Ok I have some existing comments I'd love to quote[3] on this sad, sad day for the world, but in the meantime: yes, you are 100% correct that this is small compared to their money printer, and yes, this is "all advertising around the web", including many Google first-party publishers like the homescreen of the Google Search app. This is called Display Advertising, as opposed to Search Advertising.

Its still a massive business that they make way too high of a margin on through some truly brazen monopoly tactics[1], so the takeaway there is fundamentally twofold:

1. Google's money printer is so much bigger than one can really even fathom. When you're searching, you have intentionality already; for this reason search ads are less like a new type of billboard, and more like a technology that replaces the racks at Macy's every time you walk in, depending on who bid the most for you in particular based on what you're there to buy.

One consequence we don't think about enough is the crazy levels of innovation that Google has gifted the world for free, from Gmail to Google Maps to Android (all problematic in various ways, sure, but still incredibly expensive products to make that we get for free). They don't do that because they're some weird company who likes giving away stuff -- they do that because that's rational behavior when you own a money printer.

2. Display ads are becoming more and more desparate as our online culture spurns them more and more. It's perhaps not obvious that this business is why they care about gathering your data -- specifically, because personalized Display Ads on the internet are so relatively inneffective at this point that they need the boost.

I'm honestly guessing that Sundar is sad about this decision, TBH; splitting off the whole "buy side" of their display ads business would win them pity for the next few decades from regulators, and it's just so clearly doomed, IMHO. Ads increase, blockers increase, paywalls increase, scrapers increase, ads increase, on and on...

e.g., to pull a random old quote:

  Meanwhile, the economic engine that powers the long tail of the open internet — Google AdSense — has been quietly shrinking. The “Google Network” (which includes AdSense and AdMob) once represented around 20% of Alphabet’s revenue. At this pace, by the end of 2026, it could be less than 5%, with AdSense (web) potentially representing half of that. In Q3 2024, for example, Google Network revenues declined to about $7.7 billion — less than 8% of Alphabet’s $76.7 billion total revenue — continuing a steady multiyear slide.[2]

TL;DR: On Google's brand new, gorgeous Ads campus right up against the San Francisco Bay, giant signs were put up with "Powering the free and open internet," apparently an old informal motto from the AdSense days. I just can't help but think about that sign, today. I wonder what the people working there feel, now that it's mostly just powering the scammy mobile gaming market.

[1]: Super basically, , they've spent insane sums of money to stay as the middle man for the split-second auctions that determine what to put on the Macy's shelves. This makes them some money directly, but it makes them way more money by unfairly propping up their own advertising companies, which are competetive customers of Google's own marketplace.[3] The details get boring, but I think it's obvious why running a fundamentally-opaque auction in which you are a participant creates perverse incentives.

Technically they run the automated marketplace that lives below the marketplaces that the advertisers and publishers work with directly, if that makes more sense.

[2]: https://www.thecurrent.com/opinion/opinion-andrew-eifler-vp-...

[3]: Some goats rants from previous stages of my DABDA process, if anyone is curious:

- From day 1 of this trial: https://news.ycombinator.com/item?id=41496923, and w/ some links: https://news.ycombinator.com/item?id=41496968, on a particularly damning memo: https://news.ycombinator.com/item?id=41497424, and my honest best attempt to characterize the exchange itself: https://news.ycombinator.com/item?id=41501491

For clarity: I'm just some fool, and there is absolutely 0 inside information I can/would share in any of the above.

Google avoids a breakup of its ad tech business