5 ms·

How did they make any money at all without ads?

• peab 1y ago
  they didn't - hence the ads
  • doublerabbit 1y ago
    I remember being clever at school and showing off that if you typed "nukes" it would display an advert for ebay down the right-side. "Buy Nukes on EBay".
    • smcin 1y ago
      ...and what did those eBay hits look like, back then? Real (books/films/tshirts/sings about nukes?), scam or unrelated?
  • justapassenger 1y ago
    It's a very common story in industry. You start nimble, and disrupt bloated platforms. Then, as you grow, pressure grows and you also bloat. Then new company comes that brings nimble product and disrupt you. Search, TV->internet video, newspapers->internet - all of them go through those cycles.
    • zahlman 1y ago
      I've already grown to hate the very words "nimble" and "disrupt".
    • dvngnt_ 1y ago
      Used to be. Now the megacorp just buys the disrupting platform
      • lo_zamoyski 1y ago
        Most revolutions are merely power transfers. But sometimes the incumbent crushes the revolutionary. And sometimes the incumbent hires or bribes the revolutionary. And sometimes the incumbent guts the revolutionary and wears his face as a mask.
      • eru 1y ago
        You say that like it's a bad thing. Can you imagine a more effective way to incentivise more people to start even more disrupting platforms? Can you image a more effective way to get investors to give money to these upstarts? It's much easier to get your rabble-rousing startup to threaten disruption (and then be bought up as a precaution), than if you had to actually battle it out in the marketplace to the bitter end.
        • int_19h 1y ago
          It's a bad thing for the rest of us, because it means that all those platforms don't actually disrupt anything at the end of the day, and we have to keep eating the same turds.
          • eru 1y ago
            You get way more of these new platforms popping up. And some of the might not get bought up in time. (And the wealth of the incumbent ain't infinite, so there's a limit to how many they can buy up.)
    • ghssds 1y ago
      Don't worry. Our legislators around the world are hard working so this doesn't happen again, protecting us from harmful contents and cementing current industry leaders' position.
      • foobarian 1y ago
        > protecting us from harmful contents In Soviet Russia government protects harmful contents from us!
    • boringg 1y ago
      Wouldn't it be nice if some companies instead of ramping up ads for revenue passed along the value to consumers? Once they made their money back on the original investments convert to a lifestyle and provide a valuable product without squeezing every penny our of it and in the end killing it. One day maybe.
      • xp84 1y ago
        I feel like you'd need a new corporate structure or something, like the way an S-corp is different, but on steroids. Because I agree, the forced obsession with "growth" at all costs, which seems necessary to operate a public company (at least in this century[1]), is imho the #1 reason why enshittification is unavoidable. [1] I'd describe nearly all present-day corporations as fixated on quarterly results even at the expense of business viability. Something I truly don't understand is why big companies say, 75 years ago seem to have been so much less that way. If anyone has any theories I'd love to hear them.
      • chongli 1y ago
        They did pass on a lot of value to consumers. They used their profits to grow, build Gmail, buy and grow YouTube, build Android. Just running Google as-is without ads would have produced less value in the long run. Plus the SEO tide (which relied on DoubleClick ads that weren't yet owned by Google) began to rise and would've drowned Google Search much earlier if they hadn't grown. Where I think Google took the bad (for consumers) turn was when they purchased DoubleClick and began to consolidate the entire ad business. Instead of losing money to SEO spammers, they began to make money. This put Google into a conflict of interest against their own users. Ever since then they've been piling onto that conflict of interest, draining more and more value from their products.
      • Workaccount2 1y ago
        Google's customers are advertisers. People overwhelmingly prefer ad-supported to subscription supported. Google would be a dramatically better service if everyone who used it paid. I really, really, cannot overstate that. The internet sucks because users feel entitled to everything on it for free. They don't want ads and they don't want to pay subscriptions. uBlock origin, archive.is, and constant complaining about how the content sucks. The internet is full of children with a naive understanding of how things work. The are so deluded that they even call on companies to simply provide them everything for free if they want to be "successful".
    • darth_avocado 1y ago
      I think there’s a middle ground between not making any money by not showing ads and plastering half the page with ads in a way that almost renders the product useless. I’m sure this was a result of a long list of promo packets that incrementally kept adding 0.01% increases to the ad impressions.
      • eru 1y ago
        Just one facet of what we call 'promotion oriented programming' (or promotion oriented design). Google's promotion guidelines used to include that if you want to get a promotion on a technical track, you have to demonstrate a mastery of complexity. Cue the unnecessary complexity in some projects meant to get the author promoted. (They might still include that requirement. I don't know. I haven't worked at Google in nearly a decade.)
