Sundar Pichai hopes to make Google more efficient, hints at potential cuts | Hacker News Reader

Sundar Pichai hopes to make Google more efficient, hints at potential cuts

cnbc.com

91 pointsdonsupreme171 comments

The common presumption with free markets is that companies will grow until they consume the world. But as this article suggests, what actually happens is that companies grow until their internal bureaucracy strangles them.

Google's search business is heavily optimized towards and dependent on selling ads. Competing directly with them in search is not likely to work. But another way of doing search (I don't know what that might be) could completely undermine it.

After all, Google sank Alta Vista and Yahoo with another way of doing search.

> [...] until their internal bureaucracy strangles them.

I think that standard microeconomics textbooks state empirical efficiency curves tend to have an inverted U shape, so beyond certain size things get more and more inefficient. Bureaucracy, politics and communication play a significant role here.

This is also what I have observed in academic and industrial labs, which scale far less than companies. Beyond certain size, quite small in fact, most managers become rent seekers and the whole thing collapses in slow motion.

I think that this is a significant problem for society, as it leads to a massive waste of resources. There should be better ways to scale up organizations, or to build federated ones. Biological organisms are much better organized than us. We can do better.

What do you mean by biological organisms? Don’t humans fall under that category?

Saying bureaucracies are inefficient is just stating stating very common knowledge. Yes, large systems are difficult to control. Especially so when we’re talking about creatures like us with emotions, desires, a need to socialize with others, etc.

I’d love to hear what better structure/design you have in mind that would scale better and be less inefficient.

Fundamentally, groups of people need to have a leader in order to cooperate towards achieving some goal that each individual by themselves cannot achieve. And groups of leaders need a higher leader. The optimum group size is up for debate but not this fundamental requirement for this general structure.

How do you make sure you don’t have bad leaders? Sorry you can’t. That’s an inevitable byproduct of being humans and not machines you can precisely measure and score.

> Biological organisms are much better organized than us. We can do better.

If you’re referring to the fact that an organism like a human body can function with trillions of individual cells, it is indeed marvelous and quite well organized. But, cells and people are different. Cells in your body are all genetically identical, and lack any form of “individuality”. Indeed, they possess genetic fetters that will cause them to commit suicide should they become too unique, and should a cell manage to throw off all of those limitations they will become cancerous and potentially kill the entire host.

Regulating a large and diverse set of individuals is a much harder problem than regulating an army of clones, after all.

I disagree with your assertion that cells in a body are all genetically identical- in addition to any cell-specific mutations (which occur any time cells divide) and epigenetics (which provides every cell with unique modifications), at any time a particular cell's RNA complement is unique and this can be used to cluster cells in a high dimensional space. If you just mean "all cells in a body have chromosomes ultimately descended from the gamete", then yeah, sure, but that doesn't really say anything about the full state of a complex organism (which depends on the instantaneous protein concentrations, damage, etc).

My pet theory is that the problems which people often associate with government have nothing to do with the difference between government and private business at all and are simply a product of organisation size. The logic that a small number of decisions makers directing a large amount of labour/capital leads to inefficiencies due to a decision-making bottleneck certainly seems to apply to both (and indeed to wealthy individuals beyond a certain level of wealth).

Strongly agree.

Anyone who's worked in private orgs of comparable sizes can attest to their horrendous inefficiencies and waste. The idea that somehow the private sector is inherently more productive or efficient is simply not bourne out in practice. But it _sounds_ like it ought to be true so the idea won't die. And we're all worse off as a result.

I think both things can be true. Large entities, no matter private or public, suffer from inefficiency. But, private entities have more control over the allocation of their resources.

With a private enterprise, you have stakeholders at the top that can single-handedly reallocate resources to/away from endeavors as needed. Within government, that can be a lot more difficult as resource allocation is more complex with many more stakeholders and layers of bureaucracy. This is especially true in democracies where changes have to be approved by either the citizens or partisan groups within congress whose goals may be in direct contradiction to the success of your organization.

Idea is that too inefficient private org will go out of business (or at least loose market share), but an inefficient government will remain a burden for much longer time.

That can be how it works, but far from always. Consider Comcast as an example of an inefficient private business that has stuck around for a long time and looks set to continue to do so for some time yet. Conversely, publicly run businesses can be setup to run like private businesses that shutdown if they're not competing. This is especially the case if the public business co-exists with private businesses rather than replacing them.

They are inherently more productive or efficient because:

1. they have a profit motive, and if they don't show a profit, they die

2. smaller companies continually replace large, bureaucratic organizations

> simply not bourne out in practice

SpaceX can launch rockets at what, 10% of the cost of NASA?

> we're all worse off as a result

How so?

The profit motive is part of the problem. It routinely creates perverse incentives.

It has gotten to the point that, rather than seeking to build a great product or provide a great service and make a good profit for doing so, far, far too many companies are seeking to make as much profit as conceivably possible, and making the product or providing the service is simply a necessary evil toward that end. That is part of what has led to the catastrophic financialization of so much of our economy.

Money is not the end. Money is a tool. The end goal should always have been better products and services, a better society, and happier people.

Yes. It seems that capitalism is suffering from a particularly unfortunate case of Goodhart's law [0]:

"When a measure becomes a target, it ceases to be a good measure"

Capitalism is founded upon the idea that the amount the market is willing to pay for something is a good measure of its true value. Which used to be a pretty good measure (and to an extent still is - for now). But deregulation has increased our dependence on this measure, which in turn has lead to an increase in it is being gamed. And over time an increasing share of financially successful businesses are those that exploit failures in the metric rather than those providing genuine value.

[0]: https://en.wikipedia.org/wiki/Goodhart%27s_law

> (and to an extent still is - for now)

Upon reflection, I think that this is also a significant aspect of one major part of the problem today.

