The Intersection: Google’s (Search) Engine Check

Last week, #Google parent company #Alphabet lost about $100 billion in market value after its artificial intelligence chatbot #Bard –– hastily unveiled after OpenAI‘s #ChatGPT had captured the world’s imagination –– fell flat.

It’s easy to read this as a classic story of a big, slow-moving Google Goliath being beaten by OpenAI, the swift, agile David.  

Perhaps there is some truth to that. But it’s worth asking what really kept Google from being first to market with a disruptive chatbot. Was it really just a matter of inertia that comes from being so large? Was it a considered decision that was undermined by a competitor’s bolder moves? Or were other factors at play?

Here’s an alternative story that merits consideration..

For the past decade, Google’s investors have largely wanted the company to be the world’s best advertising company and maximize the profits of its ever-churning, ever-growing ad machine. They indulged Google’s management in “side bets” on radical technologies as long as the core advertising business continued to grow robustly.

Governments wanted the company to rein in some of its competitive practices, data collection policies and more. 

Societies around the world were growing increasingly uneasy with the trade-off of getting free, awesome products but at the expense of allowing an omnipresent corporation into the deepest parts of their lives through their data.  

Within the company itself, Google employees have been torn between the desire to remain a Mecca of creativity and innovation, while also protecting their stock options and perks. And, a vocal group of engineers inside the company had warned about some of the risks –– misinformation, deep fakes, security threats –– that needed greater attention before releasing LLMs into the world, driven by commercial considerations.

These may be simplifications, but what they point to is the fundamental challenge a company faces when the demands of its stakeholders sharply diverge.

In that situation, decision making becomes incredibly difficult. Imagine the team working on Bard and those overseeing them. Do they pour money into that project, knowing that investors want resources dedicated to the ad business? Do they race the innovation forward as fast as the engineering will allow, knowing that governments are no longer in a “permissive innovation” mindset and may be extremely critical of a chatbot that is perceived as promoting misinformation, or profiting off the work of publishers, or other such issues? Do they expect society to embrace another major Google product into their lives, especially one as “creepy” as a powerful new AI? 

From this perspective, one can see the real struggles the company may have had to work through on its journey to get to this past week –– and it is perhaps unsurprising that the product it launched underwhelmed. 

To be sure, nobody needs to pity Google. Nor is it necessarily a bad thing that a company of its scale slowed down a bit and took into consideration not just what it could do, but what it should do. 

But this story does have a lesson: for companies trying to build for the long-term, it’s imperative to  keep an eye on all your stakeholders and aim to keep them aligned as much as possible. Pushing off these periodic engine checks doesn’t just lead to near-term issues and crises; it can also set the stage for long-term competitive disadvantage.