Google making baffling decisions is hardly news these days. The main decision driver at Google is whether that resource/product improves ad revenue. I have a hard time seeing how Google Cloud would drive ad revenue, which likely means leadership at Google doesn't either.

I just wish Google's leadership would stop starting projects (and hiring smart people to develop those projects) when they know the projects will not drive their goal of more ad revenue.

Admitting they're just an ad company would collapse the delusion that drives their share price.

Alphabet trades at a P/E of 27, hardly delusional.

During times of low interest rates, 27 is a reasonable P/E. When interest rates are high, it isn't. A P/E of 25 is a rate of return of 1/25 or 4%. TBills return 5% and are a lot less risky.

The S&P 500 as a whole is trading at a P/E of 24. If there are any delusions about equity valuations they're not specific to Google.

When inflation is 5%, stocks are long term immune due to their price being denominated in the inflating currency. T bills will still return 5% but stocks will 4% return + 5% inflation for 9%

Naive takes. Everyone knows Google is an ad tech company. Real question is if they can diversify long term to be something beyond. Cloud is a great way to achieve this

>Naive takes.

You could probably make a stronger point without an attack like this.

Good point. Edited

Long term diversification need at this point might be a little bit questionable. Like, will a global information network without ads ever exist? They just need to not lose in ads. Granted, they could lose access to more and more content walled gardens, but they could perhaps focus on penetrating those instead of focusing on distractions?

Once companies grow as big as Google nothing really moves the needle. They need to acquire competitors to grow revenue.

Any Google service that doesn’t meaningfully impact the next quarterly earnings should start getting ready for the chopping block.

First you loose the ability to build things and then you loose the ability to buy good things instead of crap.

It's a bit stickier, in that Google's very existence depends on there being a healthy, compelling world wide web, and there being just not that many people funding or supporting or driving that quest.

Google has to be a power for good open source & web. Otherwise they risk losing their whole business to apps & closed Oses, where they have next to no competitive advantage.

This is why I continue to support them despite all their issues. Not because I trust them to do the right thing out of principles at all, but just because their financial interests are more aligned with the open web than the other big tech companies.

I want to agree with you but at the same time I have contempt for Google as they pulled stuff like AMP in an attempt to take hostage of the (open) web.

Edit: not to forget Google uses their hold on the browser market share to push many platform APIs that only further their own goals with little care for privacy.

AMP had some really awful aspects to it, was a power grab. But it also tackled a very real existential crisis, that sites were being incredibly poorly built with ghastly performance, and they did make an ok toolkit. Going power mad & hosting all the content themselves was obscene though.

I agree entirely with your reasoning. But just watching what has happened to numerous Google products in the last decade (perhaps starting with Google reader?), it has become clear to me that Google's ad revenue is what wags the dog, so to speak, regardless of long-term considerations.

Should the Cloud division live under Alphabet or Google?

Big companies pay millions to GCP, surely that is seen as its own revenue source? I don't see anything that would make want to use their search either after using their cloud stuff.

Worst CEO in tech.

I sort of thought he was just a puppet though?

I mean, this was the case for Japanese CEOs too and you can see how Toshiba and Fujitsu are doing as a result.

Shadow emperors don't make for good governments.

More like shadow oligarchy in this case I think.

Who is he a puppet to?

I legitimately don't understand why the board hasn't forced him out yet. Does he have any successes at all during his tenure?

I wonder if there’s any chance they see the AI stuff as bluster. They decided it wasn’t a viable business continuously for years. Now competitors debut tech they already had and sat on. Are they suddenly like, oh god we’ve been wrong for years, or are they like, alright we’ll play along. If it’s the latter their non drastic actions could make sense (not saying I agree with them necessarily though if that is that case).

(Where the purpose of playing along would be to not appear to be behind to the public)

He’s presided over a CAGR of the shares of nearly 20%. That’s a success that the board, representing the shareholders, cares a great deal about.

Yes, but what was the growth in similar companies? What if we compare GOOG to MSFT and a few others?

I see a lot of missed opportunities and wasted potential.

That was from the lock-down sea that lifted all the boats , pretty much every tech company on the planet thrived during that period.

It was a CAGR of over 21% for his first 4 years (all pre-pandemic). Don’t get thrown off looking at a linear chart. On a semi-log chart, you can see the performance was strong throughout and even somewhat stronger pre-COVID.

Cloud is doing pretty well. YouTube started making serious money. Pixel is a long term product line. Avoid metaberg-esque pivots towards crypto or VR

Very few businesses in the last 20 years that can compete with Google ad tech in scale and margins.

You are proving the point that google is just an ad company

If you’re in denial about that, it’s a you problem

Google Cloud has made profit first time in history. Youtube revenue keep increasing. Other bets like self-driving car may payoff. Ad business is suffering less than competitive ad businesses.

Two things investor are recently asking for is reduction in workforce and rationalizing compensation. First one is done to an extent. Second one likely be agenda in coming months and years.

