It’s time for Alphabet to spin off YouTube?
economist.com
economist.com
Leaving aside HN loving the idea of Big Tech being weakened by becoming Relatively Small Tech, I don’t see how this is in Alphabet’s or YouTube’s interest.
The article assumes that such a divorce would be simple and it would allow YouTube to focus on taking on TikTok. It sounds like the exact opposite to me. YouTube clearly shares a lot of infrastructure with the rest of Google, especially datacenters and ads. Instead of focusing on high leverage activity like improving product, they would spend their time figuring out how to split datacenters, ads products, internal tooling etc. Almost all of their software stack is maintained internally. They would need to fork it and staff all of these teams. All of this is time wasted, work duplication and cost increases.
Most of the rest is questionable claims. Like the claim that a post-divorce YouTube would be able to focus on subscription revenue. You mean like YouTube Premium, a subscription they’ve had for years? They’re not replacing ads with subscription, they need both, so they need to recreate whatever ads infra they were sharing.
The only argument that made any sense was that it would buy goodwill with regulators. This is because regulators also like the idea of Relatively Small Tech.
I feel like this article was started with that Wall St mentality of “I wish I could invest in YouTube without investing in the rest of it” and it somehow tries to justify the rest the divorce.
Really, if I had to think about what YouTube wants to do I’d say they have to beat TikTok at the recommendation game. To do that they need as much data as possible (even if that sounds distasteful to HN), meaning the entire profile that Google has built on each person. In what world does YouTube build better recommendations after voluntarily giving up access to this data?
I’m keen to read an argument that argues this is in the best interests of Alphabet and YouTube. Ideally something that goes into specifics rather than vague notions of “focus”.
Youtube has actual good content from creators whose opinions I trust. Google would be moronic to give that up, they've spent long enough building it.
Eh... it's already started on YouTube. There's a whole new genre of movie content that has chatgpt summarize the movie while they play 15 minutes of clips. It's higher effort garbagisation because someone needs to at least do some low effort video editing.
We recently launched a 24/7 news channel:
Email has problems, yet the good and productive uses vastly outweigh the bad actors. The vast majority of systems humans use have benefit, otherwise they would be unwound by governments (eg. crypto).
People want to be creative more than they want to be destructive. The destroyers will be moderated, just as they are in every system.
I want a world where every kid can make their own Star Wars or Princess Mononoke and create more than Scorsese's entire career within a single year.
Rad goal. Good luck as someone who consumes more YouTube than mainstream content. I'm all for unlocking the potential of creators.
If things stay the same as ever, this life will have been boring. I'm not cut out for another twenty years of smartphone incrementalism.
Fuck the status quo. I don't live for "same". Everything in the world as it exists isn't enough.
The future could be the most exciting thing if we dream and build it.
I feel sorry for you.
You know what really sucks? How labor intensive and capital intensive filmmaking is. How hard it is to make it into the field. How almost impossible it is to lead a production.
Think about all of the great ideas that wither on the vine because the Hollywood studio system only has so much capital and can only back so many projects.
Think about how many months and years go into a single film, and how few of them succeed.
Think about the opportunity cost of learning a creative skill - locking you out of all the other skills you could use to build your vision.
When the cost structures drop, people will be more creative and more cooperative. The long tail will be all of us.
Very few; great ideas mostly happen outside of the Hollywood studio system, which is largely about expensive packaging of low-risk ideas, not great ones.
Allow me to point to the thousands of creatives trying to cut it that cannot break in. I've met perhaps over a hundred of them personally. I, myself, am one of these people.
> which is largely about expensive packaging of low-risk ideas, not great ones.
The market serves different segments and there's a lot of intelligence built around vehicles of all types, shapes, and sizes. I don't think Hollywood is stupid at all. I think it's simply a small local optima when we're about to jump the peak to a new Mt. Everest.
I'm not saying great ideas don't fail to get realized.
I’m saying that the Hollywood systen is actively hostile to great ideas, so that the reason greay ideas fail to get realized is not the limited resources within the Hollywood system, which is more inclined to crush great ideas than to realize them with whatever resources it has.
(Limited money outside the Hollywood system might be a problem, though.)
> I don't think Hollywood is stupid at all.
I didn't say anything about its intelligence, merely its function, it is far from stupid.
In my opinion it's the McDonald's of movies. Not particularly good, always the same few usual suspects on the menu, nothing adventurous but mindless consumerism. And a few people get rich off it. It's business, not art. But people use it in masses because it's easy to get and they know what they're getting. Some excellent stuff comes out of there too but it almost feels like an accident sometimes.
If you're really into your art form, I wouldn't even try to get in there. Sure, alternative cinema won't make you rich. But if that's your goal you're in the wrong business anyway. Making it in Hollywood is more about who you know and who you f*k than about your skills.
Often, "making it" in the Hollywood studio system is about being a part of an exclusive club. Very few people are allowed to proliferate their own ideas within the walled garden.
Why? I'm not sure what are you talking about but I doubt most factory workers or butter churners were particularly excited about their jobs...
> How almost impossible it is to lead a production.
The problem I see is that if everyone is capable of making high-end movies the market will become oversaturated. There is only a limited amount of time consumers can spend watching tv so if making high quality (by current standards) content becomes trivial that will simply raise the overall "quality" bar. As long as there is money to be made it will make sense to invest into improving your content by investing into better "AI", GPUs or whatever. So we'll just end up more or less where we started.
I mean that sort of already happened didn't it? We can do things (CGI & production wise) that were impossible or even unimaginable as recently as the 80s or 90s. And things which were extremely expensive and required thousands of hours to accomplish back then are trivial now. So what? Did it become much easier to break in into the industry than before? Or did the bar just got higher?
> When the cost structures drop, people will be more creative and more cooperative
Maybe. But considering that most people and not very creative and most of their "ideas" are garbage we're just a likely to drown in a sea of technically/visually high quality content that's artistically and creatively worthless. By "garbage" I mean content that very few people will choose to willingly consume if they had alternative options.
You're imagining inventing a car and feeling the wind in your hair on the open road, others are imagining being stuck in traffic and cities becoming more and more dominated by parking lots. You're criticizing them for a lack of vision, but that's not correct; they're peering into the same future, and seeing something different.
That doesn't make them "antiprogress," they're critics with concerns that would be worth engaging with instead of dismissing. If you care about this project and you want to make the best version of it - ask them why they think that way instead of responding to the version of their concerns which is in your head, and then give some thought to how you could address it.
(I'm ambivalent leaning towards skeptical, so not much much of a dog in the race, trying to bridge a miscommunication.)
I don't think that's a bad thing. It's a good perspective to keep in mind when disagreeing with someone though.
I like Star Trek the Next Generation... a lot! It was on when I was a teenager, and I like it because it's nostalgic and actually a pretty wholesome show compared to a lot of the shit that gets produced today. I'd love to see more than the existing 7 seasons, but they'll never make any more of them. It would be incredible if I could just ask my PC "Generate a new Star Trek TNG episode with the original actors and a believable, good story". I could watch a new one every week forever if I wanted! At the speed technology is moving, I expect we might see that in my lifetime.
We all saw the cheesy "infinite Seinfeld generator" a few weeks ago. That's v0.1. The technology will inevitably get better--in fact the only thing that could torpedo a realistic "infinite nostalgic TV show generator" are the copyright goons trying to hold it back.