In the general case, yes: retail products, for instance, are still subject to market forces such that the price you pay bears some reasonable resemblance to what society considers the value of the product.

But what about ad-supported services? The people consuming the services are not, in fact, paying with money. They have no way of gauging how much the services cost, nor how much they personally are giving up in terms of personal data to indirectly pay that cost.

The personal data sector of the economy is, I believe, a perfect example of a place where Goodhart's Law has run rampant, with the only measures available being "how many users" and "how much annual recurring revenue", and both of these being hopelessly complicated—the former to determine just what is a user, and the latter to determine how the value of the service to its users actually translates into profit.

Not sure how coherent this is, but it seems very relevant.

SpaceX is maybe better explained by The Innovator's Dilemma than by the profit motive.

They have radically different ways of doing launches. These are directly threatening to NASA people wedded to the old ways. In order for NASA to adopt their methods wholesale, they'd have to reorganize completely and probably fire a lot of people. And still do an inferior job, because it would take them years.

Wait 20 years and SpaceX will be just as wedded to the methods of 2022 as NASA's wedded to 1969.

What I said about The Innovator's Dilemma is not the whole story. Governments are inherently more risk-adverse, so they'd prefer to take three times as long if it's perceived as safer.

Right, but we're not comparing the government vs SpaceX, but rather, government vs the private sector as a whole. So if SpaceX stagnates (or Google) then other companies will eventually reach the point where they can outcompete them and things start moving again. But you can't usually outcompete the government regardless of how over-large or stagnant it becomes. That's the fundamental difference.

You can't outcompete the government?? Hello, Federal Express, UPS, and the Internet.

USPS First Class mail volume is down substantially, because no one writes letters anymore.

You're right that you can't drive them out of business, and they get a texpayer subsidy. I sold over 100 vinyl records via Discogs, and I used USPS because they have Media Mail, which is much cheaper than the private services.

You can't outcompete the government, but you could outcompete a publicly run business if it was setup as a competitive business with its own separate budget. In that case, the government acts quite like a private businesses investors/shareholders rather than running the business directly. Which seems like a best of both worlds in many cases.

Budget separate from what? The government's own budget? That's not possible, at least not in a western style democracy. If it's truly separate then it's not publicly run in any meaningful sense, and if that's not true then it's just a normal government department - it can't exist separate of government funding so in practice, the government controls it regardless of what the participants may claim.

There's not really any such thing as the best of both worlds IMHO. What exact benefits are delivered by being run by the government? The best arguments are in cases of natural monopolies, but even there, there's benefits to just issuing licenses to sub-contractors (the result is a sort of quasi half private half public business of the type you suggest but nobody claims this model is one to use when not strictly necessary).

I wouldn't put USPS and Amtrak on any list of "best organizations" but they do have a somewhat different structure than, say, the Department of Agriculture.

If I can play devil's advocate for a moment: there are some businesses (passenger rail, universal postal system) that are not attractive to any private entity unless they're heavily subsidized. Nonetheless, there's a public interest in providing them.

As for SpaceX: the tech boom's brought us some people with billions at their disposal, and space exploration IS within reach for them. I don't think there was anyone in the 60s with the money and the inclination to do that.

Some countries do have (theoretically) privatized passenger rail systems. It can be done without subsidies too, the UK nearly managed that for a brief period, but then decided to pay for the construction of huge new railways. If you aren't expanding the network though, subsidy free operation is possible. Of course we can argue they're not really private because in practice the government won't let them fail as a group. But in normal times at least, companies that want to exit the space can give up their license or be outcompeted for them.

SpaceX exists because there's now lots of use cases for going into space. In the 60s indeed going into space wasn't so useful and it happened so early just because of the space race.

Yeah, the problem with passenger rail is, as you said, "the government won't let them fail as a group." In other words, they don't have skin in the game.

It's also true that freight is a much more attractive business for a railroad, AFAICT. If you fuck up, you just compensate the owners; no one gets killed (most of the time). But the railroads don't have the option of just giving up passenger service, so they can make it so crappy that people leave

Once companies reach a certain size, their continued success is driven far more by network effects, brand awareness, anti-competitive moats, and similar factors than they it is by efficiency and innovation.

There are plenty of individual examples in both directions. Instead of SpaceX, compare private insurance companies to medicaire. Medicaire is far more efficient.

Amazon famously operated (may still, couldn't care less) at a loss.

As someone noted above, both can be true- govt can be incredibly inefficient but so can businesses.

My mother hated working with/for the govt as it made 'firing someone an act of congress'. As if to say neigh impossible.

I'd argue we have all incentives misaligned and that is what causes both govt and private business to become shit-shows.

We have government agencies maxing out their spending every year to keep their budgets growing. We have businesses engaging in moral hazard knowing the government (taxpayers) will bail them out.

We need reform from the top down, inside and out.

> Amazon famously operated (may still, couldn't care less) at a loss.

What's wrong with that? Companies trying to get started and establish themselves operate at a loss, burning their investors' capital. Most companies take many years before eking out a profit.

You said private companies have a profit motive- if not, they die.

I used Amazon as a counter-point. Uber still isn't profitable. So if companies can run for over a decade without making a profit, I'd again say the entire system is broken.

Zombie companies burning capital while driving out possibly profitable competitors is a symptom of rot, not a successful financial system.

Again, my point is that for profit companies are every bit as bad if not worse than government agencies who at least pretend to have oversight.

Very true

Also you get what you pay for and governments generally are not paying at the top of the scale. Giant + middle of the road pay is going to get you the same results in a private org!

If you add in the value of benefits, government employment pays very, very well.