So all in all Google is doing fine and board or investors have no need to be concerned with CEOs. It may change though if competitors do hurt google business in material ways in future.

Cloud under their previous accounting policy is still losing money. (I.e. the change in depreciation rates to lower how much is expensed each year)

Google 2022 net income was nearly 60B. 20% down from 2021, when there still was a pandemic, but in 2020 net income was 40B. They still are making a tons of money while trying very hard to cripple their future of every product but search ads, and everybody says Google search worsened last years. ChatGPT is still a niche, but when many people will have used it at work they may very well use it at home.

Part of doubling down on AI seems to be halving on humans.

Removing perks, no more Google Code Jam, no more open source, all while talking repeatedly about AI.

In the past, some people said that Microsoft had the "windows tax" for new projects. If a project maybe got in the way of Windows, it died quickly.

Does Google have the Google search tax?

Short answer is no, cause Google's development is funded by ads, and not by charging manufacturers. If my tinfoil hat wasn't in the washer, I'd say "you pay with your privacy". That is important for a small percentage of people like investigative journalists, sure, but the vast majority are more than happy to give Google their data.

What emphasis on quarterly results does to an organization

Bad title. How did Google blow it? Their recipe was to take open source software, put a web UI on top of it, get people to use it to either serve ads or to charge businesses for productivity tools.

They're also pretty clear that they won't release the weights or code for Bard or Imagen.

Google should (and likely will) lay off more. Now that they don't need to hire as much, their HR department is a prime target for elimination. Maybe they can replace those useless humans with Bard.

Many big companies that are supposed to thing long term seem to be having "strategic leaders" going "I'll be a success in 2023" If I can claimed to have cut N costs, no matter how.

I know it sounds hiperbolic but when you remember how, in order to manage, many people in upper management end up focusing on few metrics that mean success or failure, then it's very easy to see how the individual careers of those positions can hurt the long term with these "quick wins".

It's not particularly surprising at this point in the year but will still be grating the next time you hear the propaganda.

High interest rates = cut costs now.

That's literally how monetary policy is supposed to work, if economy is overheating with inflation, you force companies to cut costs with high rates. It discounts future revenue, making immediate costs way more important.

Notice that my problem is not cutting costs per se but that it's the only metric looked with no analysis of long term impact.

It's the nuclear and daft option instead of actually becoming more efficient.

If an incompetent guy fires the competent people and calls it success because they saved X on salaries and ignored the myriad of cost cutting alternatives because he doesn't really understand the domain problems except "less cost" then it's not really "how things are supposed to work".

Easy to claim that the ones who do it are in authority therefore they're right but then that means every gov out there is right in whatever they do.

> with no analysis of long term impact.

And how do you know for sure what analysis was done or not?

> Easy to claim that the ones who do it are in authority therefore they're right but then that means every gov out there is right in whatever they do.

Well its similarly easy to say all competent people never be laid-off/fired when you are not the one paying their salaries.

> And how do you know for sure what analysis was done or not?

This authortiarian mindset of "trust them" is hard to argue with. I have my information due to the context I'm in and the people I know and the context they are in. It's like when you talk politics and you know some things despite not literally being in the room.

You know a lot of examples where things work in these local minima for one person way instead of something else.

>> Easy to claim that the ones who do it are in authority therefore they're right but then that means every gov out there is right in whatever they do.

>Well its similarly easy to say all competent people never be laid-off/fired when you are not the one paying their salaries.

Lol. The people who fire then don't pay their salaries either. It's like you're confusing a medium business with these huge corporations. I'm not gonna argue with you because there's clear signs pointing towards what I say and you're coming at me as if I was some sort of teen wanting free stuff and you're advocating for "the guy who puts the money and takes the risk".

You're missing the point of the type of huge companies we are talking about.

HN ranking graph for this story: https://hnrankings.info/36016420/

I do have another theory. Ok may be a paranoid, jaded conspiracy theory after seeing everything in large sociopathic bureaucracies. What if the hiring of so called "high profile" folks was just symbolic and with golden parachutes and secret handshakes in place. I am not talking about the tenure and level based severance amounts. But like their firing was more of a "request" with some promise to hire back once the dust settles. Use this to claim lack of discrimination in the layoff process. Look. We also laid off these X awesome folks so it could not have been targeted. Those on mat/pat/sick leaves was also just coincidental. For all we know these high profilers may just have wanted to use a sabbatical so why not help the company out in the process.

Another take here (from January): https://www.theregister.com/2023/01/27/google_open_source/

Seems to be investor driven, and algorithm driven if the register is right.

Sundar Pichai continues to enshittify Google.

This is where another project from Google seems like a shaky foundation to build upon - Flutter.

It might be abandoned in next few years because of "strategic change in direction" and it is complex enough that just open source enthusiasts can't keep it afloat without some heavyweight funding.