It would be incredible, but incredibly awful.
Also, a series is going to have a (set of) formula, but what makes an episode good is if it deviates from that formula.
I want to put mocap and editing into this. Humans can tweak high level knobs, then dive into specifics.
I think they're slowly going to drown out the good producers.
edit: TIL it's a real person and she (can) sound exactly like the TTS version... I'm cracking up listening to her. Thank goodness it's something she can turn on and off.
https://www.tiktok.com/@voiceofkat/video/7157105733128015109
When you say "SEO crap", you mean text search. But the world is much bigger than text search today, lots of people use YT as a search engine. Because of that, the "Front Page" of Youtube looks like dumpster fire of the worst clickbait you can imagine.
Youtube genuinely does a better job on that and I think it'll be quite a bit harder for AI generated video to game it, if nothing else the sub count on the channel and the comment section (or its status as disabled) will be indicators.
Now, this isn’t a problem for the majority of my YouTube consumption, but I’m still seeing it creep in.
And if you are investing in these areas and this is your only business isn't this "focus" all of a sudden important? (so you can actually compete in these businesses and potentially grow the business more?).
I for one like the idea --as well as I think Google needs to be broken up ten years ago. YouTube has scale, a good brand and would probably gain by being less Googley --i.e. iterative and consumer-focused. Not just YouTube, but the internet would be better off with a more focused YouTube (that also has less of your personal data as a bonus).
If Alphabet needs money for YouTube investment they can issue more Alphabet stock, and investors can take that deal or not. But I doubt that Alphabet's challenges involve cash flow.
It might well be better for the world if Alphabet weren't a conglomerate. But it seems unlikely that it's better for them.
/s
The preceding parts of the comment literally explain why not.
I think the worst would be having to split the customer base. Their sales costs would increase a lot and they would loose pricing power. On the social networking front turn a leader into a me-too. This article confuses what these businesses seem on the surface (search+video) and what they really are (selling ads, keeping track of customer identities to do the same).
That's assuming YouTube needs any investment.
You mean like they haven't for the past 5 years?
I have no opinion on splitting them up besides "why?", but "Youtube wouldn't innovate on their product any more" is a weird position: Youtube hasn't innovated since it was created, they've only copied from other products (streaming, shorts, music, superchats, channel members), and did so in a mediocre way that's just disappointing.
Fans decide it is time to trade Player X. Next move is to find someone to replace them ... they then describe someone just like Player X.
A YouTube and Google split would setup a situation where they both seem to be a pretty good fit for each other.
It might be interesting to apply similar thinking to technology.
Both Disney and Nintendo operate on brands and content IP. Both keep releasing the same content but updated to dedicated fanbases
>YouTube clearly shares a lot of infrastructure with the rest of Google, especially datacenters and ads.
I don't see this as a particularly thorny problem. Normally in a divestiture. Newcorp would just sign a 5 year infrastructure deal with Alphabet, and a 5 year deal for it's ad space. That is plenty of time to resolve any lingering issues.
I wouldn't be surprised to see Alphabet divest some business, however I think it is unlikely to be for tech reasons. It is more likely to be financial engineering, as growth stalls and share prices need protecting.
I’m some case you might have a service used by a Google product, operated as a platform by a YouTube team, that uses Google Cloud services, and runs on Google infrastructure. And the SREs may be “paid for” with YouTube budgets. Who pays who? And how much?
It’s not as clean as, say, treating these things all like cloud services provided by an infrastructure provider.
"Strasse".lower() != "Straße".lower()
"Strasse".casefold() == "Straße".casefold()
Also in case you weren't aware, Tiktok now also supports longer videos - https://www.theverge.com/2022/2/28/22954525/tiktok-maximum-v...
Shumpeter and Babbage are the last names of famous people in fields related to the columns topics.
After a financial disagreement in 1995, Stephens was dismissed from InfoWorld and was promptly sued by IDG to prevent him from continuing to use the Cringely trademark. A settlement was reached out of court that allowed him to use the name, so long as he did not contribute to competing technology magazines
…Robert Scoble was accused of sexual assault and later converted to Islam?
https://en.wikipedia.org/wiki/Robert_Scoble
I'm learning so much from Wikipedia today.
They could license each other their infra and libraries.
That's the least of the problems. If there is the will to spinoff YouTube they can agree to rent that infrastructure and the people running it for, let's say, five years and see what happens next. No software will move, nobody will change desk or laptop. Paychecks will come from the same company. Then they'll gradually figure out if they want their own infrastructure in case the goals of the two companies get in the way of each other and YouTube has little leverage against Google.
What might instead generate more value is to spin out Google Workspaces (aka docs, slides, sheets, drive, etc.) It feels as if their business products are losing out to Microsoft, which IMO offer a greatly inferior collaboration experience for distributed teams.
To pick one concrete example Google Drive is poorly suited for storing business documents due to its hostility to hierarchy and poor tools for viewing and search. By contrast Sheets is amazing. We run our business on it. These product deserve a separate, innovative focus that does not treat document management as a search problem.
Ultimately, the article argues for spinoff because of 1) focus, 2) more subscription experimentation, and 3) regulators.
But there's zero evidence YouTube is a distraction, it's already done lots of experimenation with subscriptions, and YouTube seems like the last of regulators' concerns with Alphabet.
I do think it's true there isn't a whole lot of strategic synergy between YouTube and Google or the rest of Alphabet. It's not like YouTube and Maps reinforce each other the way Docs and Slides do.
But the biggest argument for keeping them together is that there are large economies of scale, mainly regarding datacenters and edge nodes and all of the like, and that for this reason alone YouTube is an essentially perfect part of Alphabet's portfolio.
If a YT competitor built a search feature that they thought was so good they spun up a search engine product, does that make them anticompetitive?
Every competitor has to implement their own solutions to these problems. Or, don’t? Search isn’t a barrier to entry. You could launch a video service without a search feature. If you can leverage something from your existing assets, that’s not anticompetitive. It’s like a lawn mowing service starting a Christmas light hanging service because they already possess the truck and most of the tools and labor resources. It’s the definition of being competitive. They may be able to offer lower prices to consumers because they get to use their assets during middle of winter when grass isn’t growing.
Or, and this is key to the bundled conglomerate argument, offer a service that wouldn’t otherwise be feasible (because the cost would be higher than what customers would pay.) In this case, bundling of the service is a net positive to consumers.
Evidence suggests that spinoffs produce quite significant gains in shareholder value, here is one such study[1]. This isn't really that surprising as large conglomerates are slow, have managerial issues and are difficult to price and generally hold their best performers down.
[1]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1875857
It is not mispricing, but it is a discount. Big companies, even very healthy ones, often split to satisfy their investors based on this phenomenon.
It hasn't really played much in tech though which might be why you haven't heard of it, but is very very well known in industrial companies.
E.g., yes they'll "pay" for compute, but they'll do so at cost. And they're also allowed to deploy a monitoring widgets to other orgs' data centers to find when they're at low utilization, and then argue "at cost" is actually near 0, because the compute resources were just sitting around anyway. And then have the search team agree because YouTube promises to build the new data API search has been asking for forever.
If you ultimately report earnings on the same P&L, USD is just monopoly money you trade around to get things done.