My experience lines up with this. I've worked for large and small companies, as well as the federal govt. My impression of the govt department I was in was that it was reasonably efficient for its size; which, since it was huge, meant it was not very efficient. That said, it didn't seem notably worse than the large corporation I'd worked for. In fact they seemed quite similar to each other.

Google did not really do anything THAT different than Alta Vista - they just did it better, cleaner, and with less junk on your screen. The results were better, they obviously had a better algo, and they didnt blast you with ads. They also (from what I remember) had some early and easy to use search modifiers for the general public (like quotes).

Unfortunately now this has trended toward the opposite as they destroyed all their competition. I am hoping something like Kagi Search succeeds so we at least have more options.

> Google did not really do anything THAT different than Alta Vista

> The results were better, they obviously had a better algo

i'm with walter, i remember using altavista. google was _shockingly_ better. nobody tried google and said "bah i'm sticking with altavista".

> Unfortunately now this has trended toward the opposite as they destroyed all their competition

i certainly agree that they've deteriorated.

Being an Alta Vista user before Google, one search with Google ended my use of Alta Vista. Yes, it was THAT different.

Th difference was that Google didn't optimize search to sell ads, which is the opposite of your original comment.

Google's results (in 1999) were relevant, the best results were on the first page (and very often in the first position), simple search terms worked (I'd long since mastered complex AltaVista search queries, and still had to dig through pages of results for relevant hits).

Hell, I remember when AltaVista first appeared --- I was at a conference where DEC were demoing their 64-bit Ultrix at the time, which was what permitted the search index to be held in memory in the first place (AV's secret to speed).

Google simply blew it out of the water.

That said, that was a very long time ago, and was a very different Google.

No, the differences were fundamental. AltaVista was architecturally very different, independent of ads.

It's a long time ago but if I recall correctly, AltaVista:

- Ran on a tiny handful of big iron machines. It was actually built as an advert for ultra-high end server hardware (from DEC I think?). It couldn't scale up index size as a result. Google used lots of cheap Linux machines with distributed algorithms, which could fit the entire index in RAM.

- Partly as a consequence, relied mostly on meta keywords rather than what was actually in the page. But site authors were SEO-ing the meta keywords like crazy and they were often irrelevant.

- Didn't have any global ranking function like PageRank.

Result was Google's ranking was way better, and they could serve way faster, and they could scale up much more easily.

Is there a search engine today that, in your view, provides better search results than Google? It sounds like you’re implying that.

If anything, AltaVista's query modifiers and logic were at least as sophisticated if not more so than Google's.

Google's ranking was so much better that you simply didn't need the complex queries to get vastly superior results.

Over the intervening 23 years or so, Google's lost significant ground on both factors --- its ranking no longer produces high-relevance results, and it's self-sabotaged its own syntax weaking that angle as well.

The only thing I missed about Altavista was their desktop search app for Windows. This was long before search got built into the OS.

On top of my head, a couple different ways of doing search I've been using lately:

* Business search via maps service.

* "How To" search via video service.

Funny enough, best services to do so are Google Maps and YouTube.

Google already lost the "how-to" competition.

* If you "how-to" a recipe here's a 3000 word blog post with a dozen interweaved videos and a life story at the beginning.

* If you want a "how-to" Youtube video here's a 10:01 video because gosh darn we need to hit that time count to maximize ad revenue, don't forget to smash the like button it really helps my channel

A 12 second TikTok short or searching reddit via a third party app are both terrible alternatives that are nonetheless vastly better then Google's current offering for some meaningful searches.

I think TikTok is up there and possibly surpassed YouTube for the younger generation.

TikTok's user base is huge and their app makes it incredibly easy for anyone to upload and edit videos, so naturally you get lot of how to do X.

I read article about how some young people are using tiktok to search for stuff instead of google. If they want to check out a restaurant or an event they would see if someone made a tiktok of it.

You are probably very correct! I don't use TikTok, but I noticed TikTok second-hand, via YouTube's heavily promoted Shorts.

depends on the how-to, if it's how to not ruin a dress shirt in the washing machine sure. If it's a technical in depth subject Youtube is the place to be, you can't learn systems programming on your smart phone in a minute.

"Free market" does not mean a market without any regulatory structure. A market in which monopolies have formed is not free, as monopolies can force conditions on transactions that would not exist if multiple independent and competing parties were able to participate on the supply side.

Monopolies only form in a free market when the government enforces them. Like the trash collection monopoly in your city.

> Monopolies only form in a free market when the government enforces them.

This is incorrect. There are many industries that lead to natural monopolies in the absence of government breaking them up. Anything with incredibly high fixed entry costs, few substitute opportunities and low variable costs tend toward monopolies (at least regionally).

> There are many industries that lead to natural monopolies

Care to provide a list of these industries conducive to natural monopolies that have monopolies broken up by government?

See my response in a sibling thread for a partial list of industries conducive to natural monopolies. Governments have had to step in to regulate each of these industries to varying degrees to rein in their power because of the fact that the industries tended toward monopoly.

Please name a company, not an industry.

Name one.

The quintessential example is railroads, but also most utility providers (electricity, water, natural gas). Toll Roads / Bridges (often the substitutes are not good alternatives). Telecoms (to a lesser degree and declining thanks to the entry of new substitutes).

Except that railroads compete with each other, and with all the other forms of transportation.

Telecoms only had a monopoly when the government enforced it (long distance AT&T). Phone companies often had local monopolies because cities would enforce them.

People can (and did) build more roads and bridges if someone was charging monopoly rents.

Natural monopoly != zero competition. I’d recommend you read this for more info: https://en.wikipedia.org/wiki/Natural_monopoly

Yeah, I've read it. Didn't find it compelling.

https://news.ycombinator.com/item?id=32762714

What I've come to find an interesting element of monopolies is that virtually all that I can think of seem to be fundamentally networked entities. That might be physical (railroads, utilities, communications, broadcast) or logical (marketing, wholesale, retail), and might involve edges/links (rail, comms), vertices/nodes (ports, datacentres), or quite often a mix of both.

