing projects to be retired, or a strategy to bring users into their walled garden and then upcharge once they are onboard.

I think that for a long time the average non SV consumer had the mentality of “I’m not paying a monthly fee for that crap” when it came to online stuff but all the streaming services have shifted that and it’s more normal now to pay a small monthly fee for little subscriptions of everything imaginable. So, my wild guess is that Google is seeing that culture change and realizes it’s now a good time to join everyone else and finally start milking it directly. Probably not accurate but I could see that being part of the conversation.

I'm wondering if privacy regulation (GDPR, CCPA, VCDPA) slowly closes the targeted ads market. Hence, Google starts charging for services that previously were paid for from someone else's marketing budget.

Yeah, it's so unusual of them: https://gcemetery.co/

A lot of people seem to have missed the point I was trying to make. I'm not saying that it's unusual for Google to engage in anti-competitive dumping or kill their products; I'm wondering why so many of these actions were timed so close to each other. As it stands, the narrative around Google dumping is more blatantly clear than if they waited longer to phase out some other products (like storage for Universities) or simply didn't, which makes me think that internal or external pressure on Google to monetise its properties more aggressively is ramping up.

I think Google is losing money on their cloud division while trying to gain market share, so they are cutting costs in every other place to make the bottom line earnings look better.

... I think I've been screwed over enough times by Google now that I would never, ever, ever, ever, ever rely on them for anything where I expect business continuity. I've done too much business with Google to ever do business with Google.

I can't imagine their cloud division ever winning with Amazon and Azure exactly because there are happy GSuite/Youtube/etc. customers like me around, making sure no one ever trusts them for anything again.

100% agree... the people making cloud purchasing decisions are also usually the people who are early adopters/enthusiasts for all of these google products.

Reply on news.ycombinator.com