It is definitely the case that YouTube gets lots of really cheap compute by being part of Google. But that isn't a bad thing, they are making use of an otherwise wasted resource, effectively lowering the cost for products that need daytime capacity to serve humans.
https://blog.youtube/inside-youtube/new-era-video-infrastruc...
Vimeo is paid. None of the other big companies seem willing to subsidize an online video service to the tune of tens of billions per annum.
By nearly any standard, Google's control of YouTube should be a prime anti-trust target.
And how does “providing compute” even matter, YouTube is just using google servers like every other google service. Not like they’re getting something for free because they’re part of the same company.
You speak as if providing compute is their primary business. Youtube, existed long before their compute. They already had all their own compute. They only got into providing compute because they figured they could beat AWS with their own infrastructure.
I don't think anyone's in doubt YT is a monopoly with how big and widely-used it is. It's just that they continue to survive because of how well they execute their plan of making a good service that gives users what they want (fast, instant access to videos that appeal to them) and pays out creators enough to where they can make a living, or even build a media company (LTT), off of the adsense and monetization opportunities YT enables.
YT isn’t a monopoly however. It might be dominant depending of how you define the markets but it does have competitors.
That's just like saying that car manufacturers can't use idle capacity to help start a new line of vehicles just because a new car manufacturer couldn't create a new car line.
Here we have Google using its dominant position in another market to prop up another activity through an advantage. That’s most definitely fall under anti-competitive law at least in Europe (I don’t care about the US. The modern interpretation of American antitrust laws is a complete joke).
It's silly to say that companies should never be allowed to branch out to other businesses.
Care to highlight exactly how Netflix used its dominant position in film renting in favour of its streaming business?
It would indeed be silly to say companies can’t branch out. Thankfully no one is so that’s fine.
Apple had a dominant position in selling music and in music players by 2006. It was the number one music retailer in the US. It very much used that to get into the phone market and part of its early success in the App Store was that it was built on top of iTunes and it already had more credit cards on file than any other company in the US besides Amazon.
If you're not arguing that a company shouldn't branch out, are you arguing that once a company gets a certain size, it shouldn't be allowed to invest those profits and resources into another industry?
By 2011, Apple was the most valuable company in the US. Should it not have been allowed to start selling watches, home stereo equipment and AirPods?
Is this true? My recollection being a netflix DVD customer is that brick and mortar rental stores were dominant until netflix streaming upended the DVD rental dynamic. Would love to see some data on it though!
https://hbr.org/2011/04/how-i-did-it-blockbusters-former-ceo...
https://www.cnbc.com/2020/09/22/how-netflix-almost-lost-the-...
Would the massive subsidization of YouTube’s costs not count? There’s nothing physically preventing a competitor from buying storage and compute, but it’s pretty clear that it would be extremely difficult to compete with YouTube if every user has to pay the actual unit costs to upload, convert, and play videos.
That's on the user side, though. Like AWS and Azure, chances are GCP/Google's internal hardware division bills internal teams similarly to external customers (especially as Sundar continues to demand cost cuts). Of course users themselves can't go and make their own website and experience the same economies of scale that only big companies can achieve, but if competitors come in (like ByteDance) there's nothing stopping them from stealing marketshare from YouTube if they invest in some colocated servers in key markets.
Having worked on such large conglomerates it’s closer to friends & family discount than from large external company discount.
There’s also transfer pricing and other accounting ways to improve numbers.
This is so widespread that one such company had <company color> dollars (internal purchases) and green dollars (external customers) pricing.
Every major company operates the same way.
When Disney+ "buys" the right to stream the latest Marvel movie from Marvel Studios, the company as a whole has to back out the revenue so not to count it twice. But still show Disney+'s profit.
Disney+ buying from or selling to Marvel would not show up as profit or loss for Disney.
Making up numbers:
It costs Apple $800 to make a MacBook. It "sells" the MacBook to Apple Retail for $900 wholesale. Apple corporate now has revenue of $900 from the Mac it sold.
Apple Retail sells the same Mac to the end user for $1000. Apple Retail now has revenue of $1000.
Apple Corporate claims revenue of $900
Apple Retail claims revenue of $1000.
Apple claims a revenue of $1900. But it has to back out $900 of revenue so it doesn't double count it.
Apple wants to show that Apple Retail is profitable.
I used Apple instead of Disney in the example because it is much simpler to show one item being transferred from Apple to Apple retail than it is to show a group of movies being transferred to Disney and Disney selling a subscription.
Historically the concern was that railroads might get into say coal mining by charging competitors more to move coal than they charged themselves.
Microsoft for example could have spent unlimited money on IE and the justice department wouldn’t have cared as long as it was treated as a business investment. However, leveraging the ability to change windows was seen as problematic.
Long term subsidies can also run into issues, but it’s believed YouTube is inherently profitable.
But that still isn't logical. Are you really going to say that a company shouldn't be allowed to use resources to create a new product? Should it have been illegal for Netflix to use profits from shipping DVDs to later bundle video streaming?
Should it also be illegal for companies to "subsidize" open source contributors? Should it be illegal for YC and other VCs to "subsidize" money losing startups based on previous successes?
How long should a company be allowed to spend money on money losing products to gain a foothold? Microsoft probably lost money on the first 2 generations of the Xbox. Should that be illegal? Should Microsoft not be allowed to throw billions at ChatGPT?
And the critical thing you don’t seem to understand is resources aren’t the same thing as money. Suppose Intel decided to change their CPU design so only their compiler would have access to the full instruction set, that’s not something money can buy. Anyone can bring lots of money to the table, only the monopoly can leverage the resources associated with that monopoly.
As to spending money, again it’s not about gaining a foothold because anyone can spend money. The issue is if someone is subsidizing a business to maintain their monopoly rather than operate a profitable business. Google didn’t get into fiber because they wanted to operate a profitable business they got into fiber to defend their websites. They didn’t cross the line, but you can see how long term subsidies of different business could be seen as desirable/problematic.
And just in case you haven't noticed, Intel isn't exactly doing great against AMD these days and doesn't even have a monopoly on chips with the x86 instruction set.
Do you think its also illegal for the cable companies that originally lost money on cable infrastructure and to subsidize the cable infrastructure to sell subscription content? DirecTV probably wouldn't have made money selling satellite internet. But it was able to do it cheaply because of its content delivery. Every company leverages its resources to have margins of scale.
Even HN can only exist as a free service because it leverages the resources it has from the rest of its business. No one pays dang to moderate HN. The moderation is subsidized.
People get away with breaking the law constantly, you can do 57 mph in a 55 every day for 60 years and never get a ticket. Shipping Windows with a copy of IE was like doing 57, nominally illegal but not something they would have gotten in much trouble over. But like a speeder they pushed even further and got slapped down over it.
Intel has had an X86 monopoly at various points. Doing something when they aren’t a monopoly can be legal when doing the exact same thing as a monopoly is illegal. Whether they currently qualify as a monopoly is debatable, but you don’t need a 100% market share to be considered a monopoly. AMD having a 20% market share is right at the edge of where Intel would be considered a monopoly but Intel has a great deal of market power.
> Microsoft for example could have spent unlimited money on IE and the justice department wouldn’t have cared as long as it was treated as a business investment. However, leveraging the ability to change windows was seen as problematic.
There is no confusion. Nothing came out of the DOJ case with respect to MS bundling IE.
Intel has never had a monopoly when it came to x86. IBM insisted from day one that were two suppliers for x86 before it even agreed to use the first chip.
