6 min read: Why Alphabet Inc. Stock Price Decline Is a Warning to Silicon Valley’s Conscience

economics
money
humane-revenue-model
#1

Okay, so I wasn’t sure which section to post this in, but I wrote a response to Alphabet Inc.'s earnings report, which saw Alphabet revenue decline by >20% in the first quarter.

JP Morgan analysts are putting this down to the update to the algorithm in January 2019, which removed 8.8m videos that violated YouTube’s guidelines.

So why am I posting this here?

Not to brag about the story (although there is a link to the story at the bottom of this post should you so wish to read), but to highlight that the web of “dark dollars” as I’m calling them, is complex, and as companies become more ethical, what are the revenue implications of doing so?

I think this group is the best place to begin to discuss the potential ways that we can incentivise companies to change (through things like PR, long-term loyalty of users, new revenue models, etc.), because they will need clear incentives and upsides to change behaviour on their own accord (on top of regulatory action)

I offer some examples in this particular case for anybody working on the YouTube or Google platform, as well as any investors or users of the platform.

I hope you find it an interesting read: https://medium.com/tidy-minds/why-alphabet-inc-stock-price-decline-is-a-warning-to-silicon-valleys-conscience-38cfb1b5cd13

Many thanks,

Callum

#2

Hi Callum,

I agree that much of Google’s revenue is based off of bad advertising and bad content. I know personally they make a huge deal of money advertising scams and they intentionally make it easy for scammers to distribute their advertising. With their dominant position they could easily change that, but instead because of the way they’ve designed the system they purposefully make it almost impossible to block ads for scams.

There is an error in your post and article. If is false that Alphabet’s revenue declined. In fact Alphabet’s revenue grew by over 15%. What has happened is that Alphabet’s revenue has grown by less than 20%.

#3

Update: there was a syntax error in the story, revenue growth slowed to a rate below 20%, not decline in revenue itself, but a decline in revenue growth.