All tend to see some large realm over which there is an increasing return to scale (if there weren't, monopolies wouldn't form), and quite often a single entity may be established over multiple networks or modalities (e.g, Google controlling search, online advertising, and Web browser development).

I've been hard pressed to come up with examples of monopolies which aren't describable as networks, though that description may not at first be obvious.

Non-government-sanctioned monopolies exist as (illegal) drugs cartels, criminal syndicates, and warlord hierarchies, in which growth and maintenance of the network is typically obtained through direct (and non-legally sanctioned) force of arms, coercion, or intimidation.

I'd be interested in knowing what definition of "monopoly" you're proposing.

Under US regulation:

"Monopolization Defined"

The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power. Most Section 2 claims involve the conduct of a firm with a leading market position, although Section 2 of the Sherman Act also bans attempts to monopolize and conspiracies to monopolize. As a first step, courts ask if the firm has "monopoly power" in any market. This requires in-depth study of the products sold by the leading firm, and any alternative products consumers may turn to if the firm attempted to raise prices. Then courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. Here courts evaluate the anticompetitive effects of the conduct and its procompetitive justifications.

"Market Power"

Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power.

<https://www.ftc.gov/tips-advice/competition-guidance/guide-a...>

That's not the only way monopolies can form, but it's the easiest one for sure.

My counterpoint is that without strong independent institutions preventing them, the companies themselves will enforce the monopoly using private security or police forces. If the government is too weak, the company will buy it. If there is no government, the company will form it's own government.

Like company towns- that's the natural end state of an unregulated market. The biggest company in the area can just buy everything and make their own laws.

Free markets require a government - to prevent use of private police forces to enforce their business by violating the rights of others.

Any modern examples? It seems cheaper and more effective to capture regulators—that’s what’s been happening in practice.

This article would have nothing to do with that thesis.

We're supposedly heading into a downturn, investors want to hear about 'efficiency'.

Sundar is playing the game.

And possibly the occasion to make a few cuts maybe he's wanted to make for a while.

competition (winner takes all) naturally results in oligopoly or monopoly in any market. The market is unstable.

You can fight this by unending regulation/antitrust. Or by finding better ways to distribute scarce resources.

> competition (winner takes all) naturally results in oligopoly or monopoly in any market.

Naturally? Name one. Google/Apple/Amazon/Netflix/Tesla don't have monopolies.

look at market shares over time. initially you have innovation. then many entrants fight for it. then one wins.

google is search monopoly

amazon has ecommerce and AWS.

netflix was innovator, middle period.

apple is taking 80% of profits in mobile. middle period.

tesla/electric cars is in beginning.

None of those are monopolies.

You need to get the idea out of your head that "monopoly" means literally has no competitor.

Bingo.

<https://news.ycombinator.com/item?id=32762714>

How is Google not a monopoly? Their nearest competitor is probably 10 times smaller.

bing.com

2.5% market share. Not a real competitor.

I use it. Maybe you can try it for a while and see if you find its results competitive.

Even if the search results are good, Google is still a monopoly.

To name two which have formed oligopolies:

- cellphone carriers in the US

- airlines in the US

Not monopolies.

So? The post mentioned monopolies _AND_ oligopolies. Whether they're monopolies is thus irrelevant.

Does Google not have a monopoly on search?

bing.com

"In any market" is too strong a statement. In markets with high barriers to entry or other factors that make it less competitive, sure, and we call them natural monopolies. But you're claiming that every market is a natural monopoly.

yes some markets take longer times and sometime tech changes so we never reach the end. but the end result is always the same as long as firms are involved. It's a feature of capitalism.

If monopolies are always the end result in a free market, name one.

It's not some immutable law of capitalism. There is such a thing as diseconomies of scale, where firms that are too large end up being less competitive and unable to innovate as quickly. Once they reach that size they might borrow the power of government to crush competition and retain their monopoly, but at that point we may as well it call a feature of socialism, not of capitalism.

I'd be surprised if in twenty years of market forces (that is, assuming neither government antitrust action nor cronyist behavior making competitors illegal) more people were using Google for search than they are now.

>>Pichai also gave more specific examples of how he hopes to [increase efficiency of the company]. He gave a past example of aligning YouTube Music and Google Play Music into one product.

I see creating YouTube Music when you have Google Play Music as textbook Not Invented Here (I'm aware of the irony of that statement). They could have just rebranded it, but no, they started from scratch. They switched audio codecs, and rebuild the entire app and backend infrastructure. Probably because YouTube is run like a separate company inside Google.

They've done this type of stuff over and over. It boggles my mind.

It's less stupid than it looks. Back in the day there was Google Videos and YouTube. Technically speaking, both decent video hosting & streaming services for the time. YouTube won the market and Google Videos is a forgotten footnote.

Q: If you are a Google C-suite executive in 2005, which video service do you bet on?

A: Give both Google Videos and YouTube a few years of runway and see which one demonstrates better traction.

He's talking about music though.

The fact that YouTube was able to start their own music app and then eat the Google brand - and then Sundar gives this as an example of efficiency. Missing the forest for the trees IMO.

I would point to YouTube music (and movies/shows) as being one of Google's biggest mistakes (not because I loved Google music, but because YT music a confused product/brand and reduces revenue opportunities).

The weak leadership at Google is certainly a inefficiency.

Wasn't Youtube acquired after Google Videos was already created?

Not just that but it was launched _after_ google videos (January 25, 2005 vs February 14, 2005)

https://en.wikipedia.org/wiki/Google_Video

https://en.wikipedia.org/wiki/YouTube

Google Play Music was good and YouTube Music is awful. When they merged GPM into YT Music I signed up for Spotify instead.