Making it more difficult to install competitors is “leveraging the ability to change windows.”
They very much lost in large part because of a video shown in court of how difficult to install a competitor. They even lied about it by editing their own video which skipped steps showing they knew that behavior was problematic.
As to Intel’s x86 monopoly. Intel paid 1.6 billion in response to a monopoly lawsuit, and the EU fined them $1.45 billion and ordered it to end its customer rebate program. So they where definitely treated like a monopoly.
They have even swapped peoples browsers with security updates before. Though more recent examples like KB 3135173 seem like a simple mistake, it’s more provocative when such things were common.
“Microsoft later submitted a second inaccurate videotape into evidence. The issue was how easy or difficult it was for America Online users to download and install Netscape Navigator onto a Windows PC. Microsoft's videotape showed the process as being quick and easy, resulting in the Netscape icon appearing on the user's desktop. The government produced its own videotape of the same process, revealing that Microsoft's videotape had conveniently removed a long and complex part of the procedure and that the Netscape icon was not placed on the desktop, requiring a user to search for it. Brad Chase, a Microsoft vice president, verified the government's tape and conceded that Microsoft's own tape was falsified.” https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....
Also I had forgotten about this bit: “Later, Allchin re-ran the demonstration and provided a new videotape, but in so doing Microsoft dropped the claim that Windows is slowed down when IE is removed.”
https://corporatefinanceinstitute.com/resources/management/m...
FWIW, the reason you might be a bit confused--though I do not think this excuses the time you're spending here--is that Microsoft did not end up broken into two because they appealed that part of the ruling and "won"... but that court of appeals actually re-affirmed that Microsoft's actions were illegal!
https://www.computerworld.com/article/2582620/appeals-court-...
> The appeals court, in its decision, specifically rejected Jackson's order that Microsoft be split. "We vacate the judgment on remedies, because the trial judge engaged in impermissible ex parte contacts by holding secret interviews with members of the media and made numerous offensive comments about Microsoft officials in public statements outside of the courtroom, giving rise to an appearance of partiality," the decision said in part.
This is essentially akin to someone being convicted of something and then appealing the decision to an appeals court that decides "OK, the defendant clearly is guilty, but the chain of evidence used by the district attorney was compromised and so none of it is admissible; thereby, you cannot send them to jail, even though we know they are guilty".
(edit: Also, there were, in fact, serious ramifications on Microsoft for this loss... Bill Gates largely had to step down as CEO due to having gotten the courts so mad at Microsoft that it was almost broken apart, the IE team had a difficult time hiring anyone due to the shame and Internet Explorer ended up on life support <- this is often blamed in Microsoft "not caring as they were a monopoly" but that is far from the truth, and the resulting chaos for Microsoft really allowed Apple an entrance with Steve Jobs back at the helm to retake a large market segment. I did a talk about The Fall of the Roman Empire that covered some of these issues, but more detail on IE is likely a nonsequitur.) https://vimeo.com/310654342
Job first came back to prominence with the iMac, then really took off because of the iPod. Microsoft didn’t fail in the music player market for lack of trying, they had multiple failures - first Plays4Sure and then the Zune. It was execution failure. The same with the phone.
Microsoft was never able to compete with an integrated player like Apple except for the Mac.
Aka the use of private Windows API’s by IE was explicitly banned in the decent decree.
The initial case which MS lost would have resulted in splitting the company, on appeal and by the time of the new trial (which they also lost) the government changed its mind into no longer seeking to break up the company. But that was on the government not a legal victory by Microsoft.
> However, the DOJ did not require Microsoft to change any of its code nor did it prevent Microsoft from tying other software with Windows in the future
“H. Starting at the earlier of the release of Service Pack 1 for Windows XP or 12 months after the submission of this Final Judgment to the Court, Microsoft shall:
1. Allow end users (via a mechanism readily accessible from the desktop or Start menu such as an Add/Remove icon) and OEMs (via standard preinstallation kits) to enable or remove access to each Microsoft Middleware Product or Non-Microsoft Middleware Product by (a) displaying or removing icons, shortcuts, or menu entries on the desktop or Start menu, or anywhere else in a Windows Operating System Product where”
https://www.federalregister.gov/documents/2001/11/28/01-2949...
the only way to achieve the above is to change windows code.
The API issue wasn’t one of code it was one of documentation:
“The proposed settlement required Microsoft to share its application programming interfaces with third-party companies and appoint a panel of three people who would have full access to Microsoft's systems, records, and source code for five years in order to ensure compliance.[28]” https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....
It publishing API’s may seem like a strange remedy but it was a common tactic they used to limit competition. Netscape for example couldn’t release Netscape for Windows 95 at release because while the IE tea, had access to API’s they weren’t providing them publicly until release.
In the sense that there was ultimately a comparative slap on the wrist remedy, in part because of a favorable-to-Microsoft change in administration between the findings of fact on antitrust violation (in which bundling IE was a factor, but far from the sole factor) and the imposition of a remedy for those violations, yes, nothing much came out of it.
Also, U.S. vs Microsoft wasn’t limited to Netscape vs IE several other companies were involved. The first Prohibited Conduct was in terms of OEMs:
“ A. Microsoft shall not retaliate against an OEM by altering Microsoft's commercial relations with that OEM, or by withholding newly introduced forms of non-monetary Consideration (including but not limited to new versions of existing forms of non-monetary Consideration) from that OEM, because it is known to Microsoft that the OEM is or is contemplating:” …
“B. Microsoft's provision of Windows Operating System Products to Covered OEMs shall be pursuant to uniform license agreements with uniform terms and conditions. Without limiting the foregoing, Microsoft shall charge each Covered OEM the applicable royalty for Windows Operating System Products as set forth on a schedule, to be established by Microsoft and published on a web site accessible to the Plaintiffs and all Covered OEMs, that provides for uniform royalties for Windows Operating System Products, except that:”
Etc
https://www.federalregister.gov/documents/2001/11/28/01-2949...
> Microsoft for example could have spent unlimited money on IE and the justice department wouldn’t have cared as long as it was treated as a business investment. However, leveraging the ability to change windows was seen as problematic.
And how is it related to anything Google is doing?
What in the hell is "market rate" for compute? Google bought a zillion CPUs and hard drives and put them in data centers that they pay for. There's no "market rate", they own the infrastructure. They can do whatever they want with the equipment they own. A division using another division's spare compute capacity isn't in any way an anti-trust violation. What you're saying makes no sense at all.
“Amazon EC2 Spot Instances let you take advantage of unused EC2 capacity in the AWS cloud. Spot Instances are available at up to a 90% discount compared to On-Demand prices.” https://aws.amazon.com/ec2/spot/
As a monopoly Google could sell the same capacity YouTube is using on Google cloud services and YouTube could then buy that capacity. If YouTube was treated as any other customer it’s fine, if YouTube got preferential treatment it’s not fine.
I doubt anyone is going to take them to court over this but it is likely illegal.
The problem comes from Alphabet having cheap compute left over from their search monopoly. In 1982 AT&T was broken up because it was using its local monopoly when competing in the long distance market. Again for 99% of companies it would have been fine, but monopoly = special rules.
And we shouldn't forget that, in the US anyway, it's not illegal to be a monopoly. The "antitrust" laws are about unfairly leveraging your monopoly position.
