Big Technology Podcast
00:10:07 · Ranjan Roy, Alex Kantrowitz
[00:10:07] S1: Yeah. No. I think this will happen across the board. I think it was a year ago. When did we say the web isn't dead? It is in secular decline. [00:10:17] S0: That's Every time... By the way, every time someone says last year, for me, it always means April because people can't, like, comprehend the fact that we've gone so far. Technology has developed so far from where we were in January to where we are now. They always say last year, and last year always means March or April. So I think we probably said it in March or [00:10:35] S1: Wait, wait. You're like a six month year guy? I'm You're not saying six months? [00:10:41] S0: I... I'm... Yeah. I'm saying, yeah. We're basically living in a world right now where every six months has a year's worth of activity. You don't think so?
00:10:41 · Alex Kantrowitz, Ranjan Roy
[00:10:41] S0: I... I'm... Yeah. I'm saying, yeah. We're basically living in a world right now where every six months has a year's worth of activity. You don't think so? [00:10:48] S1: I'm gonna... Okay. From a technology standpoint, I agree. I mean, I don't even remember last month or two months this summer that feels like ages ago, but but... Alright. Let's get back to... Especially Reddit. I think this was really interesting because why Steve Steve Huffman made a really good point that Google is pinging and crawling Reddit more than ever, yet sending less search traffic. It's declining dramatically. What is that saying? That Google is extracting information from every website out there, the Reddits of the world, but no longer that deal. Remember, the original deal why publishers, why everyone posting a website, let Google crawl their website was to hopefully that will drive traffic and it did and that was the entire foundation of like the economics of the web for decades. So I think that fund... This Reddit earning call is really interesting because they basically are recognizing finally that that is completely broken.
00:11:51 · Alex Kantrowitz
[00:11:51] S0: But it's it's more than that. Again, I'm trying to make the point here. And first of all, I should caveat. 12% growth when you have a business worth tens of billions of dollars, Google made 63.3% on search and other advertising in the third quarter. Sorry, 63,300,000,000. That's huge. And to grow from a 50 something billion base, 12% to $63,000,000,000 we shouldn't be sneezing at it just because they didn't do 15. But I do think, and that's the reason why people are wondering now, is there was a projection that they would hit 15, they hit 12. And why is that? They talk to us about how some of these AI overviews are going to cut into revenue. And searches are probably up, but I bet some of that conversation, the AI overviews counts. But more than this, it's possible to have a search business, users need a click out. And this is what I'm saying. It's not necessarily the bargain is gone, which it is. But the bigger issue is, is Google training people not to Google and just to go direct?
00:12:51 · Ranjan Roy
[00:12:51] S1: I I still don't think... I don't know. I... Again, as a heavy user of Reddit and still believer that it is one of the best places on the Internet to actually, like, find information and have human interaction, I am kinda happy because honestly, would rather... There was like this brief period where Reddit was driving so much AI related traffic that every business out there wanted to post on Reddit just to try to optimize for GEO. I'm kinda glad that that's... We're moving past that. But I still feel the behavior of going directly to website is gonna be a relatively limited thing. But as I say that, maybe again in the shopping world where I spend a lot of time, it could the more Google disintermediates the actual and it gives less control and value to the end business. They will push to not worry about Google. Already I can tell you, the idea that search traffic is the lifeblood of a business everyone has given up on. So like it's still kind of now one channel whereas before it was the lifeblood in a big way. So I agree but they have to. To Sundar's credit, innovator's dilemma and they're they're... They've chosen their strategy. So do you think it's the right one, though?
00:14:08 · Alex Kantrowitz
[00:14:08] S0: Right. Yeah. I mean, the bet is basically that it it... Well, this is kind of like what we've been talking about in the past that Silicon Valley is making this all in bet... All in, literally, unlike an unproven new technology, which is, I guess, it's what they do. I mean, I guess I wrote a book called Always Day One, so I should be the one preaching this more than anyone. But to be relevant in tech is this constant cycle of reinvention where you cannot hold on to what got you to the dance for too long. Otherwise, there's going be a new dance and you're not going to be invited. And so what I think is happening across Google, Amazon, all these companies Meta for sure maybe not Microsoft, we'll get into that is that these companies believe so strongly that AI is going to change the interface that they have to be like. You're right, it's innovator's dilemma and rather than be a relic of time we're going to try to go for what's coming in. But in the near term, there are going to be rewards to those who aren't so good at it. Listen to this. This is an interesting reaction to the earnings from Steve Howe, an economist. He said, Interesting idea. Everyone assumes Google will win the AI race a complete 180 from a year ago. I don't know if it's everybody, but they have the number one model with Carbon, their new model they released this week, which is like number one on the benchmarks. And he writes, Yet winning AI may not be commercially good for Google as they haven't figured out how to target ads well within AI mode, while Meta is pulling away on ad revenue despite lagging on LLM. And then he drops this chart. And the chart is amazing because in 2024, the leader in ad revenue was Google. In 2028, the leader in ad revenue is Meta, like by a good margin. And Amazon has gone effectively from kind of a distant third into a company that's now challenging Google for two, although still somewhat behind. But this is interesting, the fact that Meta, which has struggled with LLMs and hasn't really made that big shift to change its entire experience to make it AI, it's pulling in the ad money, whereas Google, which is making this move, has fallen behind. What do you think?
00:16:21 · Ranjan Roy, Alex Kantrowitz
[00:16:21] S1: No, I think that's a really good point because if you think about it, Google's ad revenue, their golden egg, golden goose, Please don't call a golden egg. Think it's a golden egg. I think the goose lays the golden eggs. I don't think the goose is actually made, like, has a golden sheen to it. No. [00:16:42] S0: I'm gonna add to Google's Google's search queries right here, and I'm searching it. So [00:16:47] S1: Alright. So while you're searching, I think [00:16:49] S0: Oh, oh my god. Yep. The goose Ace. This is from AI AI Overviews, Ace was favorable. The goose and the golden egg, a classic story about a greedy farmer who kills his goose, which lays a single golden egg every day hoping to get all the gold at once only to find nothing. [00:17:04] S1: So you just both were proven wrong, and you provided no value to the external web ecosystem and received that information by some poor publisher that actually just put that information with their heart and soul out onto the web and it just got AI overbued. [00:17:23] S0: No, you're wrong. The story comes from read.gov. It's a government site, so I've actually just convicted them by brainwash the masses type of campaign for [00:17:33] S1: No, no, this is the future of the web. The only publishers that will be live are government. [00:17:38] S0: But that's bleak and that's possible. I mean, seriously, maybe that's what happens.