One of the standout features of the technology era has been the dominant ‘monopolies’ – from Microsoft in operating systems to Amazon’s ecommerce to Apple’s iPhones. Yet the most dominant of them all has to be Google in ‘search’ driven advertising. And this monopoly now seems to be under threat with ChatGPT and Generative AI in general likely offering compelling alternatives to Google, something that wasn’t considered even possible just a couple of years ago. And it is showing up in Google’s changing priorities – from looking to plough back the supernormal profits from its search monopoly to solve other real world problems using technology to now cutting back on its moon-shot bets to defend its turf.

Very early on, Google set up a company called X (distinct from what Twitter is called now) to house all its incubations.

“From its founding in 2010, the lab captured the public’s imagination with visions of a techno-utopian world it would help invent. In the not-so-distant future, X posited, everyday people might ride to work in a self-driving car (Waymo) and socialize with a powerful computer resting on the bridge of their nose (Google Glass). The most whimsical idea was at Project Loon: A network of high-altitude balloons would beam internet to remote locales, creating educational and economic opportunities for previously disconnected communities.

… Page and Brin had set their sights on hatching the next Google and solving some of humanity’s thorniest problems.”

And then came ChatGPT:
“.. former employees say Google has become less a hothouse of innovation than a cautious custodian of its search empire, which appears to be increasingly under threat. OpenAI’s ChatGPT unleashed a new class of software that can succinctly answer questions and perhaps obviate the need to search on Google. This prospect set off a panic at Google’s headquarters that has transformed the company. When Brin turns up at work now, he’s more likely to be writing code for Google’s AI projects, far from the Xplex

… the company began reining in cushy corporate perks and conducting rolling layoffs. Google’s beloved 20% time, in which employees can devote one day a week to passion projects, is technically still on the books, but rank-and-file employees say they have little freedom to indulge in it.”

Ironically its threat was in some ways seeded by itself:
“… the uncomfortable truth is that ChatGPT was built on a discovery that came partly out of work at X, when AI still sounded like sci-fi. As Alphabet became frozen with fear, OpenAI emerged as an innovation hub, with a research-driven culture instilled by former Googlers. But OpenAI, as its name implies, is only focused on AI. The era of freewheeling invention lavishly funded by a tech giant that X embodied is largely gone. Amazon is culling dozens of projects, Apple gave up on building a car, and Meta shut down some of its hardware efforts.”

The article gives reference to Xerox and how it got disrupted despite its innovations:
“Some of Silicon Valley’s biggest breakthroughs came from a company that made copy machines. Xerox’s research-and-development lab in Palo Alto invented ethernet, the graphical user interface and other pillars of personal computing. But Xerox PARC failed to commercialize most of the technologies, allowing Steve Jobs and others to do so first. The rise of Apple Inc. and fall of Xerox Corp. became a parable about big companies failing to recognize the value of their own inventions.”

Google’s founders very well appreciated this parable:
“From Google’s early days, Page and Brin made a point of funneling profits from their search engine into businesses that had nothing to do with it. Out of this effort came Gmail and Google News. They institutionalized this philosophy with X…”

Google’s backpedalling on X contrasts with Microsoft’s growing dominance under Satya Nadella – from taking on Amazon Web Services in cloud to leading GenAI – remarkably sustaining its leading position in an industry inherently prone to disruptions. However, few people will rule out Google’s return to dominance just yet.

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