Where I would try to nail Google/Youtube for with anti-trust is the merging of Music and TV/Movies into Youtube as well as the reliance of Google ads on Youtube. Both of those are incredibly annoying to deal with as a competitor and give Google the ability to corner the market on multiple fronts. Roku has highlighted this themselves, Google leveraging Youtube to make brand deals that other competitors cannot.
Are you really saying that no company should be able to create a new product based on resources it already has?
Why stop at compute? Why not make it an "anti-trust" case that Apple leverages its same operating system and chip design across multiple devices? Or Amazon uses its same logistics network to deliver more than just books?
Your argument is valid, but scale matters. Think of a game of Monopoly; you can usually tell who's going to win well before the game concludes, and you can guess which players will lose well before that.
But let's not pretend that the little guy wants to go public. If they do, they are naive. Out of all of the companies, that YC has invested in, maybe 5 have actually gone public. Every startup knows the game is to get acquired.
The fact is that some things need scale to succeed. OpenAI for instance was never going to be able to afford the compute it needed without being subsidized by MS.
Both companies had a first mover advantage by deploying a more scaleable technical innovation in a somewhat stealthy way. OpenAI is subsidized as you say, but StabilityAI promptly ate their lunch int he image production field and is hoping to do the same with LLMs.
A "successful" business makes more than it spends so it can be an ongoing concern. Any company can sell a lot of dollars for 95 cents. Youtube was never a "successful" business with a meaningful revenue stream before being acquired by Google.
> Or how did Google come to exist, when the market was dominated by (then-) huge firms like Yahoo, Lycos, and Altavista?
You realize you're arguing against the need for government regulation. This is the market working as it should. But Google became a success initially because Yahoo used it as their "search engine". Google initially offered to be bought up by Yahoo and Yahoo balked at the price. Google wasn't trying to go it alone.
You realize you're arguing against the need for government regulation.
I'm looking at some gaps in your logic when you assert that anyone who ever wants to go public is naive; when Excite (not Yahoo) declined Google's $1m buyout ask, they were already running as a public service under their own brand and had a plan for text ad sales in place. Certainly it was worth trying to develop a technology product followed by an acquisition before the more challenging (but perhaps less interesting) business of raising capital directly, but there was a widespread view at the time (among both tech and VC people) that their product was good enough for them to go all the way.
I'm not trying to debate the need for government regulation and don't know why you think this is some sort of 'gotcha'.
And who was going to fund them?
Which is why it's anti-competitive.
While it could be made open, I don't see any regulatory reason to. We want companies to reduce waste, and it doesn't make sense to require all companies to build public facing cloud, and integrate their flagships into it, just to open it up to their competitors. It would be like telling Apple that its factories reusing scrap aluminum to make iPhone cases is an unfair competitive practice.
I worked in WANOPS at Microsoft in the 90s, so my understanding of billing is literally decades old.
Google could rent this compute capacity to the masses, allowing for healthier competition.
They could, but no major corporation wants healthier competition. They want no competition whatsoever. So there is no reason at all for Google to do this, and every reason (from their point of view) not to.
So I'm skeptical that anything is actually "free" and, at a minimum, I'm sure has internal transfer pricing that has YouTube paying a reasonable value for the resources it uses. And I would furthermore assume that Alphabet management is satisfied with what YouTube's income statement looks like given those transfer payments.
It is hard to decide if this is unfair or not. It is true that Google doesn't offer this exact ability to external customers but most customers wouldn't want this type of very unreliable infrastructure. If there was a market Google or Amazon would likely offer it (basically a super-spot which has less guarantees)
Team A is running a database and needs to buy disks with a certain amount of IO capacity.
Team B is running YouTube and needs to store tons of data.
You add up the IO + storage requirements from team A and the IO + storage requirements of team B and you buy disks capable of providing that combined amount of IO + storage. The resulting cost is much lower than the cost of buying disks for team A and disks for team B separately.
Is YouTube viable as its own company at the scale it operates? I have to imagine the infrastructure costs for YouTube would be extremely high and would likely cause YouTube to downgrade quality or try even harder to put a subscription behind even 1080.
Now obviously contacts can be signed and I highly doubt they would be paying normal prices in any cloud environment given this hypothetical situation. But it wouldn't be the same as it would be now.
Does YT need Google's backing in order to survive because they don't have the resources strictly in-house to build and pay for infrastructure?
Disclaimer: Not an Economist, not even close.
If in the unlikely case they spun it off and another competitor emerged, would YT's scale make it hard to compete with this new entrant? Read: Red tape, bureaucracy, etc, etc.
Essentially back to where they were as an independent company when they didn't have Google to "protect" them...
The inverse case is what usually comes to mind first though:
Would the company wither and die if not for an acquisition? Think about Sprint+TMobile. Until the deal, Sprint was in bad shape, second to Verizon with outdated tech - in the sense that emerging technologies were based more off of an evolution of GSM than CDMA.
If TMo doesn't acquire them, Sprint probably goes "poof" and their customers flee to the remaining carriers, further entrenching their positions.
This seems like it is usually the card European regulators tend to play, worrying more about market dynamics and how that will affect costs rather than just what people pay for service.
There is only so many hours in the day and so many eyeballs watching, that is your upper bound. Bandwidth like that is not available to mere mortals, you would have to colocate with a lot of ISPs all over the place. Would take years to setup, not really even a question of money.
In the case of Netflix their content library fits inside one such colocated server, which can (or pretty soon will) do 1tb/s. Hundreds of thousands of streams per box are within reach, especially at YouTube potato resolutions.
In the case of Youtube while the long tail is very very long, I bet the most popular content of the week would fit into a similar sort of server.
So the serving portion at least is an endeavor on the order of magnitude of say 1 billion dollars a year.
No idea how to estimate letting anybody upload unlimited amounts of video of unlimited length and transcoding it into a dozen sizes. I think they did that early on to solidify their moat and it seems like a huge waste.
I pay for YouTube Premium. Creators get paid and I don't watch ads. We have a family plan so this applies to the whole family.
We spend way more time watching YouTube than Netflix but pay for both.
I don't really know why. But if I turn off ad blocking, YouTube's own ads are way more obnoxious and intrusive. Maybe it's because every advertiser has figured out they need to cram as much shit into a 5-second segment? Or maybe it is because seeing an ad at the very beginning is much more psychologically disruptive (or if the YT ad is in the middle, it is usually inserted without any regard to the video, even breaking up sentences).
And YouTube Premium views pay out a lot more per view than any ad-supported view[2,3].
0: https://twitter.com/linusgsebastian/status/16094682622194032...
1: https://twitter.com/LinusTech/status/1486918784401088515?s=2...
2: https://twitter.com/LinusTech/status/1486935690315112455?s=2...
3: https://twitter.com/hankgreen/status/1513177490730061829?s=2...
They could ask the users to pay for the content they produce and measure how many microseconds would pass before they switch to someone else's videos.
It's an option.
I don't want to watch ads, I skip sponsored sections, I feel no guilt about it, if they can't monetize enough and have to shutdown operations, I can survive without that content.
What would you say if I was dancing in the middle of the streets asking for money and blaming people who don't give any because "I am not being paid for the show I've put up, you ingrates!"?
Nobody asked or forced content creators to upload their content on YT.
I'm very happy to support the ones I follow who are doing it for a living. For most, I consider their cut of my Premium fee to be sufficient. For some, I go beyond by giving them money through Patreon and the like, or buying their swag.