And not only the apps. The branding and lack of focus. And now they bundle YT music with YouTube. Talk about missed revenue. The entire thing is such a disaster. The fact this was given as an example is hilarious.

Most probably agree that places like Google are bloated. There's a lot of people there that are highly paid that don't add much value. Even if you ignore products that are unprofitable, there are people that really don't do much and get paid a lot to do it, which is kind of odd in a competitive market.

My (conspiracy?) theory is that payrolls are padded by design. Suppose Google gets out of the unprofitable aspects of their business and cuts back drastically. You can probably get rid of 50% of people while keeping 90% of revenue. You could say that its not forward looking as these "other bets" could pay off in the medium to long term, but this has been going on for a while and it's pretty obvious by now that other bets are almost always bad, definitely not worth the investment.

Even if they are, a place like Google doesn't have the right structure to compete in these markets. Things aren't dire. I remember a portion of Chaos Monkeys where the author describes Google+ as an existential threat to Facebook, so he drives to the Google parking lot on a weekend and finds no one there. Obviously Google+ wasn't a serious enough concern to Google that would require weekend hours so the author concluded (correctly) that its not the existential threat that Facebook thought it was.

So what would efficiency look like? Well, Google's gross profit margins are 55+% and their net profit margin is around 25%. It's hard to find those margins in other competitive industries. So what would their margin be if they cut expenses by 50%? They would have uncomfortably high margins that look bad to regulators. Similarly they would have a ton of excess cash that they would have to pay out in dividends or stock buybacks (also politically unpopular). To add to that, managers would reign over a smaller domain.

You see the same behavior at utilties companies where they're allowed to charge cost + markup. They have no incentive to bring costs down if it just means they have to charge less. Obviously there are no price controls affecting Google, but if their margins shot up to 100%, it wouldn't look good.

So a place like Google allows for inefficiencies and bloated payrole because it keeps everyone happy (other than shareholders) and it keeps them off the radar of more strict regulation.

https://www.macrotrends.net/stocks/charts/GOOG/alphabet/prof...

> so he drives to the Google parking lot on a weekend and finds no one there. Obviously Google+ wasn't a serious enough concern to Google that would require weekend hours so the author concluded (correctly) that its not the existential threat that Facebook thought it was.

This line of reasoning was viscerally distressing for me to read. Both for what it implies the FB guy thinks about what productivity/seriousness looks like, and for the brittleness of the reasoning used to draw his conclusion.

Especially with the benefit of hindsight, imagine thinking that the reason why Google+ failed was because the engineers weren't working enough hours.

Did Google+ really fail, though? It seemed to me that their primary goal was less about building a social network and more about preventing Facebook from owning the whole digital identity space: that is, Google+ was a response to the wave of "Log in with Facebook" buttons sweeping the web at the time. While the social network never took off, Google did successfully prevent Facebook from becoming a gateway to the web.

Very much what you said.

I'd love an explanation of what technical delivery failures--not the right functionality, or delivered too late--the author thinks led to G+ not beating Facebook.

I think its a bit of a resources curse. Google+ goes live and instantly they have tens to hundreds of millions of users.

If you bootstrapped a social media company and you have that many users, you'd likely read it as a signal that you're doing something right. But with Google that's baked in to their brand and connections with existing services. So it takes a lot of skill to tease out signal from noise. How many people actually find this valuable and how can we iterate? Again, its relatively straight forward for most companies by tracking a few key metrics, but with Google the dataset it just polluted.

It also wasn't existential for their survival. If Facebook failed, it would have brought down everything, so they were very much invested in the product and geared all resources to ensure survival. With Google+ it was just a feather in the cap and not a priority

I think the "resource curse" hypothesis is interesting, but there's also a simpler explanation: social networking is an _extremely_ sticky, winner-take-all market.

Google+ isn't the only competitor to fail to unseat Facebook. I think that says far more about Facebook than it does about Google+.

The FB guy demonstrated how thoughtless his mental model of successful companies was, and eventually got what he deserved.

Google+ worked differently from the rest of the company and definitely had a few all-nighters and all-weekenders (those folks had haunted eyes) but only because people thought they could parlay their efforts into promotions or more influence at work.

Amusingly, Google+ got turned into a commercial product (https://en.wikipedia.org/wiki/Google_Currents) which is being slowly wound down. The only successful Google+ community i ever saw was inside google (in the internal corp Google+) and even then, almost nobody who joined after ~2018 even knew it existed (instead, most people just used memegen). My current employer had it, and it was a ghost town.

The sad thing is that in the last 10 years I cannot name ONE new Google/Alphabet product that has turned into a "cash cow" for Google, or that has been a wide success. Chromecast, Pixel and Google Cloud are the most high profile, and I feel that only Google Cloud is the potential cash-cow (is the business unit profitable?)

For a company as large as Google and full of so many clever people, why has this happened?

Just because you have money doesn’t mean you can consistently come out with bangers. Google’s claim to fame was its search - everything else was either acquired (e.g. YouTube), a reaction to trends (e.g. Google+), or a small side thing, made moderately popular by Google branding/marketing. Same with Facebook.

Right, but even Facebook, Microsoft and Apple have had new products/business-units in the last 10 years like Oculus, Apple Watch, Minecraft, LinkedIn. Either through acquisitions or new product development.

Forgot AirPods, which is being discussed in a separate post.

Photos has a billion users and was released in 2015.

Maybe Google Pixel?

> he drives to the Google parking lot on a weekend and finds no one there.

Not true! People were there to use the free laundry machines and the Fitness Centers. And even eat at the one cafe that was open.

