What is definition of dead? 15 years later they have huge majority of traffic share and lots of revenue.
They're dead when everyone starts to hate them and someone says "no, look how much money they're making, they're fine." That's the fatal blow, because they think they're fine, and keep doing the things that make everyone hate them.
At that point you're just waiting for someone else to offer an alternative. Then people prefer the alternative because the incumbent has been screwing them for so long, and even if they change at that point, it's too late because nobody likes or trusts them anymore, and ships that big can't turn on a dime anyway.
You have to address the rot when customers start complaining about it, not after they've already switched to a competitor.
I remember running into Kodak engineers, at an event in the 1990s, and they were all complaining about the same thing.
They were digital engineers, and they were complaining that film people kept sabotaging their projects.
Kodak invented the digital camera. They should have ruled the roost (at least, until the iPhone came out). Instead, they imploded, almost overnight. The film part was highly profitable.
Until it wasn't. By then, it was too late. They had cooked the goose.
One can really dream up a fascinating alternate timeline of iKodak if they didnt shoot themselves in the foot.
It had a magnetic mount, where you could snap on external lenses.
I'm pretty sure they still have some variant of the concept, except that it's an external camera that uses your phone as a viewfinder.
The company imploded because it spent all of its time, attention, and capital trying to become a pharmaceutical factory, starting in the mid-1980s.
They did indeed have a huge patent arsenal from all their research efforts that was very valuable. They were also really good at consumer tech - so it’s a shame it didn’t amount to more.
In other words, it could have been better for Kodak as a whole if they allowed their digital-arm to compete more with their film-arm, so that as the market shifted they'd at least be riding the wave rather than under it.
The Flash Renaissance was the counter-era to the search despair era we currently find ourselves in.
In the same vein as Kodak, I wonder what the alternate timeline would look like where Adobe cannibalized native apps.
It's kind of astonishing that all these years later we still don't have something equivalent in browsers. In theory they're Turing-complete and you can do whatever you want, but where's the thing that makes it that easy?
Suffice it to say, there are a lot of people who worked very hard to make sure that the 1998-2012ish period of openness and open-access and democratization was an anomaly. You got to see a mini-echo of this with the rollout and rollback of pandemic-era accessibility.
Fujifilm survived by diversifying more into a chemical company than a consumer product company (whereas Kodak sold off those portions of the company as "not being core to consumer imaging" and focused on printers(??))
And yet even Fuji are now back to having traditional film photography being their single largest revenue generator (their instax instant film is now so popular it is chronically sold out and they are doubling factory capacity to keep up)
And the internet isn't new anymore. There is no vast landscape of unexplored new technological possibilities, and no garage start up with an engineering mindset that will just offer a better solution.
https://www.statista.com/statistics/218089/global-market-sha...
And that's just desktop. Microsoft ceded the entire mobile market, which in turn now represents the majority of devices. The majority of the company's profits no longer come from selling Windows and Office. If they hadn't pivoted into a new line of business (Azure) they'd be on a trajectory to impact with the ground.
IBM has been bleeding customers -- and business units -- for decades. Their stock is flat, not even keeping up with inflation, compared to +300% over the last decade for the overall market. And they have no obvious path to redemption.
Oracle is kind of an outlier because of the nature of their business. Their product has an extraordinarily high transition cost, so once you're locked in, they can fleece you pretty hard and still not have it cost more than the cost of paying database admins high hourly rates for many hours to transition to a different database. Then they focus their efforts on getting naive MBAs to make a one-time mistake with a long-term cost. Or just literal bribery:
https://www.cnbc.com/2022/09/27/sec-fines-oracle-23-million-...
And even with that, their database market share has been declining and they're only making up the revenue in the same way as Microsoft through cloud services.
Meta isn't a great example because people just don't hate them that much. Facebook sucks but in mostly the same ways as their major competitors, they're still run by the founder and they do things people like, like releasing LLaMA for free.
Maybe it's time to switch to a competitor.
This is certainly a completely different picture than Yahoo for example.
And your argument for Microsoft is that they are in a death spiral because they only have 70% of market share on the desktop, and are shrinking by 2% per year, so in, uh 15 Years they might only have 50% of the market share! Also, please ignore that they successfully diversified their revenue streams to other markets (Cloud).
And your evidence is that they failed to capture the mobile market. While you also argue that Google is in a death spiral when Google is actually the company that won the mobile market.
I think you might be using the term death spiral in an unconventional way here.
You cited them because they are hugely profitable, ignoring the ones that are already defunct. And the entire premise is that a company can simultaneously be posting profits while doing the thing that will ultimately destroy them.
> And your argument for Microsoft is that they are in a death spiral because they only have 70% of market share on the desktop, and are shrinking by 2% per year, so in, uh 15 Years they might only have 50% of the market share!