If I block the ads, YouTube should pay them nonetheless.
Because I chose to block the ADS, not the content creator.
But it's not my responsibility to watch the ADS or the sponsored content.
The content has been uploaded as "public & free" and I watch it for free.
TV commercials are paid regardless of how many people are watching them, you pay for the potential audience, not for the actual number of viewers (which is always presumed).
Putting pressure on the viewers (us) to undergo the torture of constantly being nagged by glovo and audible ads every 15 seconds, it's frankly the best way to not get any more viewer and scare the old ones away, for the content creators.
You want to advertise on YT?
You pay for it and hope people will watch your ads, if they skip them, they are probably sh*t and you need to make better ads, not force people to lower their standards.
Let's be honest here -- creators aren't really getting paid any meaningful amount of money from those ads anymore. Those days are long gone. That's why all YouTubers who care about revenue do their own ads as part of their own content, and/or use things like Patreon.
There's only one reason why YouTubers even bother to allow YouTube to "monetize" them -- if they don't, YouTube won't recommend them to other viewers.
I also pay for Premium, though.
You used to be able to tell pretty quickly what demographic any given content was made for by noticing what ads were running with it. Targeted advertising removes that signal.
https://m.youtube.com/watch?v=YbYWhdLO43Q
It's definitely bizarre. I assume they were going for memorable, but your report sounds like it failed at the basic goal: remembering the product.
I'd gladly pay for ad-free YT, mostly to send the message that I will never ever go back to watching ads. The problem is that google is already stealing my data.
Where is the stalker-free option? Of course, I'd never trust google anyway...
Then why don't you? That's been an option for years.
My data is worth much more to me than the cost of a YT sub.
But aside from that, it's totally possible to minimize your exposure and still pay for Premium. What I do is have a Google account that is only used for YouTube, paid for through a prepaid debit card, and I only watch YouTube on a single tablet that is not used for any other purpose.
It's not perfect protection, but it's also not terrible.
YouTube is the last Google service (outside of Android) that I still use. I'll be ditching it as soon as some other service comes reasonably close to being able to replace it for me. That hasn't happened yet, but the day is coming closer.
uBo doesn't work everywhere. I do have it installed on Firefox for Android though.
Google filters and shapes the results so much now that I’m inclined to say it’s all essentially advertising. That is, Google is giving you want it wants you to see in what order, and lately filters out anything that isn’t helpful for Google.
EDIT: Also just because people are forced to watch 5 seconds of an ad doesn't mean it's got any measurable positive effect (for the advertiser) whatsoever.
Not all users. I pay Google in order to not have to watch those ads, and they aren't served to me.
I only pay $9-10 per month, whereas there are some companies who would pay way more for me (eng leadership/founder) to learn about their product. It would be very expensive CAC (cust. acquisition cost) but maybe worth it for a some niche products.
Maybe Google needs a way to "recommend" reviews for products in the video recommendations so that businesses can pay for placement (like Google Ads).
I would say "please don't give them any ideas", but I already ignore YouTube recommendations anyway, so that wouldn't actually bother me.
However, if YouTube found a sneaky way to get ads in front of me regardless of my premium membership, that would eliminate the entire value of the premium membership. And, for me, it would reduce the value of YouTube enough to get me to finally ditch YouTube once and for all.
Which might not be a bad thing, really.
> Messrs Page and Brin control more than half of Alphabet’s voting rights, and would not like to be the first titans of tech to start selling off the family silver.
Many commenters here have correctly pointed out that the business case presented in the article makes approximately zero sense. That's because the article is actually an antitrust argument disguised as a business analysis.
Amazon: AWS is one of the most valuable businesses ever created. You don't need the retail arm any more, now that it is enshitting itself. Also spin off the media company, comprising Audible and prime video, to make a Disney competitor. Amazon would absolutely be more valuable broken up.
Meta: Meta has always run 3 separate products either way. Spinning off the loser (Facebook), and the non-social networking product (WhatsApp) would let Instagram grow wings against TikTok.
Google: Search, YouTube, ads, and technical infrastructure (cloud) can all easily be separated, and Search and YouTube could likely command an even bigger premium by treating other ad networks as first-class citizens. Google ads could get a lot more business too when they are not tied to other products (those products might compete with yours, driving you away from Google ads).
And twitch.
Just as anecdote, I don't have whatsapp groups for my fb groups. My whatsapp and fb worlds are entirely disconnected. People in groups from fb often promote Discord (which I don't like: real time chatting with strangers feels odd to me).
Facebook is aggressively promoting its own chat for groups, spamming it violently and so I'm forced to unsubscribe/ignore lots of chat groups now. Do people really need yet another chat platform?
Exactly that, that the personal updates for close friends and family that we used to post on FB are now posted on several dedicated WhatsApp groups. Yes, that means that that former highschool colleague who you'd met once in the last 20 years won't get to see them, but it's still social.
> Facebook is aggressively promoting its own chat for groups,
Could be, but the WhatsApp interface when it comes to group chats is way nicer and more intuitive (especially when it comes to sharing photos).
Maybe theoretically possible but I have doubts.
As Youtube's founding was February 2005, they now have 18 years (i.e. exabytes) of videos stored on Google's datacenters. Exporting all that to a competitor like AWS (even with mass Snowmobile transfer service) probably wouldn't make financial sense.
I worked on a corporate spin-out from a petroleum company and there was months of back & forth negotiation for "IT infrastructure services pricing" from the ex-parent company. The new spin out company was definitely not getting a deal from the ex-parent company and switching to other datacenter competitors wasn't realistic because the ex-parent already had all the data and the existing IT staff expertise to run-&-maintain the spin-off's proprietary systems. (E.g. think Lotus Notes custom programming workflows).
Google could realistically raise their infrastructure prices to an independent Youtube spinoff but that higher cost is still less than switching to Azure or AWS.
I don't care too much about Facebook, no doubt they are capable of failing on their own.
What sucks about Microsoft and ads right now is they sell you a product and then also drown you in ads. Either I pay cold hard cash or they give me ads, but not both; they shouldn't get to double dip.
(Googler opinions are my own).
If true, then their internal engineering limitations directly impact how viable the idea is.
(sarcasm, in case Poe's Law has you down)
I assume by feasible you mean profitable. Which means there is a pricing mismatch then.
> You don't need the retail arm any more [...] spin off the media company, comprising Audible and prime video, to make a Disney competitor
The whole point of the conglomerate model they use (following Costco) is that the membership fee grants consumers access to a bevy of services. The services may not work a la carte. Further, spinning Amazon media to become one of the weakest Disney competitors doesn't obviously enhance competition or consumer welfare in media.
> Spinning off the loser (Facebook), and the non-social networking product (WhatsApp) would let Instagram grow wings against TikTok.
The "loser" (Facebook) generates most of the revenue and profit at Meta.
The Google analysis arrives at a viable conclusion (the ads business could be run as a utility), for the wrong reasons. (For ex: Search/YT would not get a bigger premium by treating as first-class other, weaker, ad networks. The near-monopoly is what drives pricing power and is frequently a reason cited for forcing a hypothetical breakup.)
Anyway, this stuff is not obvious or easy, even assuming people can agree on goals (which is difficult).