    • andrewmutz 1y ago
      You forgot the main source of pressure: you sell off equity in your company in exchange for cash. The buyers are buying the promise of future profits. At first, you still hold the vast majority of the voting rights, but over time you sell more and more and expectations rise and rise. Eventually you are an organization whose purpose is to return cash to shareholders in the near term. Hence a page full of ads, and no reason to think things will ever change.
      • tonmoy 1y ago
        Is that the reason Steam is still loved by users? (not sure how long that’ll last tho)
        • int_19h 1y ago
          I think the fact that Valve is still a private corp is a big part of it, yes. It allows for continued ownership by people who have meaningful beliefs of what it means to do something the Right Way and who run the business accordingly. This isn't to say that private corps are always "good" like that - the temptation to go for easy pickings and enshittify is always there. But some owners at least won't do that for various reasons, while a public company seems to always end up chasing short-term profits above everything else.
      • eru 1y ago
        Google's original founders still hold the majority of votes. > Eventually you are an organization whose purpose is to return cash to shareholders in the near term. Amazon's history shows that public shareholders can be very patient with cash being returned to them, or the company ever showing a profit at all. Tesla used to be in the same boat. Shareholders are very forward looking. They just don't necessarily trust 'visionary managers' not be full of bullshit. Probably rightly so.
      • Workaccount2 1y ago
        >purpose is to return cash to shareholders in the near term. I see this constantly repeated in anti-capitalist/anti-corporate rhetoric, but on the other side, shareholder meetings, finance conferences, financial service talks, no one ever wants this. Maybe the 20 year old stock bros on discord pumping penny stocks, but no serious shareholder of any company with a name you might recognize. It happens, there are cases of it, but overwhelmingly the vibe is "long term stable profit generation".
    • efitz 1y ago
      The term for this is “enshittification”
    • hn_throwaway_99 1y ago
      I think it's a mistake to think of these cycles as inevitable, and that it's guaranteed that some small fry will disrupt the current giants. Yes, they may have happened in the past, but large companies are much more cognizant of the cycles of disruption now than they were 30 or 40 years ago. Microsoft was a behemoth in the late 80s and they're currently number 2 market cap in the world. Many folks on this board may be too young to remember Netscape's boast of "The Browser is the OS" in the mid 90s - well, Netscape is long gone and Microsoft is still giant. Only 2 years ago you saw pronouncements that OpenAI was going to be the death knell for Google, and it was it seemed to be the kick in the pants that Google needed to get their AI story working. Facebook just basically bought all its nascent competition (Instagram, WhatsApp, etc.) I think disrupting large players will be much harder than it was it the past.
      • bawolff 1y ago
        These cycles have been going on a lot longer than the last 40 years. Everything eventually dies. Rome used to rule the world; sure it took about a thousand years, but it ultimately didn't last.
        • hn_throwaway_99 1y ago
          I fully accept the heat death of the universe will eventually take down Microsoft, but I don't think that's what the comment I was responding to was really about.
          • bawolff 1y ago
            My point was that this cycle is not a recent thing, but has been present all throughout history. Bell labs fell. The hudson bay company fell. Arthur Andersen fell. All these were much more entrenched than microsoft is today. I'm not suggesting you have to wait for the heat death of the universe.
    • cmrdporcupine 1y ago
      Google managed to dance the knife edge there for a lot longer than most though. AdWords made so much money in a fairly unobtrusive way, that they were able to scale it out without pissing a lot of people off. That and it was actually even sometimes useful. They clearly decided to just say "fuck it" though. Sometime after Ruth Porat replaced Patrick Pichette and especially after Sundar took the helm (both happened while I worked there) but most especially in the last 3 years.
    • lo_zamoyski 1y ago
      "Always two there are, the disrupted and the disruptor."
    • NoPicklez 1y ago
      Well Google has been a very good example of not giving into that pressure for a very long time. Their landing page remained ad free for decades and their revenue came from sponsored links through ad-words which was a minimally invasive ad strategy which didn't show banners etc.
      • a96 1y ago
        For values of decades close to one.
  • mattigames 1y ago
    But like always they didn't stop once they were a bit profitable with a few ads, instead they got greedier and greedier and made their product worse once they captured most of the market, I have wonder if there can exist some variant of capitalism that punishes becoming a bit too greedy, like a soft ceiling (tied to the minimum wage) over which most of the profits go to taxes, and a hard one where all profits over that go to taxes plus mandatory social work by its owners/executives.
