Google Fiber Lays Off 9%, “Pauses” Expansion, as Alphabet Cracks Down on Costs, Division CEOs Quit

Third CEO of an Alphabet division to leave since June.

Five years ago, when Google announced that it would build a super-high-speed fiber-optic network in Kansas City, and then roll it out in other cities, it started an effort to own and control the data pipelines going into homes and businesses.

Given how frustrated consumers are with their ISPs, it seems people couldn’t wait for Google Fiber, now operated by Alphabet’s Access. Google then spent a fortune building out the network in select cities around the country. This could have been huge. At a huge cost.

“Amazing bet,” is what Craig Barratt, senior VP at Alphabet and CEO of Access, called Google Fiber in a blogpost yesterday. In the same breath, he also announced that they would “pause” the build-out of Google Fiber in cities where it had been planned, that there would be layoffs and reassignments, though he didn’t say how many, and that he’d “step aside” as CEO of Access.

His replacement has not been announced.

He’s the third CEO of an Alphabet division to part ways since June. He prefaced this whole debacle this way:

And thanks to the hard work of everyone on the Access team, our business is solid: our subscriber base and revenue are growing quickly, and we expect that growth to continue. I am extremely proud of what we’ve built together in five short years.

Google Fiber is one of two big entities in “Other Bets” of the Alphabet empire, whose CEO Larry Page and new-ish CFO Ruth Porat are trying to crack down on ballooning costs.

The other big entity in “Other Bets” is Nest Labs, which makes internet-connected thermostats and the like. In a brilliant move, Google had acquired it in 2014 for a breath-taking $3.2 billion. But by now, this move has become very unbrilliant.

In June, Tony Fadell, Nest co-founder and CEO, quit after internal disputes over this focus on spending. Some key Nest employees moved to Google’s new hardware division. And the entity is in turmoil.

In August, Bill Maris, CEO of Google’s venture capital arm, GV, also left.

Earlier this year, Alphabet got second thoughts about its ambitious robotics efforts and put Boston Dynamics up for sale. It had acquired the experimental robot maker in 2013 for $500 million. But tensions soon arose, and co-founder Andy Rubin bailed out in 2014. No deal yet.

Then there was, infamously, Google Glass….

So Google Fiber is in good company. It will cease efforts to install a fiber network in 10 cities where it had been planned but not fully committed, according to Ars Technica. In addition, San Francisco was supposed to get Google fiber for sure, but that has now been cancelled too.

The 11 cities where Google Fiber has been nixed: Chicago, Dallas, Jacksonville, Los Angeles, Oklahoma City, Phoenix, Portland, San Diego, San Francisco, San Jose, and Tampa.

In “this handful of cities” and also “in certain related areas of our supporting operations, we’ll be reducing our employee base,” Barratt wrote. Hence the layoffs.

Google Fiber has already been rolled out in Atlanta, Austin, Charlotte, Kansas City (Missouri and Kansas), Nashville, Provo (Utah), Salt Lake City, and The Triangle (North Carolina). And it’s still publicly committed to building the network – subject to change, I suppose – in Huntsville (Alabama), Irvine (California), San Antonio, and Louisville.

In June, Google Fiber announced that it would acquire Webpass, a 13-year-old company that provides high-speed wireless internet in Boston, Chicago, Miami, San Diego, Oakland, and San Francisco. A wireless network is a lot cheaper to install in urban areas with multi-family housing than fiber-to-the-home.

About 9% of the employees at Access will lose their jobs, though some people could be reassigned to entities of Alphabet, according to Ars Technica:

The source did not say exactly how many employees that percentage represents. Access includes more than just Google Fiber, so the percentage of Google Fiber employees being laid off or reassigned is probably a little higher.

Alphabet headcounts are hard to come by, but this Bloomberg report says Access has about 1,500 employees. The Information report indicates that Google Fiber had about 1,000 employees before the layoffs. If both of those numbers are accurate, then the percentage of Google Fiber employees being laid off or reassigned to other parts of Alphabet might be around 13.5 percent.