They don't need to. Prime could still offer Prime Video / Music as a membership perk. But if the media services are independent, maybe it'd turn out offering one or more of the others, or letting customer pick and choose, would end up making more financial sense (FireTV can already be used to subscribe to competing services in addition)
I'm not saying it's necessarily a good idea - I don't have an opinion on that - but the bundling of services does not depend on them being part of the same company.
The consumer would likely end up paying more (because Prime Video / Music can't be run at zero or negative margins as part of a bundle; ditto for other media options like Spotify). Further, I'm not sure what goal would be served by doing all of this and increasing costs to the consumer.
But even assuming that'd not be the case, anti-trust law is in large part aimed at ensuring competitors have fair access to the markets, not minimising costs to consumers. It's presumed that over time the former will ensure the latter and/or improve service, but it's really a separate issue.
That said, I don't see a compelling anti-trust case for going after Prime Video anyway - there's plenty of competition in that space.
However, there is also another possible cost reduction in forcing unbundling as well for those customers who don't want Prime Video, but want the other benefits. Not at all convinced it'd be worth it. That's not the part of Amazon that's a competitive issue.
If the service cannot compete on it's own merits, and is being propped up by an unrelated business, how competetive is it actually?
This is only true if external actors redefine "the service" to be something other than what millions of customers voluntarily purchase (Prime). For example, I subscribe to Prime because I get free/better shipping on goods as well as video. I don't know what % of my subscription fee I would allot to either, but fortunately I don't have to do that.
Disney makes a lot of money in theme parks etc.; Walmart makes something like $42B annually in healthcare; Costco sells cars & travel packages; Kroger sells gas (petrol); Apple (also a competitor) makes most of its money selling phones.
Why leave all those businesses intact and target Amazon?
That just doesn't seem internally consistent.
The Disney corporation is built around exploiting the rights to these media IPs to the fullest.
In contrast, Amazon is the online version of Walmart that can also sell you computing time and makes feature films which are just a perk of their "fast shipping" club.
There's a pretty clear distinction here, even with one of the other mega-conglamerates (disney) that probably owns too many different content production units.
I would consider this unlikely, for reasonable definitions of "significant." Costs to license IP and develop content are likely the dominant term in expenses.
> what kind of deal would they be able to get from the newly spun off AWS?
The same as everyone else, or it was a re-org and not a breakup.
Where do we draw the line? Should Apple be asked to spin off iCloud because email, photos, documents should all be independent services?
Note that neither Prime Video nor iCloud are monopolies, which would bring different considerations into the matter.
Businesses are allowed to do more than one thing. I'm not sure when it became popular to try to strip down businesses to a single SKU each, and it's not obvious to me that consumers (or anyone) benefits from pursuit of that goal.
Amazon's whole retail business started by selling paper books. Extending that to kindle and audio books doesn't seem so outrageously "unrelated". Its more of an ecosystem which has legitimate benefits to the consumer. And once you have audio books, music and video doesn't seem like a huge stretch.... etc etc.
Apple is the obvious example of this. Do you think every single service apple offers should be broken into a separate company? Apple pay, apple music, icloud all seem to be "unrelated" but the consumer legitimately benefits from these things being bundled into a cohesive ecosystem.
Breaking these things into individual companies which has to be profitable based on just their one product would lead to higher prices and worse user experience, IMO.
For non-consumer facing products, the case is clearer. AWS / GCP could be split out nicely. The ad networks of meta and google could be independent without hurting the consumer at all.
Prime certainly feels more like a bundle of unrelated things, with the streaming service, and cloud music/photos/ebooks/etc. stuff no one uses, and whatever Twitch benefits they have now. I guess Costco might actually have some stuff like that, but I’m not aware of anything other than warehouse access, some online shipping benefits, and the travel/car/“Next” shopping.
People may not read books as much as they used to and many still read physical books but lots of people use ebooks.
But I could be wrong about it being rarely used.
You wouldn't get magical efficiencies by combining an oil company with an airline, for example, even though oil is a key cost component of air travel.
The same goes for compute resources and ad sales - both are roughly commodity services with lots of competitors. Youtube gets some efficiencies from vertical integration with both, due to incentive alignment, but also gets a lot of inefficiencies from the added complexity and management and the need to keep up with competitors in the commodity part of the business, which can be expensive.
The semiconductor industry is a place where you would think you would see an obvious efficiency to vertical integration - designing your process technology specifically for your chips. In practice, vertical integration between the chip design and manufacturing sides is almost gone, with a few notable exceptions. This is because it is actually not more efficient to be integrated.
Technical infrastructure seems to be similar to me.
Three products which share data. I don't care what the law says, or what they tell a select/congress committee, nothing will convince me otherwise.
Prime video is what they use to get a foot in the door, then they know you'll want to extract as much value as you can from your prime membership, and that's done by buying shit from amazon
That is total nonsense, completely irrelevant, and true.
Conglomerates being worth less than the sum of all parts is one of the stupidest parts of Wall Street. There is no actual rationale for this besides maybe it being easier to evaluate a company doing only a single thing? Specifically with regards to the examples given - Amazon, Meta, Google - it's the cross-subsidising and reuse of stuff that makes them profitable. Prime video without AWS' cache isn't a great competitor to Disney; YouTube on it's own will have a ruinous infrastructure bill that is subsidised by Google now; WhatsApp doesn't make money so can only survive on someone else's dime, etc. etc. Same goes for traditional conglomerates - of course GE were stronger before they split up into three. What will GE Aerospace do next time there's an air travel downturn like a pandemic? Crash and burn unless it has enough reserves, because it won't have the benefit of being propped up by different businesses that aren't impacted (like say GE HealthCare). Bombardier today are in a much worse spot, focusing only on a minuscule and volatile niche (private jets), but at least in their case it wasn't their choice, Boeing bankrupted them with protectionist tricks.
The real reasons to split them up would be to improve competition and the choice of consumers, not because "idiot investors think 'value' will go up".
One example: some parts of a business need a positive consumer reputation and others don't. When you connect these under the same company you may end up with two business units that are each less valuable than if they were free to take the approach that best suited their business.
For example, an ad company that didn't care much what consumers thought about it would use fingerprinting to personalize ads and it's prevalent in the industry, but Google committed to not doing this. Why? My guess is that a big part was reputation: having an ads division that's tracking users with no opt out is inconsistent with the company-wide policies Google needs to be competitive in consumer markets.
In this case I think the effects are positive, in that the display ads division is closer to what consumers would want than if it were independent, but I think it's pretty likely that spinning DoubleClick back out would increase overall profits.
(I used to work at Google, and here I'm speculating about decisions made several levels above me that I wasn't a part of.)
What possible anti-trust rationale would there be to forcibly break up the company?
You don't think of it as a social networking product, but it is used as such. I consider Discord social media, and WhatsApp is honestly a text only Discord competitor in the grand scheme of things, all the group chats are reminiscent of Discord servers, but for people who dont care about all that Discord has to offer, even if they never heard of Discord. I would absolutely include chat platforms under social media.
Not saying my perspective is correct, but I think of a "social networking" product as one where I'm talking to groups of people. That's not how I use WhatsApp. That's always 1-on-1 conversations with people I know in the real world.
Sure, the US pursues strategies related industrial policy and national security. The CHIPS act or the Inflation Reduction Act are examples.
