Alphabet Announces Fourth Quarter and Fiscal Year 2022 Results
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Which drives home the need to cut compensation costs. Three sixty in available spend relates to about a $180k salary. Below market. And that's assuming we're zeroing out shareholders. (EDIT: Whoops, nvm.)
Your bio makes this legitimately so much funnier.
It's not unusual for businesses to lay off people and divert the capital towards go-to-market during a recession.
https://info.analyticpartners.com/roi-genome/the-rules-of-re...
If anything, these results show quite the opposite. Google and the like have been quite resilient. Sure, obviously unprofitable companies are done for. We all knew that was coming. But all signs are pointing to a 1-2 year period of realignment rather than anything truly seismic.
Even facebook was able to refocus some of its bets on the metaverse fairly quickly.
All that seems to have changed is that investors are no longer OK with 50+% YOY hiring growth and gigantic bets on obviously moonshot projects taking up a good chunk of the portfolio.
Number of employees: 156,500 (Q4 2021) -> 190,234 (Q4 2022)
That's a pretty big change in headcount from 2021-2022.
Does this mean anything real or is it just accounting details?
($7,315B * 1.32^5) - ($7,795B * 1.21^5) = $9B profit per year (in 5 years).
That's one of the top 150 profitable companies in the world - with a better growth rate than nearly all of the companies ahead of it...
It comes under “Productivity and Business Processes” which is separate from “Intelligent Cloud”
https://www.microsoft.com/en-us/Investor/earnings/FY-2023-Q2...
Companies also do not wait for an institution or someone else to tell them it is officially too late to prepare for one.
They prepare in advance rather than wait for years afterwards.
At this point, markets have figured out the song and dance. The fed issues an extremely hawkish statement. Then it hikes rates a bit less than last time while saying it has a commitment to keep their finger on things till inflation comes down. Markets react in a tempered manner. Repeat.
The layoffs truly suck for those affected by them. But it's not looking at all like 2008 let alone 2000. The businesses are not fundamentally in bad shape. They just bloated and will have moderately underwhelming earnings for a few quarters.
translation: "Investors, please chill about ChatGPT already"
But the space is incredibly exciting as a user/searcher/average joe.
If your websites add no value to the LLM (hence to the searcher, to the world, how deep should we get?), well then thats a good side effect
If it’s like a featured snippet, should work great. “Here’s an answer, read more here”
If the LLM Hoovers up all the knowledge and doesn’t show where it got it, then there is no incentive to produce the knowledge
I imagine Google is acutely aware of this, they have a symbiotic relationship with site owners. But we’ll see.
There is some sort of issue here not well addressed by copyright
Google has failed to win decisively in the search result ranking arms race. Concrete example: sites that rip from stackoverflow have been ranking higher than stackoverflow in google search results. Other search engines fare worse.
If Google trained a discriminator that penalized these practices I think their search product would dramatically improve and the web as a whole might benefit - although tabloid article farms might sue.
They have 84% market share which seems like winning in all the ways businesses care about, regardless of how it ranks your stackoverflow searches.
The arms race of "fast trash" websites vs quality search results is not being won by Google or anyone else as of today. Google having a business model that doesn't even incentivize them to win that race =/= Google not losing that race. It's closer to them giving up in defeat, which is a loss for all of us (many times over).
Maybe it's more convenient for the user to pay the LLM for the info (paid via ad attention or whatever), but if I'm the one who made the measurements, then shouldn't I be paid too? If the user never "pays" me, then I'm going to stop publishing measurements, and the whole LLM falls apart.
Likewise for generative art. The people who made the training data are a critical part of the ecosystem. Cutting them out seems like cutting out some critical part of a food chain.
Google Search could pay some small percentage back when they use their work. But it would be a weird one so not sure that's really going to happen.
What if answering machine business is just a few billion dollars business and completely removed the need of search? What if it is a kind of business that makes hundreds of billions but makes it through selling the product itself? This is fundamentally different from what Google offers.
The idea that maybe Microsoft or Apple or Google or FB doesn't have enough good engineers to code a best-in-class language model is absurd.
They all have orders of magnitude more data than OpenAI to build a better model, though.
Apple released an iPhone, cannibalising their iPod market.
Google built a great search engine long before they worked out how to monetise it properly. If they can’t get AI working in their products someone else will, and google will go the way of zune.
This is a terrible example. Everyone knew cell phones were a bigger market than mobile MP3 players, Apple was using this mobile expertise gained in iPod to move to a larger market. We don't know if ChatGPT will be a larger market than search currently is. Digital cameras (include sensors used in webcams and cellphones) are currently a smaller market than selling film was at peak. If ChatGPT will destroy Search volume, and if it will bring in 1/20th the revenue than it might be best for Google to delay adaptation as long as they can.
> If they can’t get AI working in their products someone else will
Google is using 'AI' in all their major products. It's possible that soon AI will make their most profitable products obsolete.
Yet Meta's 175billion parameter blenderbot is absolute garbage. Despite claiming stats like 'being twice as knowledgeable' or ' Compared with GPT3, on topical questions it is found to be more up-to-date 82 percent of the time and more specific 76 percent of the time'
Feel free to try yourself.
At lot happens in the space in 3 months. See where OpenAI was a year ago compared to today...
> "See where OpenAI was a year ago compared to today..."
3 months versus 12 months - a 9 month difference. OpenAI wasn't actually far from today 3 months ago.
The complexity is in making it cost efficient to run, making it intuitive to use, etc. That's a problem that google is more than capable of executing on. They'll need to reorganize to pull it off though. They'll even sprinkle ad results in.
Google's 2022 FY results are not Meta's: modest but solid revenue growth, costs a bit over-inflated, but not at all beyond the pale. The layoffs didn't seem fiscally necessary, prima facie, unless they have reasons to believe in extremely conservative forecasts for future revenue growth. It would have been fascinating to be a fly on the wall in the board room for that decision.
As a result we now have all the psychic costs of the layoff, but few of the benefits, as it wasn't really even necessary anyway. I'm betting that our headcount will be back up to where it was before the layoffs by summer.
Reflecting on it, maybe one explanation is that the alternative to a layoff would have been slamming the breaks on their (very complicated!) hiring apparatus so hard, and for so long, that it had the potential of grinding to a halt and rusting.
Maybe, they judged that the long-term cost of a layoff was less than the long-term cost of a completely impotent hiring system. IDK.
That’s an interesting thought and I can also believe it’s true.
I also think that perhaps a part of the reason for layoffs at companies like Google in these times is simply because they can easily do it now without people reading much into it.
But that's part of my question: what did they predict that merited a layoff, when their cost structure wasn't ballooning out of control, and which made the alternative of maintaining a hiring freeze throughout 2023 insufficient?
It's anybody's interpretation as to why it would trade higher. Raising buybacks to pre-2022 levels, in conjunction with rising ad impressions and reducing opex are all positive factors.
Q4 showed that their business is actually still working and company is making necessary changes, so they recovered to be roughly in line with big tech peers.
Net income dropped 34% compared to the same quarter last year. 21% drop comparing FY2022 to FY2021. That feels significant, especially when revenue grew over the same periods.