Google Fiber apparently has not hit its subscriber goals, and fiber construction is a costly endeavor. While the company isn’t giving up on fiber entirely, it may be able to deploy Internet service at a lower cost using wireless technology.

“It’s billions of dollars a year just to maintain this stuff, and Google doesn’t want to spend that kind of money on just being another player in that market,” Jan Dawson, an analyst with Jackdaw Research, told Bloomberg.

“I think the new CFO put an end to the experiment that wasn’t really going anywhere,” Chetan Sharma, an independent wireless industry analyst, told Bloomberg.

So serving up digital ads is still Alphabet’s main business, and flourishing. Controlling the high-speed pipeline to get these ads into homes and businesses, and grabbing whatever data can be grabbed by ISPs via deep-packet inspection and other methods still seems to be  part of the plan, but now through cheaper and less glamorous wireless services and no longer through the holy grail of data pipelines, optical fiber. And so goes another huge dream to diversity away from advertising.

Even the absolute master of marketing, Apple, is running into trouble with its latest product. Read… Smartwatch is Dead, Market Implodes, Apple Watch Shipments Collapse

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  65 comments for “Google Fiber Lays Off 9%, “Pauses” Expansion, as Alphabet Cracks Down on Costs, Division CEOs Quit

  1. Justme says:

    Highly interesting. Google is finding out the hard way that being an ISP and building broadband infrastructure is not at all easy when all the “telephone” poles are already weighed down with cables from Comcast+Charter and AT&T (or whatever is the local phone company).

  2. Paul says:

    Google’s time is done. It is just a matter of time until someone who understands advertising and knows how to talk to vendors and customers puts them under.

    Today it would take about $50 million for a well run start up to destroy Google in less than 6 months.

    Remember one thing if you are a small business person, Google is 100% responsible for the drastic fall off and destruction of small business in the U.S. They are solely responsible for the inability of small business to create jobs. Google has done more to destroy business in the US than our current left wing socialist Progressives who run the country

    • Markar says:

      “Google is 100% responsible for the drastic fall off and destruction of small business in the U.S.”

      I think Obamacare and the Fed could give them a run for their money on that score.

    • Roy says:

      I’d say Google is more like 40% responsible for the death of small business in America…

      Amazon picked up the baton from Walmart and stuck the knife at least 60% of the way in for retail.

      Of course this is gross oversimplification, there are lots of other minor players. But, the real perpetrator is Americans’ short-sightedness and greed (or, not understanding that the extra $5 you pay for a hammer at the local hardware store instead of Amazon pays towards lots of employment, a lively neighborhood, and a better-functioning society).

      Conservatives say manufacturing in America is dead (they’re wrong, it’s dying not yet dead). Neoliberals say we need to replace those jobs with the service industry. But what happens when the tech elite kill off all the service jobs?

      • polecat says:

        “Game Over Man …game Over !!”

        “Hey ! Why don’t you put HER in charger !!”

      • Tom Kauser says:

        My big blue box employer has sunk 50% of net income for perhaps a decade to employ 150k (to start) computer wizards who have worked fantastically to compress our bottom line. (Margin flattening army)
        We have also made available a service which is side door hands off and ties up a perfectly good cashier ALL DAY!
        Praise be to Yellen (more important to Walmart than Hillary) and the quarter point kabuki!
        Houston…… Houston…. Houston……!

    • economicminor says:

      I would like to hear more on this subject. Exactly what have they done to destroy small businesses? How have they hindered small businesses from creating jobs?

      I’m not saying they haven’t. I just haven’t personally recognized this.

      • Tom Kauser says:

        You open your watch pay online and enjoy dinner as your personal drone speeds deserts from across the city.
        Zero% markup as the owner of the service lives off the companies success and takes nothing from actual business?
        You have a wonderful time and next morning you buy 1000 in the money calls of xyz (as you buy a new drone and have a drone deliver it later that day?)

