Subject: Re: Up about 50% this year
<<If you want to have a good investment return, you will require higher sales per present user.>>
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I would add one small refinement to that: higher sales per present user on a per-share basis.
They do make oceans of profit. It's possible that a lot of this could be used to drop share count a lot.
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The proportionality is what matters here though. What is important is that advertising revenue must grow very considerably over the next decade if investors require a good return. If you don't have a model for how that is possible, then blind hope might not suffice.
It is true that buying back shares allows them to preserve their high margins (this is distinct from diverting earnings into low margin business as Alibaba did for example). However whilst Google is trading at a PE of 30 (an earnings yield of 3.3%) then, by definition, it cannot grow its earnings by more than 3.3% as a maximum bound.

I mentioned that the progress should be measured on a per-share basis purely as a quibble, as it's a firm where the share count isn't a constant.
Buybacks and equity based compensation.

But personally I think the benefit is not even as optimistic as your description might suggest.
They might be able to reduce the share count by 3-4% a year, and earnings per share might consequently rise that much more than otherwise. They might reduce the share count by (say) 40% after many years, important for per-share valuation exercises.
But I doubt their entire buyback program adds much at all to the value of a share, if anything.

For those who don't follow: buybacks affect the value of a continuing share only to the extent that the purchase are done at prices far from true fair value.
If the shares are on average trading at fair value, the value of a continuing share doesn't change at all as a result of buybacks.
In order to do those purchases which increase EPS they're also reducing the company's value by 3-4% of market cap per year using up cash on hand to do the buys.
That cash goes out the door permanently, presumably reducing the company's total value dollar for dollar. It isn't going to continuing shareholders, and isn't any kind of "yield" for them.

As it happens, I think Alphabet's share price is somewhat below true fair value at the moment, so current buybacks are adding value to continuing shares.
But the benefit is probably so small that it's just another quibble: the percentage of shares repurchased (very small) times the percentage of undervaluation (also very small).

Jim