One reason is that google acquires to squash competition rather than always to obtain their talent for anything else

This is true of all the tech whales, it's actually smart business in a climate where antitrust enforcement doesn't exist. Paying a few million dollars a year for a team of engineers to do nothing for a few years to eliminate a startup that could have carved a couple of hundred million dollars a year out of Google's top line is actually a great return on investment.

Do you mean competition in terms of employees (hire so they don't work elsewhere) or companies?

The employee thing is silly IMO. It's just a losing game and the number of engineers is very high. And the hard part of creating a killer app isn't necessarily the engineering requirements. Sure some hard problems require a few dozen people out of maybe a few thousand, but most killer apps are relatively simple CRUD apps that require relatively basic engineering. Finding product market fit is the hardest part and that's not necessarily an engineering problem. There will always be people that want to leave FAANG for other opportunities even taking a huge paycut. And most apps don't require tens of thousands of engineers to create.

In terms of acquiring successful products, maybe. I do think its weird when companies pay big money to buy a user base of a few hundred k to millions and shut it down. An example is Twitter buying Vine, but that didn't prevent TikTok from being invented. But there are counter examples of course like Meta buying WhatsApp and Instagram.

Maybe FAANG does do that but its a bad strategy and is wasteful

Maybe we'll only get two new chat apps this year.

Can't wait to tell all my friends on Allo, Chat, Duo, Hangouts, Spaces, Messenger, Voice and Wave. Pretty sure I'm missing a few.

Newest nonsense from google, two Google Meet apps

https://www.ghacks.net/2022/08/05/googles-merging-of-video-c...

This drives me bonkers. 10 years ago, I could easily place a call to my mom from Gmail. This was easy, and importantly, easy for her to figure out.

This endless parade of chat and video things that don't work very well is just nonsense.

'Meet' required an email invitation. So we went from clicking a button in Gmail itself to having to sit there and send an email.

This Duo thing doesn't autocomplete email addresses that are in your contacts.

And it ALL WORKED FINE 10 years ago! It's not like they're moving in fits and starts towards something that works. They had something that worked, and just utterly wrecked it.

We originally had Google Chat which was similar - super simple - super easy to use for existing gmail users. Reliable. Lots of people had it.

I swear they rebranded it like 5 times and each time had new interfaces, apps, features, dropped features, etc etc. And where did we end up now?

Google Chat :-D

Yeah - I could send both 'chat' messages as well as SMS' right from inside Gmail. Now there's some Messages web app that is kind of lame.

If it makes you feel any better (it probably won't), it drives the internal people bonkers too. Five years ago Google's shitty product strategy was a fun weird thing that we could laugh at. Now we can only cry.

>Google CEO says he hopes to make company 20% more efficient

The 20% number makes sense:

According to their latest Quarterly Report, Google's Q2 2022 profit was identical to Google's Q2 2021 profit, yet the company increased headcount by roughly 20%.

This means profit per employee is down ~17%.

Page 2 of https://abc.xyz/investor/static/pdf/2022Q2_alphabet_earnings... has both number of employees and quarterly profit for each quarter.

This is also likely why Sundar keeps saying "There are real concerns that our productivity as a whole is not where it needs to be for the head count we have" - https://www.cnbc.com/2022/07/31/google-ceo-to-employees-prod...

EDIT: Added more links and notes

EDIT2: Math

Google OpEx for 2022 was ~$180B [1].

IIUC, salaries are ~$20B - total R&D spending is ~$31B [2]. However, at least some software developer expenses are counted in Costs of Revenue [3].

Unless my numbers are wrong - it appears cutting OpEx by 20% would be hard to achieve by cutting headcount.

[1] https://www.macrotrends.net/stocks/charts/GOOG/alphabet/oper...

[2] https://www.statista.com/statistics/507858/alphabet-google-r...

[3] https://www.sec.gov/Archives/edgar/data/0001652044/000165204...

To return to Q2 2021's Profit-Per-Employee they wouldn't need to cut OpEx by 20%, just increase profit by 20%.

>it appears cutting OpEx by 20% would be hard to achieve by cutting headcount.

Cutting OpEx by 20% isn't what I suggested the problem is. If it were, that would increase Profit-Per-Employee way past Sundar's goal:

If they cut an OpEx of 180b (let's say 45b per quarter) by 20%, their profit would grow by much more than 20%.

0.2 * 45 = 9b while profit was 20b for Q2 2021 and 2022.

Saving that 9b would increase profit by 45%.

EDIT:

Oh, unless you're suggesting Sundar is saying he wants to cut OpEx by 20% in article, in which case I agree with your assessment. However I didn't suggest Google should try to fire 20% of people, that would probably make things much worse.

When Sundar says 20% more efficient, I'm interpreting that he wants that Profit-Per-Employee ratio to go back to where it was Q2 2021.

> Profit-Per-Employee

Employees are only one kind of expense. Why does Profit-Per-Employee matter?

Ooof, will they be letting go 20,000-30,000 employees? Sounds scary.

I don't think so, but to close that profit-per-employee gap they'll have to find ways to get profit up, while likely letting normal resignation/performance churn trim the count.

Yea I cant see that happening. 20% productivity doesn't mean cutting 20% of heads.

But why go on such a hiring spree this year??

Translation: We‘re firing the last 5 customer support people in the organization.

the suggestion that Google has five support humans is a gross overestimation

Google has many thousands of fulltime customer support workers https://www.extremetech.com/internet/336765-google-contracto... why so invisible in all these ways I do wonder

That article doesn't seem to be about customer support.

But anyway, Google does have customer support people. Make an adsense account, buy a small amount of ads and stop, and you will get plenty of contact with them.

The article is about support roles as a leading role for contract-based hiring.

>Tech companies often hire contractors for support roles, especially when those roles are in high demand or might be outsourced to other countries within a relatively short time frame.