    • a false profit says:

      You have no clue what you are talking about. Stop spouting nonsensical “facts” using absurd numbers. Google is destroying business? Do you know how many small businesses are only profitable via Google advertising or YouTube ? Do you realize how many small businesses can only bootstrap due to the low cost of Google cloud services?

      Seriously. Stop with the stupid assertions.

      btw, I am not a fan of Google. But, your statements are moronic.

      • nick kelly says:

        If you analyze and classify the comments you will find that a least half. possibly a majority want to blame an evil ‘they’ or ‘it’ for pretty much everything. This is indicative of a psychological bias rather than objective evidence.
        Some of it is borderline clinical paranoia- some good old anti- Jewish religion. The Rothschilds started WWI and WWII for the profits etc.
        Or the secret cabal operating from their ultra- secret headquarters inside Germany.
        You’ve got to hand it to those guys- imagine plotting the downfall of Germany from inside Germany!
        Although you’d never know this from TV, movies etc. the Gestapo
        was actually very efficient at rolling up internal enemies. They got most French Resistance networks.

        Little memo from basic philosophy or logic of language, courtesy Karl Popper: a proposition has to be falsifiable to be have meaning. In other words, suppose there wasn’t a secret cabal running the world. If there is no way to verify that, to disprove the existence of the cabal, then the assertion that it exists is meaningless, or if you prefer, religious.
        This is why predictions without a time limit are meaningless. To say that ‘California will slide into the sea’ can never be dis-proven and is therefore meaningless.
        This half- century old (at least) methodology has begun to penetrate the world of financial predictions. If the guest says that ‘QE is over’, the interviewer may say: ‘what would have to happen for you to change your mind?’
        If the guest says that nothing could make him change his mind- then he is not making an empirical or scientific or even rational statement. In this case it’s easy to see because that statement would be absurd- but if someone says there is nothing that could convince them that the government is NOT spraying chemicals on us (and foolishly doing it during daylight!) then they do not have a scientific belief, they have a religious belief.

        So if we fail to find the ultra-secret head quarters, no matter how hard we look, this won’t prove anything to the true believer, except that they ARE ultra-secret.

  3. Dan Romig says:

    Optical fibre is indeed the holy grail of data transmission. Minnetonka MN based US Internet is rolling out fibre optic service in Minneapolis by direct connection into homes via underground cables from the street.

    They have different prices based on data speeds: 1 Gbps @ $65 per month, 250 Mbps @ $50, 100 Mbps @ $40 and 25 Mbps @ $30.

    It was expected to be available in my neighborhood this summer, but the bureaucrats in the Minneapolis Park Board would not allow US Internet to install lines underneath the Minnehaha creek. Where it has been installed, it is outstanding in both value and performance. This spring or summer I will be able to (finally) leave copper wire behind and join the 21st century.

    Photons will eventually replace electrons in many applications, and there’s a company in Brooklyn Park MN, Clearfield, Inc., that has been working on this since 2008. Ticker symbol is CLFD – yes, I own few shares.

    • economicminor says:

      Fiber may be the holy grail but wireless is much more practical. Fiber to the wireless hubs to my mind makes the most sense as few actually need 100 Mbps.. Most people really only need 10 or less..

    • Pangloss says:

      Why it took Google billions of dollars and years of effort to recognize that the investment in ‘atoms’ to carry ‘photons’ was always going to be a dead-end with endless fixed maintenance costs compared with the continuing throughput gains from pushing ‘electrons’ through the air continues to mystify. Didn’t they notice when Verizon FIOS build-outs slowed to a crawl? Anybody betting against the children of Ma Bell is in the wrong casino.

  4. Meme Imfurst says:

    Does this mean I won’t be able to buy, buy, buy on Amazon and have it delivered yesterday?

