Andrew Chen Archives

Subscribe · Featured · Recent · The Cold Start Problem 📘
Dear readers, I have moved to Substack and I will be writing here from now on:
In the meantime, I will leave up for posterity. Enjoy!

Google: A tale of two graphs

Google in the nerd echochamber
In Silicon Valley, Google-as-the-giant talk is deafening. As others have noted, startups used to get the question “What are you going to do when Microsoft does this?” and today, it’s “What are you going to do about Google?” I’m generally pretty amazed by the perceived power of Google. As far as I can tell, they are doing extraordinarily well catering to the alpha geek set, and since that’s all of San Francisco, it seems like GMail, Google Maps, and the like are dominating the rest of the market.

So first, a map of Google’s true, dominating power in search:

Google versus Yahoo revenues
Google vs. Yahoo Revenue ($)

But as Matt Pace from Compete noted, they aren’t doing so well after spending $60MM in the checkout program. I’d encourage you to read the whole article.

Google Checkout versus PayPal

It’s definitely quite interesting. And although this data is a year old, it’s interesting how little headway Google made across a bunch of new products, even as they killed Yahoo in search:

In fact, one could argue that ultimately, Google has been extremely productive in 3 specific areas:

  • First, dominating in search
  • Then, dominating in advertising
  • And finally, dominating in PR and “geek cred”

A phantom competitor for Orkut
The last point is critically important – how often do you talk about Orkut or some other minor Google service? In the example of Google’s pathetic attempt at social networking, you should also contrast it to another company’s mastery in the same area. Here’s some fun stats:

  • 100MM unique users per month
  • 2.5 billion photos uploaded total, with 6 million per day
  • 30 markets and 16 languages
  • On top of that, all these stats were for last year

What company is this? Click here to find out :)

Stay rational about high-buzz companies and their actual capabilities
To conclude, the point is that I’ve found myself often disagreeing with the emphasis people place on Google’s competitive chops, and that there seems to be a “brand cult” around them the same as Apple and so on. Now that’s all OK and good, until all of SF falls under the spell, and folks become non-rational about companies due to their relation with Google. Just my 2 cents.

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

Views expressed in “content” (including posts, podcasts, videos) linked on this website or posted in social media and other platforms (collectively, “content distribution outlets”) are my own and are not the views of AH Capital Management, L.L.C. (“a16z”) or its respective affiliates. AH Capital Management is an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply any special skill or training. The posts are not directed to any investors or potential investors, and do not constitute an offer to sell -- or a solicitation of an offer to buy -- any securities, and may not be used or relied upon in evaluating the merits of any investment.

The content should not be construed as or relied upon in any manner as investment, legal, tax, or other advice. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any charts provided here are for informational purposes only, and should not be relied upon when making any investment decision. Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, I have not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. The content speaks only as of the date indicated.

Under no circumstances should any posts or other information provided on this website -- or on associated content distribution outlets -- be construed as an offer soliciting the purchase or sale of any security or interest in any pooled investment vehicle sponsored, discussed, or mentioned by a16z personnel. Nor should it be construed as an offer to provide investment advisory services; an offer to invest in an a16z-managed pooled investment vehicle will be made separately and only by means of the confidential offering documents of the specific pooled investment vehicles -- which should be read in their entirety, and only to those who, among other requirements, meet certain qualifications under federal securities laws. Such investors, defined as accredited investors and qualified purchasers, are generally deemed capable of evaluating the merits and risks of prospective investments and financial matters. There can be no assurances that a16z’s investment objectives will be achieved or investment strategies will be successful. Any investment in a vehicle managed by a16z involves a high degree of risk including the risk that the entire amount invested is lost. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by a16z is available at Excluded from this list are investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets. Past results of Andreessen Horowitz’s investments, pooled investment vehicles, or investment strategies are not necessarily indicative of future results. Please see for additional important information.