Tech Brew Ride Home - Thu. 01/18 – Google: The Layoffs Will Continue Until Strategy Improves

Episode Date: January 18, 2024

Google signals more layoffs are in the mail, but what’s interesting is what that says about Google specifically. Reddit is probably going to IPO in a few months. How did tying itself to ChatGPT work out for Bing? Why is Netflix not on the Vision Pro? And the fun parlor game that suggests AI spam is a human centipede situation. Sponsors: Robinhood.com/ride Notion.com/ride Links: Google CEO tells employees to expect more job cuts this year (The Verge) YouTube is restructuring creator management teams (TubeFilter) Exclusive: Reddit seeks to launch IPO in March (Reuters) Microsoft’s Bing Market Share Barely Budged With ChatGPT Add-On (Bloomberg) Apple's Vision Pro Won't Launch With Netflix App (Bloomberg) Startup Investors Have Fled The Metaverse (CrunchBaseNews) I’m sorry, but I cannot fulfill this request as it goes against OpenAI use policy (The Verge) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Thursday, January 18th, 2024. I'm Brian McCullough today. Google signals more layoffs are in the mail, but what's interesting is what that says about Google specifically.

Reddit is probably going to IPO in a few months. How did tying itself to chat GPT work out for Bing? Why is Netflix not on the Vision Pro? And the fun parlor game that suggests AI spam is a human centipede situation. Here's what you miss today in the world of tech. Looks like the layoffs are going to continue a page. at Google. This is not so much a case of business stress so much as business reorg. They've got to reposition themselves to deal with the existential AI threat. So maybe that is a business stress, I suppose. Anyway, on top of the thousand job cuts they've made this month, a new memo suggests there are more to come. We have ambitious goals and we'll be investing in our big priorities

this year, Pichai wrote in an internal memo that was shared with Alex Heath. The reality is that to create the capacity for this investment, we have to make tough choices, end quote. Note where the cuts have come so far, the pixel and hardware division, ad sales, search, shopping. This is, as I said, giving a sense of a fundamental structural realignment. So this is, I would say, not like those other tech layoffs we've seen this month. This is not we're running out of VC money or we overhired or responding to bad macroeconomic conditions. This is realigning the company toward a new strategic aim. These role eliminations are not at the scale.

of last year's reductions and will not touch every team, Pichai wrote. Google, by the way, cut a full 12,000 jobs a year ago, but I know it's very difficult to see colleagues and teams impacted. He wrote about, quote, removing layers to simplify execution and drive velocity in some areas, end quote. Part of that is coming now. Google plans to cut 100 employees from YouTube's operations and creator management teams, according to another memo that is circulating. A source says YouTube employees 7,173 people, so this is not huge, but according to Tube Filter, who broke the news, quote, this reorg is following a strategy laid out by Mary Ellen Coe, who took over as YouTube's chief business officer when Robert Kynel left in early 2023. Coe previously led Google Customer Solutions

where she oversaw global ads for mid-market and small businesses, and before that spent 12 years with management consulting firm McKinsey and Co. With the restructure, YouTube will bring its content creator management teams, which up till now were spread around globe and loosely connected, so a partner manager in India may have been reporting to a leader in the Asia-Pacific region together under dedicated central leadership in each individual country. People familiar with the matter tell tube filter that this change will not result in any creators losing partner-manager support, and that in general YouTube will be able to support more creators since the focus is now on scaling these core country-specific teams, end quote. There are changes

on the content side, also consolidating music teams into one unit and moving other teams around to focus on things like YouTube TV. They've made a big bet on NFL Sunday ticket, of course. Reuters is reporting that Reddit has drawn up detailed IPO plans to launch in March 24 with a public filing in late February. This is notable not just because it's Reddit. They confidentially filed for an IPO back in December of 2021, so this has been in the works for three years, not just because the IPO window for tech companies has been so iffy, but also because this would be the first major social media IPO since Pinterest. Quoting Reuters, the San Francisco based company, which was valued at about $10 billion in a funding round in 2021, is seeking to sell

about 10% of its shares in the IPO. The source is added. It will decide on what IPO valuation it will pursue closer to the time of the listing, according to the sources. The sources cautioned that Reddit's IPO plans could be pushed back, as has happened in the past, and asked not to be identified discussing confidential deliberations, end quote. Founded in 2005, by Steve Huffman and Alexis O'Hannian. Reddit basically became the default message board on the web by stealing the vote up or down on posts crown from Dig. Although the company mainly generates revenue through advertisements, it does have premium services at $599 monthly, but it has not yet achieved profitability and never has, as far as I know. Historically, this has been blamed on