    Finally after 20 years of dial up we got medium slow speed internet and the flood of crap and Google spam is NOT worth the cost to have that access. NOW it is even showing up in my email, how…..ask Google spying invasive software which had no interest in poky old dial up. Stalking, plain old fashion illegal STALKING is something to be proud of…right.

    I remind everyone that the internet is an American invention and was funded by tax payers to be a free access highway. That Google, Comcast, ATT, and the rest sit on public owned poles and pay nothing for that privilege, is just another screw job by corporations with the permission of politicians. We are all idiots and pay to be one too.

    Google is another example of loose free money looking for a new way to make the wheel round. That car didn’t work out so well either, nor the refrigerator that tells me on my phone how white my milk should be.

    • walter map says:

      “Google is another example of loose free money looking for a new way to make the wheel round. That car didn’t work out so well either, nor the refrigerator that tells me on my phone how white my milk should be.”

      You’d think these guys would be smart enough to tell the difference between a promising gimmick and a lame one, but apparently it can be exceedingly difficult to predict which cheesy inspiration might be the next to succeed.

      My guess is that a lot of it involves throwing stuff at the wall to see what sticks. Access didn’t stick, and so far they just haven’t figured out how to rework it to make it more adhesive.

    • aldo says:

      nice ending & very insightful = many thanks!

    • Mike G says:

      “But he can’t be a man ’cause he doesn’t have as fast broadband as me.”

    • Point of fact :

      Not all of the “poles” are publicly owned. In my neighborhood, when I go for walks, I can see the special numbers, and other identifiers, placed on the poles by the owners. So the DPW can contact the owners in case of accidents or other maladies.

      I see a lot of poles owned by a large electric utility nearby – – which then rents wire-space to Comcast, Verizon and a local cable company.

      I do not know how many poles are publicly owned versus privately owned. If I were a gambling man, I’d bet most are privately owned. But I dunno for sure.


    • AT&T is denying GOOGLE access to its privately-owned utility poles in Austin :

      And this next link gives some insight as to what might be the final word on the topic ( the FCC ) :

      I worked for medium-sized electric utility a coupla decades ago, and learned all about the “holes and poles” – – – “holes” meaning the underground electric wire ducts in large cities . The underground holes are what explode their caps upward in large cities on extremely hot days – – when the underground ducts and transformers have their capacity exceeded by a lot.

      It was a topic I had thought little about before taking the job. Some electric utilities have owned their “holes & poles” since the late 1800s, and may not think kindly about your giving away their property rights to young upstarts like GOOGLE.


      • Dan Romig says:

        Yes sir. And in many cities, the PUC has either ceded control away, or ‘sold’ in years past.

        That is one of the draws to US Internet fibre vs CenturyLink. Hell, I want to do business with the company laying down both the financial and physical hardware to connect. I have copper connections ready to go with both Comcast and CenturyLink, but they’re hung off the utility pole in the alley. This has worked as a cartel to suppress competition, and the MPLS Park Board is part of the ‘fix is in’ trying to continue the oligopoly.

  5. walter map says:

    I’m sure leftists are to blame somehow. Darn that Bernie.

    • Terry says:

      Today Google announced layoffs. Folks, these layoffs come because the failed policy of my predecessor- Barack Obama

  6. Kasadour says:

    So serving up digital ads is still Alphabet’s main business, and flourishing.

    What are the real conversion rates of these digital ads? A million eyeballs X 0 is still 0. Ad budget managers are realizing this now.

    • Petunia says:

      Most digital ads are a waste of money and potentially dangerous for the advertisers. All the ads I see are for products I searched for, for one reason or another. Some of the items I did buy, but I was interested in buying the item before I started getting the ad. The ads are sent continuously for items I already own or am no longer interested in. I blame the advertisers for not having better controls over their ad dollars.

      How much AI is involved in sending a user an ad for a product they have already inquired about? NONE. For those of you who think they are doing all this fancy algorithmic stuff to deliver ads, all I can say is who do you believe, them or your lying eyes.