    • owenthejumper 1y ago
      That capitalism technically already exists in the US. We have very strong monopoly laws. It's just...nobody is enforcing them. Unlike the 70's and 80's: https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System
      • xp84 1y ago
        AT&T eventually gave up and agreed to divest of the RBOCs because they didn't like their chances with the regulators. Imagine a Big Tech company having so little faith today in their ability to manipulate the government between lobbying, campaign contributions, and the most modern and economical play, stroking the President's ego.
      • nerdponx 1y ago
        Biden's FTC chair tried her best, but it didn't go anywhere because she had no support and Trump put an end to it. But both sides amirite?
      • int_19h 1y ago
        It's because the laws were creatively reinterpreted to mean something very different from what the people who wrote them had in mind. https://en.wikipedia.org/wiki/The_Antitrust_Paradox https://en.wikipedia.org/wiki/The_Antitrust_Paradox
    • kelseyfrog 1y ago
      > instead they got greedier and greedier and made their product worse once they captured most of the market I wouldn't necessarily put it that way because not Google, nor any company, has moral capacity. They don't have souls. What they do have are incentive structures, and those flip when the stock goes public. Pre-IPO: the board is mostly founders and VCs holding paper wealth. Their shares aren't liquid, so the only way they get paid is by making the pie way bigger for some future exit. That means "grow, grow, grow." and that means playing nice with customers. Post-IPO: the board is legally stuffed with "independent" directors, whose pay comes in RSUs tied to the stock price. Now the shares are instantly tradable, and shareholders who can bail in a quarter want to see results in a quarter. Directors translate that into exec comp, and suddenly management's job is "make the stock go up right now." Some theorists point out the obvious hack: take away the hot potato. Slow the game down. Make shares harder to flip, make earnings less frequent. If you could only trade stock once a year, you'd actually care what the company looks like in a year. If they only reported results annually, you'd be forced to think in years, not quarters. Upside: management can focus on products and customers instead of quarterly guidance theater. Downside: investors hate being locked up, and capital gets more expensive because people price in that illiquidity. Transparency drops, execs get more room to bullshit. It's a tradeoff: you can have maximum liquidity and hyper-efficient capital markets, but then you get short-term brain damage. Or you can slow the game down, but then you're basically asking people to trust managers more and accept worse capital efficiency. Nobody;s found the perfect middle yet. LTSE[1] tried, dual-class shares are a kludge, and otherwise we just live with the cycle: grow like crazy private, IPO, then spend the rest of your corporate life addicted to quarterly earnings. 1. https://ltse.com/ https://ltse.com/
  • marcosdumay 1y ago
    They had plenty of success with the ads that didn't disrupt the main results until they decided that search results didn't matter and selling their users to malware was more profitable. For many years they were very profitable, with great search results and good quality ads.
• zugi 1y ago
  Volume.
• stevage 1y ago
  They didn't. That was the whole "Step 2 ???? Step 3 Profit" era.
• smt88 1y ago
  They licensed the engine for a while. Yahoo Search was powered by Google, for example.
• joenot443 1y ago
  Someone once asked Facebook the same thing. It seems the only things certain in this industry are death, tax, ads, and graphics cards.
• geuis 1y ago
  Because I was alive back then: This was the venture funding "we're a startup era". And Google succeeded eventually. But in that era making money didn't matter. It was just about grabbing market space. And oh boy did they succeed. But all bills become due eventually. Stock holders start demanding continuing increasing profit and that eventually leads to the downfall of any good product.
  • eru 1y ago
    > Stock holders start demanding continuing increasing profit and that eventually leads to the downfall of any good product. Don't blame ordinary shareholders here! The original founders still hold a majority of decision making power (I think via super voting shares).
• input_sh 1y ago
  The same way any tech company works now: use investor money to offer things for free or unrealistically cheap until you corner the market, and once your competitors are no longer relevant you start milking every buck you can.
• DougBTX 1y ago
  1999, $25 million investment: https://googlepress.blogspot.com/1999/06/google-receives-25-million-in-equity.html?m=1 https://googlepress.blogspot.com/1999/06/google-receives-25-... 2000, launched ads: https://en.m.wikipedia.org/wiki/Google_Ads https://en.m.wikipedia.org/wiki/Google_Ads 2001, profitable: https://www.theguardian.com/technology/2001/aug/08/internetnews.searchengines https://www.theguardian.com/technology/2001/aug/08/internetn...