But you don't need a "big reason" why to explain why US companies like these tech firms have been underregulated. It isn't isn't some mystery, it is just (unfortunately) normal. If US firms are grossly underregulated and under-punished for simple stuff like wage theft, you don't need to invoke strategy to explain why big tech has gotten away with anticompetitive stuff in the past.
Amazon is e-commerce, i have multiple choices to shop on web. Amazon has even benefited the consumer by forcing retailers speed up shipping. For cloud hosting, there are alternatives to AWS. There’s healthy competition in both fields.
Meta the consumer is the advertiser. They are the ones spending the money. For advertising, there are different channel and mediums. You could buy billboard ads, tv/radio ads, direct mail etc. Competition is very healthy.
Google the same thing. The consumer are advertisers. Thats the market.
Lets compare major anti-trust actions. Standard oil was the pretty much the sole source of oil in the US. Consumers had no choice. ATT another major antitrust case where there was just one telecom company in the US. Kodak where they were controlled all the film market.
- 2.9B Monthly Users in 2022 - 5.3B People with Internet Access - 55% of the world uses Facebook.
It seems both Instagram and Whatsapp have about ~2B monthly users. And sure, these numbers are juiced but none are losers.
That aside, as we know now, Google wasted it's time with Plus. Instead it should have fleshed out YT's social aspects. While that's easy to say in retrospect, it's still not a bad idea if Google wanted to "social media" product.
[0]: Most recent Amazon.com, Inc. 10-K https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7e...
At a product-level view from 10,000 feet, it might seem this way. In reality, these are deeply interconnected systems that are 15-20 years in the making. “Easily separated” are the last words I’d use.
Fact is: there is very little business sense in an outfit like YouTube. You have massive server costs, massive bandwidth costs, a fickle audience, a precarious copyright situation, and very little margin for recovery.
Yet, YouTube is and remains popular. Very very popular. So, you would think there is some room for a play there. And there have been sufficient suggestions from various parties on what that play should be. Increase advertising. Go full-Spotify. Et cetera, ad absurdum.
What YouTube has implemented is a mediocre mix of worst-case options: sure, customers can get a subscription, but it does not actually offer any advantages. And yes, partners can create opportunities, but only if they're a top-10 media company, and therefore won't create anything if their life literally depended on it. Smaller partners are smothered: Alpha-Goo-tube could listen to them, but they don't and won't.
So, YouTube right now is an entire market-in-itself waiting to be disrupted. Spotify did it for audio; who will be the disruptor for video, and when, remains to be seen. Given the current market conditions, we'll have to wait a year or two, but that YouTube is toast is pretty much a given.
Focus implies that Alphabet cannot avoid being over controlling (why? Any evidence other than idle speculation?) whereas devotion to increasing quarterly shareholder value would somehow be hands off (LOL has the author ever worked for a megacorporation?), or eventually being bought out by a (probably overcontrolling) competitor (Disney? Netflix?) would by some miracle be less overcontrolling than Alphabet currently is. With a side dish of the assumption that Youtube would be better off with less control and oversight. Why is that?
The second argument is also weak. The claim is there are two ways to being ad sales in-house at Youtube (they... aren't already?) one is paying financial market middlemen billions to do a corporate split such that there will only (temporarily?) be in house sales dept, the other option is a cheap, probably money saving, departmental re-org. "We can save money by making a giant pile of cash and lighting it on fire". Naah, not taking the bait, doesn't sound profitable.
The third argument is the author is some kind of insider and our toothless and ineffective unelected regulators hate google more than they hate facebook (solely because he claims it to be the case), so splitting from google would reduce government regulation. I mean, we're just making stuff up at this point, aren't we?
The forth, unnumbered, argument is a restatement of the first argument, that Alphabet is inherently and uncontrollably hypercontrolling so "freeing" Alphabet from hypercontrolling responsibilities WRT youtube would allow better micromanagement of various AI projects. Now wait a minute, the first argument was Alphabet's theoretical control issues are "bad" therefore YT should leave, why is the forth argument that toxic management is somehow good when its applied to new AI divisions? I have a better idea, if the author repeatedly restates that Alphabet management is incompetent and detrimental to everything it touches, why let it ruin AI along with ruining Youtube, why not push to implement better leadership at Alphabet so all the orgs underneath Alphabet would benefit? I'm just saying if the repeated theme of the article is Alphabet is a "rats deserting the sinking ship" argument, well... why not fix the ship so its not sinking instead of coming up with elaborate and expensive evacuation processes? If Alphabet management is toxic therefore YT should leave to avoid it, then a couple paragraphs later claiming Alphabet management is toxic therefore they need to manage AI even harder, doesn't make sense.
I'd venture to guess that YouTube provided more value than just their customer base. I often wonder how much of their tech stack made it into the larger Google org.
Example; for the longest time when you'd log into gsuite via a SAML IdP you'd notice a youtube url in the login flow.
Very little, though that may be changing. Most of YouTube was written in Python, which is essentially unknown for a production system at Google.
> Example; for the longest time when you'd log into gsuite via a SAML IdP you'd notice a youtube url in the login flow.
This was just to set the YouTube "logged in" cookie.
1) When the spinoff might have negative value. Eg. has big liabilities. But you don't need to make it fully independent to gain this benefit - it can be a wholly owned subsidiary.
2) When the spinoff can't get clients or suppliers due to the business of the parent company - eg. the renewable energy division of BP might not have much success getting charitable funding from green charities.
3) Where someone else wants to buy the spinoff for more than market value for strategic reasons. Eg. to have its patents, or to shut down a competing business.
I don't think any of these apply in the case of Youtube.
It's complete nonsense and shows the person writing has no idea how that particular business works.
There's so much great content on YT for just about anything. Gardening, mechanics, computers, games, sports, you name it. It's all there.
Most other platforms are quite vapid. I suppose that's fine for the drooling masses, but I'm a quality of quantity person.
On ads ATT has depressed revenue a lot but apples recent updates will mean better tracking soon and revenue will recover.
Everything is pointing up for YouTube (and meta), this is the worst time for a change in ownedhip structure. You should do that at the top not the bottom.
Basically, all the major players in the tech space are going to make major transformations to their internal services over the next 5 years. YouTube as you know it today is not going to be here 5 years from now.
And consider the longer term signal: is alphabet so shot, it's divesting asset for cash, and if so.. why now?
Non-premium YouTube is just an ad machine that happens to show some video content between ads. It used to be the opposite of that.
If I watch a 9-minute clip, I get 2 ads at the top but can skip them after the first 5 seconds of the first ad. And then there's often a 15-second unskippable commercial in the middle. So about 4% ads. Sometimes there's a single first unskippable 15-second ad instead, so about 5% ads. (And the ratio seems roughly the same with shorter videos, as they don't have the ad in the middle and sometimes skip the intro ad altogether when watched in succession.)
While network TV is 8 minutes of ads in a 30 min slot, or 27% ads. So about 5x as much ad time.
If YouTube started implementing unskippable ad segments that were multiple minutes long then there would be a comparison. But in my experience, YouTube is miles better than network TV ever has been in our lifetimes.
That said network TV isn't necessarily a great comparison. For me I'm most likely to compare with YouTube of the past, very similar content, but no ads. Or YouTube with adblock or third-party android apps.
So that's great if 27% ad time is illegal in some other countries, but I guess they either make it up with mandatory fees (like in the UK) or have lower budget programming.
And I don't feel entitled to get it free never said or implied that.