      Digital ads are also dangerous for companies buying them because they can be used to financially harm the company. If you don’t like company X, clicking on their ad and going thru to their web site costs them money. It is easy to whip up a concerted effort to financially harm company X, especially by competitors.

      • Chicken says:

        The ironic thing perhaps is it’s difficult to implement AI (voo-doo gimmick) over slow internet?

      • Meme Imfurst says:

        well…..LETS CLICK ON WELLS FARGO !!!!!

        Do it for Wolf !

  7. bead says:

    Someday I expect advertisers will wake up and realize they’ve wasted their money. Maybe once a year I will click a Google ad. Amazon suggestions which are the gold standard of big data brilliance (AI, oh yeah) are laughable, sort of plausible for an uncomprehending algorithm but of no use whatever to a discriminating buyer. Maybe the real wizards are at Facebook but I haven’t used that in years.

    • Petunia says:

      All of these companies are derivatives of older technologies. None of them do anything new. They are simply applying old software to new environments.

      In defense of Amazon, at least they suggest things you haven’t looked at before, and they do have their other sales to data mine.

  8. TheBallAlwaysKeepsMoving says:

    Hold on ‘fiber-optics fans’. Maybe this ‘writing-on-the-wall’ had something to do with it!

    • walter map says:

      Great. Now I can get ads in 1/100 second instead of 1/2 second. And to think some people insist there is no such thing as progress.

      • Wolf Richter says:

        Nope. You can’t. That’s the tragedy :-)

        What’s slowing down the ads is the bidding process of the ad exchange (such as Google Adsense), the data mining that takes place on your machine (browser) before the ads are even bid, and the installation time required to get all this stuff to run in your browser – without crashing it … among other things.

        I don’t think you’d notice a difference between 3 Mbit/s (basic cable speed) and 1 Gbit/s except when you download or stream high-def video.

        • walter map says:

          Have I ever mentioned how excellent adaptive ad blocking software is?

          It blocks ads on the web pages you visit. Ads from services like Google AdSense, Yahoo or DoubleClick won’t bother you anymore. It also blocks the GoogleAnalytics tracking script . . .

          I haven’t gotten any spam, telemarketing calls, or junk mail in years, and there aren’t many billboards this far out. Life is good.

        • Wolf Richter says:

          I totally get this. But wait… how am I supposed to make a living if you block the ads on WOLF STREET?

          Oh, there’s always the how to donate tab… :-)

        • d says:

          You run a SMALL advertorial segment in each page TXT, so every page click becomes, an add click.

          As long as it is SMALL people will keep on coming.

          I understand you need to make money.

          The average web page today simply has too much moving crap that hurts my eyes and gobbles data. I dont block it, there is no room on my screen for the content.

        • It's all good says:

          Regarding Wolf’s ads. Here is what I do, although I am not suggesting this for others.. Do searches for Viagra and other drugs. After a while, Google will start serving ads for Viagra. Go to a browser with no ad blocker, I use Firefox, then click on those drug ads. It serves two good things. Drug companies lose a little money, and the website provider makes some money.

        • Wolf Richter says:

          I think I have WS set up to where it blocks Viagra ads (and similar products and services).


        • walter map says:

          That’s the beauty of my software, Mr. Richter: your site still gets credit for the ad view, but it doesn’t get displayed. Everybody wins – except the retailer, but I wasn’t going to buy anything anyway.

          I didn’t come up with the Paradox of Thrift myself, although I suppose I could be chastised for overusing it.

  9. Ed says:

    I can certainly imagine the trouble you’re asking for with an internet connected thermostat.

    • walter map says:

      You wouldn’t want your light bulbs or your toothbrush spying on you. That would be bad. Not sure how you could avoid it, though.

  10. Mike R. says:

    Google fiber is preparing to dig in my front yard as I read this article. The first neighborhoods in Charlotte were pretty messy and so far, contractors for Google have racked up 1/2 million in repair costs by the providers (city water, gas lines, AT&T, etc.). Interestingly none of the contractors working for Google have paid any of these charges yet and probably won’t. The taxpayer will end up getting stuck with it.