From Google's own page about their contractors, where they spend paragraphs justifying why this practice is normal/acceptable because they're ashamed of it and otherwise hide it https://about.google/extended-workforce/ :

>We contract with businesses around the world to provide specialized services where we don’t have appropriate in-house expertise or resources, often in fields that require significant specialized training like cafe operations, medical care, transportation, customer support [...]

They are eliminating even those.

Chaser: those 5 customer support people's actual role is something else - they're just occasionally doing customer support because desperate clients have nowhere else to go.

The stock price of Alphabet never made any sense to me. Google has the best AI in the business, YouTube is an 800 pound gorilla with billions of monthly users, and their search and ad business literally print money out of thin air.

It makes no sense for Apple to be worth $1 Trillion more when their business is on a much more shaky ground. Their entire chip business relies on TSMC and China dictates the manufacturing side of things.

Nobody really seems to know what Google is doing. Google itself can't seem to get its various teams to work together instead of against each other. It's like a broken government... gets a bunch of money and then wastes it all on random pork barrel projects with no real vision.

Their successes are all acquisitions from past decades, spammed to death now with terrible advertising. Their new experiments are mostly dead or dying. Don't think they've really succeeded at anything after Gmail, Workspace, and Android...

Meanwhile Apple singlehandedly invented (and continues to reinvent) the premium devices segment, and is about to capture the advertising market on their platforms because they were willing to play dirty (privacy lol).

Apple does a few things well. Google does a hundred things mediocrely and then spams ads everywhere if they succeed.

> It makes no sense for Apple to be worth $1 Trillion more when their business is on a much more shaky ground.

Apple is bankrolling TSMC R&D and their supply chain is a tightly run ship. The market is rewarding them for these moves.

I'll take a wild guess: Google's servers' chips are also manufactured in Taiwan and China. Am I right or not?

That's not their bread and butter.

But their core business depends on their server infrastructure. No chips, no servers and therefore no ad money.

All of that can be true, but it's not obvious whether "best AI, search, and ads" and "biggest video site" is worth more or less than "best phones and tablets, great laptops, best earbuds".

"More efficient" LOL. I think that means "get rid of 3/4 of the managers and half the developers."

I was actually in Google Maps for a year and a half. There were about 12 people, plus PMs, who were working on a monetizing version of Maps. A whole new unnecessary database system ("the Vector DB") was developed, which led to its architect publishing an academic paper. (You can still see some of my work if you upload a CSV of places to a "private maps" layer, AFAIK)

It was nearly all wasted. Was there any accountability for that? I think you know the answer.

On the "other bets" issue, though: I do know someone in Fiber who says it's reorganized and making good progress, so maybe that one will work out eventually.

I think Googles problem (and a lot of big companies in general) is that when they get this huge there is obviously huge bureaucratic issues. There is maybe a need for the company to be developing new features (like probably specific aspects of what you all worked on while developing a monetized Google Maps) but some manager somewhere needs to internally pitch a product (that will directly generate revenue) for the internal investments to be made in engineering time, market research, etc etc.

My opinion is that large orgs like this should instead open a whole new arm that is purely dedicated to research - no direct profit motive - and the assumption that on paper it will be a huge loss each year. Hire good people who want to make cool shiny stuff that is probably but maybe not even required to be related to products and services you already sell. Integrate those features then as needed into existing and new revenue driven products and stop developing products that are redundant or unnecessary.

Yeah, no argument. Except every two years (or whatever the turnover period in top execs is), you have some suit arguing that "research needs to be more closely aligned to product development." And hordes of mid-level drones complaining that Research hasn't done anything for them lately. It's a constant guerrilla war the CEO has to fight.

Indeed, renaming to GOOG is a good start, saving 34% right there.

Google has been in a 'hiring pause'/reorg for 8 weeks now, with candidates completely frozen in the hiring pipeline because VPs are reviewing each open req one by one.

It's amazing how tone deaf this is when concurrently with this announcement is leadership causing a completely cluster fuck in the hiring pipeline because they need to micromanage each req.

I'm not saying they shouldn't change their hiring goals, but they seem utterly baffled about what reqs to keep and what to close. I think the problem with G is the leadership...

He could start by cutting the team that flags Google’s own emails as phishing attempts.

Well, I got a message from a Google HR telling me about different vacances within Google.

I don't know what's their game here.

An old trick used during downsizing. Place a job ad or two, and fire up the recruiters. It creates confusion in the market about what they're actually up to.

Why not start with projects like Wing? Pretty much any project whose goal is "save the world" not "make more profit for google in the short term" should be considered.

Good, Google has so much fat they can trim, between products that are useless to employees that don't do anything. They could double profitability over night if they wanted to.

1) realize that gmail is a messaging app in beta

2) yeet it

3) ???

4) profit

Please don't refer to people and their livelihoods as "fat." Cheering people losing their jobs is gross.

> Please don't refer to people and their livelihoods as "fat." Cheering people losing their jobs is gross.

Trimming the fat is a commonly used idiom, not only in business but anywhere there is excess and unnecessary items not helping the bottomline. As an investor I care much more about Google's profitability than the ineffective headcount. They can trim plenty of employees and still be an effective ad company. People hardly work there (not all but a significant amount), its been known in the industry forever.

> Trimming the fat is a commonly used idiom, not only in business but anywhere there is excess and unnecessary items not helping the bottomline

There are lots of commonly used idioms that are gross, especially in certain contexts.

> As an investor I care much more about Google's profitability than the ineffective headcount.

And your investments are objectively less important than people putting food on the table.

> There are lots of commonly used idioms that are gross, especially in certain contexts.

That is just like your opinion.

> And your investments are objectively less important than people putting food on the table.

