Google, $GOOGL, lost its way

Later that day, OpenAI unveiled Sora, a tool capable of generating videos up to 60 seconds long based on text prompts. The response was immediate and enthusiastic. CEO Sam Altman took prompt requests from X users and shared the results in real time. Words like "eye-popping" and "shockingly powerful" circulated, while researchers pondered the tool's implications for Hollywood and its potential for deepfakery.

However, days later, Google found itself in a scramble to explain why its image generation tool produced racially inaccurate depictions of historical figures. Google attributed the issue to Gemini's cautious approach, stating that the tool "overcompensated in some cases, and was overly conservative in others." Industry insiders raised concerns about Google's corporate culture and called for CEO Sundar Pichai's accountability.

Google, now 25 years old, has weathered through five presidents and two major market crashes, making it roughly two centuries old in tech years. Its cofounders, once hailed as boy wonders, now hold emeritus executive positions. The company changed its corporate name from a futuristic, intellectual-sounding word to a term most learn by age 3. However, recent years have brought new challenges: reduced risk tolerance, innovation crackdowns, layoffs, and a narrative that its flagship products like search and Gmail are declining. These factors have fueled the perception that Google, once the envy of Silicon Valley workplaces, has become, ironically, boring.

When Google went public in 2004, Larry Page and Sergey Brin emphasized that theirs was not a conventional company and that they did not intend for it to become one.

Despite this, 80% of Alphabet's revenue still comes from advertising, mostly from simple text ads that have adorned Google's search results page since the early 2000s.

In fact, few of Google's recent products have achieved notable success. Many have been discontinued, including augmented reality glasses and a brief venture into gaming. Even its core products have faced criticism, with users long lamenting — and recent research confirming — a decline in the quality of Google Search results. The introduction of AI only threatens to exacerbate this issue.

For years, Google employees were encouraged to pursue side projects unrelated to their main responsibilities — a practice known as "20% time." Some of these projects eventually transitioned to an internal incubator called Area 120, a nod to a joke among employees that 20% time had evolved into "120% time."

In 2021, Google ended a policy that allowed employees to temporarily move to other Alphabet companies, known as "bungee" assignments. In 2022, it significantly downsized Area 120, discontinuing several projects unrelated to AI and laying off most of the staff. A Google spokesperson noted that employees are still encouraged to pursue other projects and highlighted innovations like AlphaFold and quantum computing, as well as products like Magic Eraser, as examples of ongoing innovation.