    When Google announced a year or so back, the City elders fell all over themselves welcoming this new tech breakthrough. They touted an internet speed/capacity enough to download the human genome (or some such nonsense) in seconds to each house. WHO NEEDS THIS KIND OF SPEED?
    And they granted city locations for Google to build out hub houses for the network at $1/year leases. And of course Google hired a black professional woman who made the rounds promising how Google would serve underprivelaged areas; not just high end neighborhoods. So far, all they’ve built out is higher end neighborhoods.

    I have little intention of using their service unless it is markedly cheaper than my cable internet. We don’t give a rat’s ass about content as there is no such thing as good content anymore. We watch movies and read.

    Google is one slick operator but this 3rd internet service in our neighbohood makes little sense. When they deregulated AT&T and Bells co’s, all the talk was about how much cheaper things would be under deregulation. The only people that made out with that decision were the lawyers and MBAs that mastermiinded and profited from the whole sorid affair. With a regulated utility supplying internet (and only one), we could have top service, high speed and the cost would be under 30/month, I’m convinced. Instead, we have crappy providers, poor maintenance and 50-60/month fees just for internet.

    • Petunia says:

      I have to disagree with your assessment that a monopoly will give you the best available tech. The reason ATT was broken up was because they had the technology for mobile and fiber for decades and just sat on it, because the expense of deploying it would cut their profits. There was also the issue with the unions. No union would jeopardize the jobs they had, for the ones that could materialize from the new technologies. The ATT breakup is what brought you cell phones and high speed internet.

      • Mike R. says:

        I should clarify as my history on the phone company is foggy. I believe the break up of AT&T into Bell Companies made sense but I believe for awhile the Bell Companies were still regulated like the power utilities. I thought that system worked pretty well.

        Regarding internet, I don’t think keeping the Bell Co’s regulated would have stopped that in the least. The cable companies were providing that and in my opinion, they should have been given full control with strong regulatory oversight.

        Regarding wireless, yes that was destined to put major pressure on the wire phone companies and I can see where they would have lobbied against. However, they could have been given the charter to go wireless by the government and then managed as a regulated utility by region.

        There is nothing necessarily better in unregulated when it comes to utility type functions, in my opinion. Faster development? Probably but look at the problems and complexity we’ve ended up with. Better price? Highly debatable when all the competitors have to build their own infrastructure.

        I worked in the power utility business for almost 30 years and saw it go from regulated, to going to be deregulated, to somewhat deregulated to huge comglomerated companies that are still regulated by each state. Service has suffered and price is not better, if not worse. Again, the people that make out in these make believe claims on unregulated is better are the lawyers, MBAs and executive employees with their huge salaries.

        One final thing. Wireless communication is not everything we think it is. When I weigh many of the negatives that have and are occuring to our society, I am not convinced that widespread application is all that beneficial. There are some aspects of the internet that fall into this as well; however, the one overriding aspect of public expression/communication (like this blog) may trump all the downsides; not sure. Certainly, the internet pretty much creamed the newspaper business which was a pretty healthy attribute for a functioning democracy. So there are lots of pros and cons; it’s not all pros.

        • Petunia says:

          The overriding point I was trying to make was that ATT wasn’t going to spend a penny pursuing any new business because it was happy with its profit margin. They had to bust up the company to force out the new technologies. They could have gone wireless in the 60’s but didn’t. The bust up also helped high speed internet providers because dial up was so expensive consumers looked around and went to cable. My first tech job was consulting to the telephone companies.

      • kitten lopez says:

        (wow…there you go AGAIN)

    • MC says:

      “Who needs this kind of speed?”

      My brother and my attorney, apparently, as they always bemoan about download and upload speed.

