A Twenty Year, Trillion Dollar Detour (Tech & People vol. XI)
What Chat-GPT Really Means for Google
The venerable New York Times says that Google has declared code-red based on the rise of Chat-GPT (link). The theory of the existential threat they sum up as thus:
For more than 20 years, the Google search engine has served as the world’s primary gateway to the internet. But with a new kind of chat bot technology poised to reinvent or even replace traditional search engines, Google could face the first serious threat to its main search business. One Google executive described the efforts as make or break for Google’s future.
So in other words, Google has built the world’s second best business in history (after iPhones) on the premise that you come to google.com, search for something, and click some ads related to it. Now you will go to some other site (presumably https://openai.com/blog/chatgpt/), start asking all of your questions there, and Google will die slowly like Kodak or something.
I’m more than a little skeptical that this doomsday scenario is the future. It doesn’t seem like the stock market is buying either, since Alphabet is still a trillion dollar market cap company as I write this (unlike some car companies headed by part time megalomaniacs) so I would be inclined to file this under click-bait and move on with my life, except it’s a great opportunity to explain a little bit the DNA of this company once known as Google, where I worked for half a decade half a decade ago.
So settle down with a cup of coffee and an iPad under some comfy blanket, and let me tell you some Google stories for the holiday season.
Story #1:
When I first joined the GOOG, just as I was getting my bearings and understanding where the coffee machine was, maybe a week or two into my role with Google+, the brilliant Clay Bavor who was then a Group or Director of PM working on Ads out of the Zurich office, came to visit us in Israel. We got talking about some things and I casually mentioned how when I search Google, I don’t see the ads.
Clay stopped me, astonished: “you don’t see any ads? maybe this is some bug, you should file it!” and I said, no that’s not what I meant. The ads were just so irrelevant and useless that my mind had trained my eyes to not even register that they are there, as I was using Google dozens of time a day for various searches, and finding my links in the organic results.
Now the great man was even more astonished, and people around us at lunch were kind of giving me looks indicative that i should shut up before I do further damage to my career. So I listened intently while Clay explained that
his experience was that the ads were super high quality and -
very frequently the first link he clicked, the way he got his answer to the search was the ad.
I nodded, in the same way that I would have nodded if he had said that he was in fact an alien from the planet Jupiter come to meet with a time-traveling Plato. It seemed so far-fetched. I thought maybe it was a USA and Israel thing. We went on to talk about sports.
On to Story #2 —
This one is not from my own personal experience but is part of the public record. However many people realize it, the original business model of Google was not Ads. Here’s an excerpt from the relevant episode of the Internet History Podcast:
There was one important trait that Google shared with the dotcoms: it wasn’t making very much money. It’s somewhat forgotten, given what would come later, but Google existed for several years without much of a business plan. The vision Larry and Sergey had sold the Venture Capitalists on involved a three-pronged strategy. First, Google would license its search technology to the major portals. Second, the company would sell its search technology as a product to enterprises. And third, there were some vague promises about selling ads against searches on its own website.
[BTW for us Israelis, there is a funny moment a little bit later in the story where Israeli internet pioneer Yossi Vardi makes a cameo appearance and tells the google founders to put their ads on the right hand side of the results, but that’s for another day]
I’ve heard different versions of this story told internally years later. One version (which is the one I believe) says that Larry never wanted any ads at all anywhere near the Search Results Page (SERP). Larry hated ads, wrote a whole document about sucky misleading ads, which to be fair were prevalent back then (and still). The plan was to sell search technology to power organizational intranets. Yes. That was the plan. Imagine what the world would look like.
Of course, that’s not what ended up happening. Google copied some ideas from a forgotten company called Overture, invented the formula for charging for impressions while tricking people into thinking that they were being charged for clicks, and was off to the races. Larry and Sergey convinced themselves (and employees like Clay) that their ads were good and relevant, and built an empire that is still chugging along today.
But just remember- that was never the plan.
Story #3 time!
My favorite ritual while I worked at Google by far was TGIF. I’m told this had been discontinued now, but back then the founders would drop in almost every week at Charlie’s cafe, and shoot off their mouths talking about a bunch of stuff. This gave every employee the chance to glimpse directly into the thoughts of the founders. Many memes were shared by all. It was so much fun. Surprisingly little leaked out. Those were the days.
Anyway, there was this period of time around 2011 to 2013 where Larry was repeatedly talking about how Google Search sucked, and was entirely not up to par to his original vision of what Search should do. He would give examples all the time. He complained that the search “restaurants in San Francisco”, which he was running logged-in, was returning him steak joints (Larry is famously Vegan). He kept talking about why Google even waits for him to search a query when we have the data to know he needs something without asking. He would talk about how we must push search beyond “10 blue links” and just give people the answer. And this was not idle talk. With the introduction of the Google OneBox, Google started more and more to just give answers to questions. Larry was frequently demoing these kinds of experiences at TGIF. The very thing that got Google in trouble with regulators in defense of the TripAdvisors of this world, was this push to just give people answers. And yes, that had commercial sides too. But that comes after the use experience.
The point of all of this is that if you think Google is somehow caught off guard and rushing to hire McKinsey consultants to figure out how to deal with the menace of chat GPT, then you are all wrong, an you don’t understand Google one bit. Google may in fact be a fat incumbent sitting on a cash generating legacy business serving ads. But that is not how it *sees* itself. That is not how it thinks of itself, and it’s not the company DNA. The company DNA is that they are the innovator, not the incumbent with the dilemma. They’ve got Large Language Models. They’ve had AI long before it was cool. In their own minds they’ve always been working on a magical search that simply answers every question perfectly all along. The current experience familiar to billions today has just been a twenty year, trillion dollar detour. If any one is going to now build the omniscient search AI, it will sure as heck not be OpenAI. It will once again be Larry. It has been Larry all along.
And as for the ad money? maybe new ad formats and promoted answers will work. maybe not. worst case, Google could always go back to the original plan and power internets.