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Comment by jstanley | Hacker News Reader

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jstanley

Are Google having cashflow problems?

How come they're shutting down so many of their services?

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>Are Google having cashflow problems?

Nope, they are more profitable than ever.

My friend who works at Google explained to me that a big issue is maintenance. It's a tougher problem than it sounds because if an issue comes up someone needs to understand the codebase well. When a product is no longer worth the budget of full-time employees the best course of action is to kill the product.

This: Nope, they are more profitable than ever.

Goes hand in hand with "shutting down a lot of services" since rounded to the nearest billion dollars the only business Google has is search & display advertising, generally deleting anything else accretes positively to the bottom line :-)

There's some truth to that, but their profits are growing because their annual revenues are consistently and exponentially growing, not because their costs are going down:

https://www.google.com/finance?q=NASDAQ%3AGOOG&fstype=ii...

Digital advertising just happens to be a very good industry to be in right now.

The term you are looking for is efficiency which is the measure of how much of the business is dedicated to the parts that provide the revenue versus the parts that don't :-).

I left Google a couple of years after Patrick Pichette joined. Patrick is a great guy and very focused on putting as much money as possible into the bank account (great for share holders, not so great for lifestyle benefits).

But the point is that there is a target return on capital that every group is being held to and those that don't make the cut are being tossed. That helps the overall number get better (assuming those freed up resources either join more profitable projects or leave)

Makes sense. It's like the people who can't throw anything away because they "might need it" some day. Eventually they are drowning in clutter and just keeping it all organized would consume more time than they have.

To me it sounds more like they are shutting down services that can't be monetized :/

Or services that have no future? SMS search is a dead man walking in 2013.

Not in lots of countries.

Nearly every single country is moving to smartphones. At wildly different rates and current penetration, but the vast majority of the world is going to be on smartphones in the near future. Companies who focus on the present and are obsessed with backward compatibility will inevitably find themselves behind more forward thinking companies.

Even in the US, data coverage isn't even to 50% yet. In the developing world, electricity coverage can't support phones with less than 1 week of battery life. Both of these things are hard technical problems and I don't see them being solved any time soon. Smartphones are promising, but they haven't proven themselves as reliable enough to properly replace dumber phones.

Revenue wise, there is still a lot of money to be made on SMS, even in countries like the US where smartphones are king. SMS aggregators and gateways still make significant amounts of money, and it's not decreasing.

Google is already one of the leading companies in the world at providing technologies for smartphones. Shutting down SMS search does not help them in that regard one bit. All it does it remove a useful service from the world.

SMS access is useful regardless of whether your handset is smart or dumb. SMS traffic often gets through when data cannot, either because of signal strength or circuit capacity. I have successfully used Google SMS search from my smartphone when it could not load Google.com in the browser--once to find the nearest hospital when dealing with a dangerous medical situation on a hiking trip. Better hope the 3G/LTE coverage is better in the backcountry now, I guess.

This is terribly short-sighted decision by Google.

it's a "dead man walking" everywhere. SMS has no future except death. in some regions that death will come later than others but that doesn't mean we're going to see a great SMS resurgence any time in the near future. nobody cancels their data plan and gets SMS instead.

Whenever I want to send something to someone I know, it's an SMS. I can't imagine going into my browser, going to the facebook website, copying and pasting my long password in from the keepass app, looking their name up, opening the message interface....

When I can just click the SMS button, click their picture and go.

People may not cancel their data and get SMS instead but I don't really see SMS going away in any sort of a hurry.

Well, there are a few exceptions. I did. The tiny amount I use my cellphone I can't really justify a data plan.

Cancelling my data as soon as contract is up :).

Looks like it's a big chance to make a startup based on big-company closed service. E.g. Feedly is a good option.

Google "Babel" is coming. Maybe that's why.

I also think Google's top executives have a certain vision about what apps they will need in the future, and where they are heading, and that doesn't include many of the more "random" projects that were built before.

This seems to be a common theme after Larry Page took over as CEO. Instead of having lots of small, separate things, everything seems to be moving towards having less, but larger services. Probably one of the better examples is google+, along with google now. It will be interesting to see what Larry's end vision is.

My guess is Google is focusing more on a certain goal than having cash flow issues.

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