      Joking aside, I am actually surprised Google contractors have done so little damage. A nearby small town which was picked to pioneer fiber in “economic failure zones” (is that banjo music I am hearing?) has racked up far more than than half million in damages to roads alone as the resurfacing carried out by the fiber company’s contractors started sinking in after a week. Or perhaps this is due to the fact we have the highest road repair costs in Europe (resurfacing 1km of road costs 40% more than in France which has very similar labor costs, taxes etc)?

      Regardless, it would be intriguing to know how Google/Alphabet picked the cities for their fiber project. I suspect city elders falling all over themselves have something to do with it.
      Companies pitching grandiose engineering projects seem to need city/town governments both gullible and pigheaded enough. It’s not a rare combination to find in local politics but a company with Google’s resources can find the “best” for their money.

  11. Maximus Minimus says:

    Alphabet/Google simply realized that where there is competition, they cannot compete.

  12. Ptb says:

    Goog is still all about eye balls. And that’s really the whole industry as it’s mostly built on a foundation of free viewers. So ads are your monetizing event in this model. They just want to capture as much eye ball time as possible. When they take their eye off this ball (ha ha) , they start to get I trouble.

    I think these strategies they pursue are all abstractions of capturing eye balls. Some are much more incredible than others. I’ve been to their main campus and they love to spend money. Like all huge technical success stories, they’re desperate to find the next big revenue generator and/or monopolize more of what made them their money.

  13. KHS71 says:

    We have Google here in Kansas City. They were at least a year behind schedule from when it was supposed to be installed until it was finally finished. I could care less about the speed. G-mail is nothing spectacular. The channels they offer are not anything special, mostly sports and music channels, and the remote is difficult to use. I have to turn it around to change channels. Does not fit in the hand very well but that could be just me. Dish had a better selection but it went out every time it rained. The internet has gone out a few times but that is not unusual. They had to come out and fix it one time and we received a $25 deduct off our bill. Google is $127 per month for tv and internet. About $30 less that the combined Dish and Roadrunner services. Nothing to write home about. Over all I would give it a “C”.

  14. Fabulous says:

    As a small business owner, I recently tried to advertise my business on Google adwords. I did keyword research and set my campaign to bid at the rates they suggested in their report. I even increased my bid to $5 per click, and my ad never went to the top of the page. Neither did any of the other people who were advertising for my keywords. It made me wonder what price I would have to pay to be at the top? I finally shut down my campaign in disgust. If my ad is only shown at the bottom of the page, that is not worthwhile for me.

    A friend of mine is an electrician. He said the whole first page for electricians is filled with Google ads, there are no organic results on the first page. SEO is dead. They also put Places results at the top of the page. You can sign up for that, but I don’t know how you would show up at the top of that.

    What they are basically doing is not only screwing the little guy by charging outrageous prices for clicks, but making it so advertisers just seek alternate ways to promote their business.

    I have also noticed lately that I am getting search results in French, German, Portuguese, etc. I have no idea what their problem is, but they should go back to their core business and get that fixed.

    I bought a new domain and a week later I was not at the top of search results for the exact name of my business. They penalize you if you use any keywords in your domain. This is local business mind you, not national. I had to buy a domain that did not have any keywords in it to show up for my domain name in a couple of days.

    • Wolf Richter says:

      Did people click on your ads? In other words, did you have to pay, or did you simply not get any action at all, but didn’t have to pay either?

      The complaint I hear from advertisers I know: they get some clicks and pay a lot for them but there is no action afterwards (no signup, conversion, sales, etc).

      • Fabulous says:

        I got two clicks, and no calls. I had called them to get help setting my ad up. I had previously tried to advertise with them and they would re-activate my ad campaign if I just signed into my account to do keyword research. I think it is a scam they have. I never clicked on anything to activate it. You think they would make enough money that they don’t have to screw the little guy!

        • Ptb says:

          Interesting. A friend had a small horse boarding business about 6 years back and she claimed Google really helped drive business. Maybe it’s played out?or they’ve gotten so greedy that it’s not worth it?