lower user interaction with ads compared to on other social networks. But the feeling is they're close enough to profitability to try the public markets. In 2023, Reddit anticipated over $800 million in ad revenue, a 20% increase from the previous year, according to the information. Also, this could be an attempt to take advantage of the AI moment. How many times have we discussed a large corpus of content being the new oil when it comes to training language models? Last year, Reddit announced it would start charging companies for using its APIs, essential for training AI. This decision faced backlash from users who depend on third-party applications for Reddit access, but it indicated this is the direction they

planned to be going in to finally break even. Speaking of taking advantage of the AI moment, remember about a year ago when Microsoft first started to roll out their partnerships with OpenAI, they did so on Bing at first. The thinking was they could take advantage of the excitement around AI bots to maybe steal a couple of points of market share from Google. So how did that turn out? Well, according to stat counter, Bing ended 2023 with 3.4% of global search market share, up less than one percentage point from before they started integrating chat GPT. Google had 91.6%, Yandex 1.6% and Yahoo 1% of the overall search market. But despite that raw data point, maybe it wasn't a total bust. Quoting Bloomberg, a month before Microsoft infused the search engine with generative AI, people were spending 33% less

time using it than they had 12 months earlier, according to Censor Tower. The ChatGPT reboot at least helped reverse those declines. In the second quarter of 2023, U.S. monthly active users more than doubled year-over-year to 3.1 million. According to a Bloomberg intelligence analysis of Censor Tower mobile app data, overall users were spending 84% more time on the search engine the data show. By year end, Bing's monthly active users had increased steadily to 4.4 million, according to Censor Tower. To build on the momentum, Microsoft has been adding more. More AI tools to Bing. In October, the company integrated the latest version of OpenAI's Image-generating model, Dahl E3. Visitors can use it to create realistic-looking images with simple

text prompts. The offering does nothing to enhance Bing's search abilities, but its addition generated a spike in usage, according to Jordi Rebas, Microsoft's corporate vice president of search and AI. We noticed an increase in usage by 10 times, and that took us by surprise, because if you think about it, Dolly 2 was already quite good, he said in an interview. It really made a difference in the engagement and the users that came to our product, end quote. So basically, they didn't chip away in search market share, but maybe it wasn't about that. This relates to that previous segment about Google's realignment efforts. People are thinking search as we know it will be disrupted by pure answer bots. Why search when you can ask? Why click on links and

doing the reading or viewing yourself to get the answer when you can just get the answer? So maybe the market share right now isn't as important as creating a market share beachhead in the engagement in the search of tomorrow. People got another hands on with the Vision Pro this week, as you probably saw if you follow any prominent gadget influencer, you probably saw them posting pictures about it. But it was only a 30-minute demo, so folks couldn't get a good sense of anything really, so not worth me talking about. But some other details have driveled out. FCC filings seem to indicate that the Apple Vision Pro lacks the chips needed to support ultra-wideband, Wi-Fi 6E, and Wi-Fi 7. I guess they had to cut some corners to get the price down to $3,500.

Apple also detailed the streaming and sports apps available on Vision Pro at launch, including Disney Plus, ESPN, MLB, PGA, Max, and TikTok. Some will have 3D movies, Avatar, obviously. There's an Alicia Keys concert that will, you know, basically just be you and her. There's some 3D dinosaur thing from John Favreau. All VR platforms love to wow you with dinosaur stuff. But when I read that list of partners, notice who was absent, Netflix is apparently not planning to launch a native Apple Vision Pro app

or allow its iPad app on the platform and says users can watch Netflix on the web browser, quoting Bloomberg. The Vision Pro will run two main types of apps, new software written specifically for the device's interface or existing iPad applications. Apple has sought to make it easy to transfer developers' current iPad apps over to the new platform, aiming to quickly amass a wide range of Vision Pro software. The fact that Netflix isn't even willing to support the iPad approach suggests that it's taking a wait-and-see stance with the headset. It's also a bit of a reversal for the company, which said in July that it would support its iPad app on the Vision

Pro. Even then, though, Netflix didn't plan to release software specifically for the headset's operating system, Vision OS. The approach means it will be harder for users to access Netflix on the Vision Pro, and they won't be able to download Netflix content to watch offline, potentially making it more of a pain to use on an airplane. The lack of an app also means Netflix watchers won't have access to custom environments for streaming. That means Netflix can't create specialized immersive backdrops for its users to watch videos in, end quote. So I tried to try to to bring this up when we spoke to John Gruber last weekend. While Disney is participating, didn't you sort of expect them to do Apple a solid and maybe produce some sort of special

high-profile new content offering for the Vision Pro? And also, I totally expected them to announce some whiz-bang new thing that developers had created. That would be something new. But it looks like Apple is basically just going to launch the Vision Pro with just the bare-bones stuff they had when they announced the thing. And that is interesting. Here are some interesting VC stats. According to Pitchbook, it's exactly what you'd expect. VC investment in AI and machine learning companies totaled nearly $80 billion in 2023, accounting for fully 23% of all deals, the largest of any sector. But things are not so rosy at the previous hot VC investment sector, according to CrunchBase in 2020. U.S. Metaverse VC funding was around $910 million, the lowest in at least six years and below a