Platforms have a network effect. They're doing so poorly that the network effect from having 90% market share isn't enough to prevent them from losing market share. But now they only have the network effect from 70% market share, which makes it even easier for customers to switch. That's how you get a death spiral.
> Also, please ignore that they successfully diversified their revenue streams to other markets (Cloud).
Which are in turn dependent on customers using Windows so they need Active Directory etc. See also:
https://news.ycombinator.com/item?id=40142351
> And your evidence is that they failed to capture the mobile market. While you also argue that Google is in a death spiral when Google is actually the company that won the mobile market.
It is unquestionably the case that Microsoft lost the mobile market, which is the larger market. Android has the most worldwide market share, but Android is free to use and generates revenue for Google only to the extent that people want their services. If people stop wanting their services and switch to e.g. another search engine, how does it save Google from this even if they're using Android?
GE, while a reasonable example of a company that declined severely from its peak, was still generating 9B$ in income on 2023 before being split in better focused and profitable successors.
AOL/Yahoo were never dominant in a mature market. They were early to the Internet, but this was an uncharacteristically volatile time with an exponentially growing market.
Sony is also a leading manufacturer in several tech sectors (second largest camera, largest premium TVs). 6B$ net income and rising.
3DFx was never dominant in a mature field but, again, early in a nascent one. They collapsed quickly, not through some highly profitable extended death spiral.
Compaq was never dominant in a highly profitable field. Their market share peaked at 14%.
DEC might be a genuine example, they were never the top of the field, but they did not manage to adapt and turn things around when the world moved in a different direction. Compare to IBM who _were_ in a dominant position in the same field, and have leveraged that position into a sustainable and steady, if smaller and less groundbreaking, business.
Google might be in trouble (relatively speaking) if LLMs disrupt search, but they are not close to being in trouble from being outcompeted in search itself.
AT&T: today is not AT&T. The name was bought. It used to be Cingular.
GE: so your point is that it is a good example.
AOL/Yahoo: A 'mature market'? Are you making up rules so you can disqualify them?
Sony today only innovates in image sensors. They are a financial and entertainment company. Who cares if they sell the most 'premium TVs', this is the company created (off the top of my head) Betamax, CDs, DVDs, Minidiscs, Trinitrons, and made the best consumer tech in the world -- consistently.
3Dfx was the leader of an industry that is now lead by nVidia. That industry wasn't as big then, but everyone knew it would be and it was theirs to lose.
Compaq was the market leader in PC sales in the 90s.
DEC: so, it is a good example.
So no, not changing the rules, but maybe clarifying the point. Situations such as the rise of the internet in the late 90s and early 2000s are the anomaly, not the rule.
Operating Systems and Internet search are roughly the same they were ten years ago. 3d accelerator cards changed immensely in the years when 3dfx failed. Microsoft and Google are not in businesses where younger agile companies that read the changing tides better can quickly supplant them.
And that's why they get a thousand chances to turn things around while printing money with their "death spiralling" business.
Oracle, IBM and SAP have the advantage(?) of being heavily business focused from the start, and I don't see them ever die a natural death in our lifetimes. As long as they have the money to outbribe the competition they'll be there, and it will require a small miracle to break that loop.
Anything else they do is a bonus.
Having on premise hosting options for Exchange and all their core services is an example of that, even as they're also pushing for 365 in the cloud. I remember them being earlier than GCP to deal with GDPR and the in EU requirements as well but my memory might be failing.
People use Windows at home and at school and then employers use the same thing because they don't want to retrain people. But the home versions of Windows are becoming so malevolent that they're losing market share. Meanwhile all the things that used to require Windows are becoming web pages and phone apps. You go to a university and it's full of Macbooks and if you see a PC in the CS department there's a good chance it has Linux on it. These are the people who will be choosing what to buy in a few years.
But who cares about the clients anymore, right? They're making money from cloud services. Except their hook is getting people to use Active Directory and Microsoft accounts, which are the things for managing Windows client devices.
It's going to be a while before anybody convinces the accountants to stop using Excel, but for large swathes of employees Windows is no longer relevant, and if you don't need Windows then why do you need Azure instead of AWS or any of the others?
I don't have enough insight, but there's more to it than Windows/Microsoft services tie up. It's clearly not the ease of use for small customers, it could be the contract making, or something else that makes it better deal for businesses beyond just the cost bundling.
For instance I remember Apple hosting iCloud on Azure. And there's a few other big players going with Microsoft, especially retail chains who can't touch anything Amazon, and don't trust Google.
Medium businesses are big enough to want to have their own email domain but not big enough to want to implement their own spam filter, so they turn to the likes of Amazon and Google and Microsoft. Then Microsoft's advantage is they can manage and integrate with your Windows devices. Otherwise they're just doing price competition with every other hosting company. People who aren't even using Active Directory start to wonder why they should pay extra for SQL Server instead of using Mariadb on Linux, and in turn why they shouldn't put that VM on AWS unless Microsoft cuts them a better deal. (Which is presumably what happened with Apple, but offering long-term discounts is not how you make a lot of money.)