          I know that when I search on Google, I usually start a couple pages back in the hopes that I’m getting a somewhat unbiased result. But maybe I’m just kidding myself?

        • Fabulous says:

          Yes, a friend of mine built a good business on adwords. She only paid $200 per month. I think it would cost a lot more now. Theoretically the adwords should work. I do think the bids they quote are kind of a scam. If they say a keyword should be bid at $3 and you bid $5, why are you not at the top of the page?

          Some people just got lucky and show up at the top of Google places. They get all the clicks and don’t even know why.

        • Wolf Richter says:

          There is a lot of dirty stuff going on out there (including “click fraud” – at least you didn’t get hit by that). Often, advertisers and publishers both get screwed. It’s what happens in the layers between the two where the money gets siphoned out.

          Google I think is the cleanest dirty shirt out there. To their credit, they try hard to tamp down on fraud. But they have ways of driving everyone nuts too.

      • ML says:

        The sort of complaint is the difference between advertising and marketing.

        I appreciate that ads on a site can provide some income for the site owner but unless the ads are relevant to the target market that the site is for they are unlikely to be of interest to the site visitors.

        My website comprises more than 500 pages (so I am told: to me it just has a lot of content). There are no ads, no cookies that I have put on it, no log in no password, no registration, hardly any images/photos. I sort of understand SEO but I got to and stay at the first or almost the top 3 results of a search simply by using my own skills at marketing. One of my competitors spends a fortune on ad clicks or whatever to maintain top slot but I am usually always there right behind free of charge. And with a steady conversion rate. For enquiries that I reckon would be unprofitable if I were to take on the work I recommend the inquirer go to the competitor!

    • Petunia says:

      I read somewhere that their auction rejects the highest and lowest bids and takes the second highest as the top pick. Their rational is that that keeps the big companies from always getting the top spot.

  15. NotSoSure says:

    Party over? Wouldn’t call a 20% increase of revenue to anything close to over.

    I just really want to know who’s clicking those ads?

    • Wolf Richter says:

      Google’s ad business is doing well. That’s about the only big thing that is doing well. Lots of people click on ads for all kinds of things. People say they ignore ads, and then they end up clicking on them if they see something that interests them. And they end up buying stuff too. Advertising is not all wasted money.

      • NotSoSure says:

        I understand that some people will click on ads. That’s inevitable. Now granted with real time bidding, not all ads are priced the same, but are the same number of people clicking 10% more ads?

        • Wolf Richter says:

          The massive amount of uncertainty comes from “click fraud.” Once that is excluded from the equation, I think – and I have facts to prove this – that some people click a lot more than others. I would say a much higher percentage (than 10%) of people at least occasionally click on ads.

          Even I, an avowed non-clicker, have clicked on ads when something really interested me. And when it takes me to an interesting product or service, it’s a good experience.

          If it’s just click-bait, I hate it.

    • Ozymandias says:

      I have gone to as a search engine and just don’t get a lot of ads that I used to. I don’t really know how this stuff works.

  16. Chicken says:

    ” The taxpayer will end up getting stuck with it”. – This is a winning business plan!

    Summoning VIAGRA ! :)

  17. Bob W. says:

    They installed it here in my neighborhood in Overland Park this spring. As the fiber was being pulled, they staffed some kiosks set up in local grocery stores with a some youngsters to provide promo material and answer questions. My concern was how they would support the service, since the service with my current provider goes out about once a month. They didn’t know! They surmised that Google probably had contractors on call who would roll trucks if needed, but frankly, they didn’t have a clue. What a marketing strategy. I decided to stick with my 6mbs service for the time being.

  18. Shawn says:

    If it wasn’t for Google’s search business, the companies stock would be firmly in the tank like a lot of other tech giants in the valley. For such an arrogant company that prides itself on their innovating business model and the ingenuity of its employees. The company comes up short on both accounts.

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