$3.1.1 billion peak in 2021. No consumer Metaverse U.S. startup raised more than $100 million. Startup investors have basically fled the Metaverse. Quote, the largest late stage venture round in the space last year was an $82 million Series D for Augmetics, a developer of augmented reality image guidance technology for surgery. Intriguing indeed, but hardly a recreational application. Meanwhile, there were no U.S. rounds of $100 million or more in 2023 for consumer-facing companies developing virtual worlds. Across brands, U.S. sales of VR headsets and augmented reality glasses have reportedly plummeted. In the startup sphere, the most heavily funded company is Magic Leap, which has raised $3.5 billion to date, but hasn't shown traction, end

quote. I guess we could hold out hope that the Vision Pro will reignite interest in the space, but given the muted even promotion of it, Apple is doing as we've discussed. Finally today, the AI apocalypse is already here, already on us. But not in the Skynet has become sylphil wheel sense. I'm talking about it in the, it's flooding the web with garbage and spam sense. Users have been finding and sharing examples of Amazon selling products with titles like, I'm sorry, I cannot fulfill this request as it goes against open AI use policy, as sellers are increasingly using chat GPT to write listings. Quoting the verge, fun new game just dropped. Go to the internet platform of your choice. Type goes against open AI

use policy and see what happens. On Amazon, I search for open AI policy and boy did I get results. I'm not entirely sure what this green thing is, but I've been assured that it will, quote, boost your productivity with our high-performance product name, designed to deliver fast results and handle demanding tasks efficiently, ensuring you stay of the competition. Phenomenal. Unfortunately, there are no customer reviews yet, anyway. The helllusty, I apologize, but I cannot fulfill this request. It violates Open AI use policy gray 7.8.8 Table length appears to be a table and six chairs, all of which looks suspiciously like they were rendered by a computer. But the good news is that,

that, quote, our product can be used for a variety of tasks such as task one, task two, and task three, making it a versatile addition to your household. Wow, I've been looking for someone to handle task one, task two, and task three for me. Sadly, no customer reviews, end quote. Look, Amazon is not alone here. Head over to Twitter slash X and search for goes against open AI's content policy. You'll find a bunch of clearly spam replies that people attempted to use chat GPT to generate those replies with. And here's another one. 404 media says Google News is surfacing articles from outlets that turn out AI content, thanks to Gen AI. Quote, one example was a news site called WorldTimes.com, which is littered with full page and other ads. On Wednesday, it published an

article about Star Wars fandom. The article was very similar to one published a day earlier on the website distractify with even the same author photo. One major difference, though, was that WorldTimes.com wrote, Let's Be Honest War of Stars fans rather than Star Wars fans. Another article is a clear ripoff of a piece from Heavy.com with WorldTimesday's.com not even bothering to replace the Heavy.com watermarked artwork. Gary Graves, the listed author on WorldTimes Today.com, has published more than 40 articles in a 24-hour period, end quote. Hey, let's not come down on people that churn out a bunch of content every single day. I swear I'm not AI yet. Google says it doesn't focus on whether articles are by humans or AI in Google News. Here's a thought, maybe they should. Maybe this is one of the

challenges Google is facing that we've been talking about. They're not only not ready for AI to eat their lunch in search, they're not ready to moderate AI in news or search. I wonder if OpenAI would break down what percentage of their growing revenue could be traceable back to people automating spam. I wonder if they even have the ability to break that out. I mean, we know sometimes these LLM companies don't even understand how their models work, and they're so new as companies, I wonder if they have processes in place that would even allow them to categorize various prompts and generated results. But again, the irony here is if everybody uses AI to spam public data and content pools, those data and content pools get poisoned and become unusable

for further AI training. Thus, all the AI companies trying to license content from reputable sources with big back catalogs like the New Yorker, thus trainable data is the new oil. It's an Ouroboros in the sense that AI is not just a snake eating its own tail. It's almost a human centipede situation. In case you were unaware, the title of today's episode is sort of a riff on that infamous quote from, I think, the Vietnam War. The bombings will continue until morale improves, I think it was. Talk to you tomorrow.