That's just not how publicly traded companies operate. Good luck to these people, I'm sure they can continue to contribute elsewhere, earn a fair income and continue to put food on the table. I feed my family by investing in publicly traded companies, and therefore would like the most amount of profit for the least amount of investment. If these employees truly fear being laid off they can work harder, good, valuable employees are rarely let go in any business.

Trimming the fat can be used to also be net zero in employment loss. E.g. cutting projects that are not going to make money and reinvest the effort from Engineers into extending more impactful (profitable?) products.

Trimming the fat primarily means trimming the fat off a piece of steak or pork, which makes sense because there the fat is tasteless and so completely useless (unless you need lipid calories for some reason).

People's investments are putting food on their table.

Prioritizing investors' interests over employees' interests is one of the biggest reasons our economy and society have been declining over the past while.

Investors like you need to realize that your money is never, ever as important as people's lives and livelihoods.

By what measure? Don’t we have the strongest, most productive economy in human history?

What exactly is the problem, and what is your proposed fix?

The problem is many people don't have enough money to pay rent, put food on the table, and keep the house heated...while a small number of other people are so concerned that their dollar-denominated high score might not go up quite as high, they demand that the first people be sent to die in the streets so the companies the second group have investments in don't have to pay them anymore.

edit: whoops, forgot your second question

My proposed fix...is complicated, because there is no simple solution. We need a cultural shift to value people's lives and dignity more than money and profit, and I don't know how to make that happen.

In terms of slightly more actionable things...we need a universal basic income, ultimately. In the shorter term, we need stronger and more widespread unions, better legal protections for workers' rights (and much more effective penalties for companies that violate those rights), and a stronger safety net.

Just in terms of this thread? What we need is more compassion. Recognizing that when you're asked not to talk about firing thousands of people in such flippant and dismissive terms as "trimming the fat," it's not because your rights to free speech are being eroded, but because you're being asked to care about other people's lives more than you care about adding more zeroes to your investment account balance. Or at least care about them enough not to publicly talk about them as being worthless "fat".

There is a non-trivial amount of people within Google that are taking advantage of the system and getting away with next to no work.

No cutback will be perfect and people that don't deserve it will be impacted.

But some people really deserve it. The current situation is not fair to people that actually do work and creates perverse incentives.

You can increase efficiency without cutting people.

I suspect they will start with the troublemakers, such as that anti-Israel "activist," who got caught lying about retaliation.

https://elderofziyon.blogspot.com/2022/09/activist-who-says-...

I was wondering what the result of the "simplicity sprint" was.

Good, the market can and will soak up the excess talent.

Statistically a large proportion of those people have spent a decade or more avoiding any work at all while making the most of the free salad.

Unlike the Xoogler waves of people who wanted a new challenge and spread Google techniques and philosophies all across the industry, many of the people laid off are going to be the ones who don't produce anything at all.

It might be hard for them to find work; or maybe it will be easy because of a halo effect but those who hire them will go on to regret it.

This is my sister's estimation - a lot of Google (and FAANG) isn't actually tech. She works in science and has an uncanny ability to reel of stats about where the scientific papers are coming from and what companies are doing research of value.

The upshot of this is a belief that 'we have tech' when we don't. It is a dangerous illusion.

> where the scientific papers are coming from and what companies are doing research of value.

Genuinely curious: what are the companies that are doing research of value?

You had me until “talent.”

19% more efficient, I could have gotten behind. But 20%?! Come on.

I've known people who got into Google who shouldn't be there. They don't have good DS&A knowledge enough to pass the interviews, but they passed anyway (hint: diversity and inclusion). They also said that they frequently do nothing all day, just collect paycheck.

Downvotes incoming. Bring it on.

It's almost too easy now to point out problems at megacorps, but I'm thinking that probably Google won't be able to fix their problems and still follow the profit model they've chosen. These are the issues I see, please let us know if there are fixes now:

  * Keywords missing from results, no way to set verbatim as default outside of Chrome
  * SEO results aren't filtered out, no easy way to report results as spam without a Google account
  * Results differ by user, huge consequences for society around the big lie and deep fakes
  * Google took first order ad market revenue, Facebook took second order, we subsist on third order scraps (the 1% remaining)
  * Any of us could change the world with $1 million, Google has $1 trillion, so maybe the world was denied a million innovations (see opportunity cost, guns vs butter)
  * Even at its height, Google search couldn't provide something akin to SQL queries for manually refining results
  * Alphabet exists in the face of antitrust laws
  * Google and the other tech companies perpetuate Fizz Buzz interviewing instead of hiring by credentials and experience, feeding elitist dogma
  * After all these years and countless billions of dollars, still no micropayments, crowdfunding or UBI model, especially for open source/invention/automation
  * Google knows how we think, Amazon knows what we want, Facebook knows who we have a crush on

As long as FAANG companies vacuum up nearly all available capital, I don't see a way out of this mess. I wanted a gift economy by now, instead we got whatever all this is, with less than 10 years now until AI surpasses humans at any task and 20 years until AGI surpasses humans at all tasks.

Is this alarmist? Is 5G disrupting weather prediction alarmist? Is 10,000 Starlink satellites disrupting astronomy because they couldn't be bothered to spray on a $20 antireflective coating because they wanted us to see them as an advertisement (see McDonalds sign on the moon) alarmist? Is PFAS in all rainwater alarmist? Don't look up, etc, etc.

I miss the old Google so much.

Oh man you made some really good points until the AI nonsense and unrelated anti-capitalist rants.

You're right, I projected my own fears around subjugation and damage to our natural world onto Google's struggles and it's not a great look. I wish I could delete half the stuff I've posted on the internet.

To be clear, are you saying that the Singularity isn't a threat to humanity, and that environmentalism is anti-capitalist?

Reply on news.ycombinator.com