Google has an absolute fetish for making the ratio of profit to employees as large as possible. They will do it at any cost. There is no Google service without horrific customer support. Youtube, Google Fiber, Google Fi, doesn't matter. They refuse to accept that having 2x as many customers requires 2x as many support personnel.
I’m a big fan of looking at annual reports to understand a company.
Google is not subtle about where its priorities lie. There is a section in their 10-K titled “How we make money” and the two sub-bullets are “Performance advertising” and “Brand advertising”. The rest is a footnote.
Their revenue breakdown tells a similar story. Google as a whole had revenues of $161B in 2019, and $134B of that was direct revenue from from ad sales. “Other bets” (inclusive of consumer product things like Fiber, Fi, etc) is less than $1B — a rounding error in the scope of their overall business.
I know it’s flippant to say “you’re not the customer, you’re the product” but it’s particularly true in the case of Google. They are a B2B advertising company, not a B2C products company. It’s just not part of their business model to provide support to anyone who isn’t an ad buyer. It honestly ends up thwarting their ambitions in the product space because the kind of customer support required to succeed just isn’t in their DNA.
Does this mean that Google is basically using all their services like Stadia or Fiber to keep people's minds aware of their presence, essentially using these services as their own advertisement outreach while hoping they also return a profit on their own advertisement?
They're using those services to "grab eyeballs" and collect data for advertising. You don't need a ton of users to get enough data about a market via sampling. Stadia is pretty new but I don't see it sticking around for the long haul. Amazon (Twitch) and Microsoft are in a much better position in that market.
Fiber has been effectively cancelled; Google has been shopping it around to various telecoms since 2017 but because it's an overlay network and it's not very large, nobody wants the headache of trying to integrate it. Fiber was always an attempt to push broadband providers to update their networks to better support YouTube; Google was never going to throw down the $100B that it would have taken to be competitive. It was never designed for long-term viability because it didn't need to be to serve its purpose.
Or as other vectors for advertising. Stadia store sells ad space to game companies. Google Home is a speaker capable of playing ads (or more subtly giving paid-for answers to questions) etc.
Yup, it's amazing, the number of places they can sell ad space, or use to collect data to improve targeting. The games you play and the platforms you play them on will definitely help fine tune ad targeting. It's just Google clawing deeper into your personal life.
And I hate to admit, they're doing great. I recently tried some different search engines (DDG among others) and they just never give me results as accurate as Google does.
They're also a recruitment tool. It's much easier to convince people to join Google with the promise of working on cool new tech, instead of just micro-hyper-optimizing endless facets of ad placement.
Aren't YouTube's customers the advertisers paying to have their ads displayed? YouTubers are not customers. At best, I believe they are "partners" (like with Twitch)
I'm not sure about that. It's pretty common knowledge that YouTube isn't the endgame for a lot of content creators. If instead, YouTube supported their users more (especially the larger ones) they would have potential to be in the loop for other services like livestreaming, merch, and donations instead of having creators resort to using services like Twitch, Squarespace, and Patreon.
The overlap between Twitch-able content and Youtube-able content is rather small, and the Twitch audience is much smaller (and different) than Youtube's audience.
Patreon and Squarespace are not competitors to Youtube, they're in completely different races.
There is no real competition to Youtube when it comes to UX (specially loading speeds and availability of different resolutions) just due to the sheer number of CDNs and server infrastructure that Youtube has. Youtubers can complain and complain (sometimes rightfully), but 99% of them are not willing to abandon the platform, because that's equivalent to abandoning their online career altogether.
The revenue of Twitch [0], Squarespace [1] and Patreon [2] combined pales in comparison to that of YouTube [3].
The revenue potential in the advertising space cannot be underestimated. Merch has high fixed costs and does not scale dynamically. Live-streaming is inaccessible for both streamers and viewers (in comparison to YouTube videos). Donation fees aren’t a secure revenue source. Either the donators or the creators could turn off donations at any time. But ads are guaranteed. There’s so much to the ad space that isn’t publicly known; Google’s operating on a whole‘nother level.
It’s also a lot more complicated to start ten $300 million projects than to optimize one $3 billion project. The people steering the ship (CEO, CFO, CTO, ...) only have so much time and brain power. They could delegate projects to others, but that requires hiring the right people and that’s really hard. If you have 4 layers of accounting management, and the probability of a bad hire is 25%, the chance of each layer being managed well is only 32%. Whereas if you have only one or a few big projects, you can have less layers, so the probability of success increases all round.
(You might say that Google should do all these projects so can diversify. But why should they take the risk? There are thousands of startups out there testing the waters. They can just acquire those when they show promise. If those startups fail, Google loses nothing.)
(The claims in this comment are educated guesses from reading a lot of articles. I definitely haven’t run a $300 million project!)
Support scales linearly only if you don’t do anything to work smarter. Maybe your product sucks so much that every customer needs to interact with support to get things to work. Maybe you don’t have the right resources for customers to self solve. Hiring your way out of a support problem rarely ends well.
Funny thing is, support scales nonlinearly only while you're fixing those problems. At both ends of the spectrum it goes linear again. If you've done nothing it's linear, and after you've done everything possible it's also linear. Google is convinced the number of required personnel is zero and in any situation it isn't zero it isn't their problem.
As an exercise, please do a back of an envelope calculation and estimate costs and features of a good (feel free to use your own definition) customer service for a mainstream video streaming platform with users ranging from 3 to 99.
You have:
- 2 billion monthly active users
- 73% of US adults
- The most-downloaded iOS app in 2018
- As of December 2018, installed on 5 billion Android devices
They will in the next step if you thing through your idea.
Let's put a number on the complaint-review-hours with the current stats.
A human can do X cases/hour, but if you have more cases than humans can handle your backlog will start to grow steadily. At this point you either hire more people or start to automate things, after all you don't want a city of people moderating stuff.
So what's your target number and what do you guess the actual number is?