Frankly, I see very few people choosing Windows anymore.
Also, another point to add: Microsoft's Intune fleet management system is perfectly capable of managing Macs, and you can use AD as your IDM source of truth for just about anything, including SSO for Google Workspace & ChromeOS devices.
To your last point, Windows Server is a hard requirement in many enterprises because of legacy or procured software that requires it. That is entirely separate from end user computing.
(I used to run end user computing for an F500, and I also ran the Enterprise Apps org at the same time. This was from about 2008-2015, and initiatives including mass migrations aware from MS Office to Workspace, and replacing thousands of Windows laptops with Chromebooks.)
But as a business entity they've been ferocious from the start, and succeeded through sheer perseverance where Google gave up after some tepid tries.
Xbox would have been killed by Google in the first year. Exchange would have stayed in beta for a decade, and Office365 would have had no support if it was in GSuite.
If Google were to find a way, I think they'd need a radically different approach, as I don't see them ever fixing their focus problem.
That said, Google is still printing money and increasing profits and revenues. Nothing like falling profits (or even losses) to create some pressure to focus. DEC would be the example of a company that failed to do so.
But most importantly all the above listed companies with the exception of Meta are those that are heavily ingrained in large companies operations. IBM still provides mainframes, MS has Exchange and Windows domains and is successfully transitioning a lot of customers to Azure, Oracle has their databases and other products, SAP their ERP systems.
Once a non-IT company has their internal IT systems and some legacy working they're going to be very very slow in changing them out if it works, companies that provide those and get a critical are going to have very very long runways compared to regular b2c companies if a significant portion of their revenue comes from this.
Google has Chromebooks that are used in schools and some GCP usage but could that save Google long enough if search revenue was cut into a fraction? And GCP is kinda of an also-ran today, people looking at larger options usually look at AWS(nr 1) or Azure (Windows legacy).
If they could reduce headcount and operating expenditures to 2019 levels without losing that, they would be roughly breaking even without any search. They also have 280B$ in equity to tide them over.
When Google actually sees its business failing, it will have many many many chances to turn things around.
Google continues generating profits out of inertia and a lack of a better alternative.
It went for “don’t be evil” to “a necessary evil” (just until something a little better appears).
I have a strong memory of watching a Jacques Cousteau documentary on sharks and learning that Sharks could become mortally wounded but not realize it because of how their nervous system was structured. As a kid I thought that was funny, as an engineer watching companies in the Bay Area die it was more sobering.
If you have read the article, I think Gomes was right and saw search as a product, whereas Raghavan saw it as a tool for shoveling ads. A good friend of mine who worked there until 2020 wouldn't tell me why they left, but acknowledged that it was this that finally "ruined" Google.
Their cash cow is dying, I know from running a search engine what sort of revenue you can get from being "just one of the search engine choices" versus the 800lb gorilla. Advertisers are disillusioned, and structurally their company requires growth to support the stock price which supports their salary offerings. There is a nice supportable business for about 5,000 - 8,000 people there, but getting there from where they are?
My best guess at the moment is that when they die, "for reals" as they say, their other bets will either be spun off or folded, their search team will get bought by Apple with enough infrastructure to run it, Amazon or someone else buys a bunch of data centers, and one of the media companies buys the youtube assets.
As a chess person, saying "Mate in _" means it's a calculated inevitability. There is no mathematical way out of it.
It is not nearly equivalent to the outside judgement of a company with so many factors — it's just incomparable.
In chess, it's specifically used for saying "even with the best defense possible, you will be mated no mater what in a maximum of X moves." Computers use this definition as well. If Stockfish says # in 6, that means there is an indefensible path to mate available, and with the best play of the opponent will take 6 moves.
It's not a "Mate in X, probably."
But I can guarantee you that Google employees are reading these comments and saying "Wow, this guy is totally full of it, he doesn't know about anything!" and for some of them that thought will arise not from flaws in what I and others are saying, but in the uncomfortable space of "if this is accurate my future plans I'm invested in are not going to happen..., this must be wrong." I have lived in that space with an early startup I helped start, when I went back and worked on the trauma it had caused me it taught me a lot about my willingness to ignore the thinking part of my brain when it conflicted with the emotional part.
You have to do some of that to take risks, but you also have to recognize that they are risks. Painful lesson for me.
:-)
Google today is starting to smell of future financial engineering games, like when a car maker earns more through financing than selling core product.
There is no Plan B, they are just going to break the law until they can’t and there’s zero clue what happens after that.
They sat back and let OpenAI kick their ass precisely because ghouls like Prabakar call the shots and LLM are not a good display ads fit.
The best parallel for Google is Kodak.