Oops, oops, gah!
Google GOOG 0.00%↑ has had some false starts since the sudden embrace of OpenAI and ChatGPT. The first one was an impromptu (apparently unsanctioned but also unstopped) demo hosted by some Google employees in France at the very beginning.
At the time we dismissed it because it was so disorganized it could be chalked up to being unprepared and confused. Just wait until next time…
And so we waited. There were some noises and introductions but not until we got the big Gemini reveal were we all aghast at what was put out.
My first reaction was a kind of “ha ha” Can you believe this? My wife looked at some of the bizarre output. Then after a minute, we were asking ourselves “Didn’t anyone test this before release?” and “Wouldn’t the executives have huge visibility on this and be intimately involved so this wouldn’t happen?”
There are plenty of stories out there about the problems but samples include George Washington and the “founding fathers” being black and asian. And the software was unwilling to do anything in the style of Normal Rockwell since “his work was racist.”
Marc Andreessen pointed out on X that Google saw this as a feature and not a bug. That means that Google (at least initially) is saying “yep, that’s how it works, the results are all based on what a few people here think you should know.”
I realize there is pressure on these big companies to not let their software go off the rails. We remember the AI chatbot from Microsoft that quickly turned into a raving racist online and had to be “unplugged in a hurry.”
Doing it right is hard. Especially when we seem to have evolved to the point where “alternate facts” are a thing.
Product What?
What concerns me more though is the inability Google has in developing products. They have avoided even having strong concepts around product management, let alone smart product managers. Google hosted a say for analysts about a decade ago to introduce a whole new team of product managers for every line. I was particularly interested in whether they would finally do something with Google Finance.
The key feature of that day: “We stress that none of these new senior product managers have any experience whatsoever with product management.” I’m not joking. (Okay I did add the “whatsoever” but the rest of it is a direct quote.)
Of course, nothing has changed since then. Google Finance and many other products have gone nowhere or been shut down.
Are there any Pixel users out there? Didn’t think so…
A one-trick pony doesn’t need to learn anything if that trick is good enough and that’s what Google search has been, especially financially.
But the vaunted Google search has been struggling for years, long before ChatGPT stole all our headlines. I moved off Google Search for good well over a year ago and I wasn’t an early adopter there. See A Better Search and Is Google Search Sunsetting.
It’s the head.
No Google is not dead. I would not even go short it here because even their “legacy business” and mix of assets is enough to make that not a good trade.
There have been many published first-hand accounts of how bad the operations and culture have become at Google. They remind me of my days at IBM leading up to 1990. Things were changing after the incredible boom years and management was slow to catch on. IBM did a huge round of layoffs and noticed that the tens of thousands of people let go had no impact on the business. That’s because they weren’t doing anything!
You might find many large companies fail to maintain the glory days that propelled them to success. But the Gemini roll-out is a giant red flag telling us that the company is fundamentally broken inside and it goes all the way up to the top.
The CEO is a lifelong Googler so all he knows is toolbars, search, and browsers. Google is facing a situation for which it is ill-prepared on most fronts and without battle-ready leadership.
It’s not too late for Google to turn this around but the changes needed at the top, including the CEO, are going to be too hard to make, especially when you are still minting money from a search, even if it’s in decline.
IBM got Lou Gerstner, Microsoft got Satya Nadella. What’s Google gonna do? Who can they get?
I’ve got no dog in this particular hunt. I’m long a little NVDA and short a little AAPL with no position in GOOG.
[As usual, every disclaimer in the world applies here - not financial advice, for entertainment purposes only, the author can change and reverse positions anytime, etc.]