Google’s search dominance made it complacent—until now

As ever, more details are promised soon—probably at next month’s Google I/O developer shindig, given the reported timing of the public starting to gain access to the revamped Google Search. But for now, there’s another big takeaway to be found in there, regarding the sense of panic within Google over the speed at which the generative A.I. revolution is taking place.

We’ve had a glimpse of this before. After ChatGPT’s seminal launch last year, it was reported that someone in Google management declared a “code red” owing to the implications for search rivalry—CEO Sundar Pichai subsequently said he wasn’t the one to deploy that phrase, but he didn’t deny it happened.

Now we learn that Google was again blindsided by Samsung reportedly considering whether it really wanted to renew its $3-billion-a-year contract to keep Google Search as the default search engine on its mobile devices—or to instead switch to Microsoft’s A.I.-happy Bing, which was until recently more of a punch line than anything else. 

According to the Times piece, Googlers “reacted with emojis and surprise” when asked to knock together a pitch that might persuade Samsung to stay on board, with one saying, “Wow, okay, that’s wild.” That right there is the definition of complacency. 

I can certainly understand what’s behind it—Google’s global market share has been at 90% or more since the late naughties—and I also appreciate that Google’s reluctance to go all in on generative A.I. is partially motivated by a desire to keep search reliable and safe. But there’s clearly a degree of organizational inertia involved when employees are shocked at the suggestion of a key business partner reevaluating the competition. 

I guess that’s what happens when you’re (allegedly) used to buying market dominance. Wall Street certainly sees cracks forming in the status quo, with the NYT report knocking Alphabet’s share price by more than 3% today. But on the other hand, it sounds like Google has been effectively shaken out of its torpor, and I for one am keen to see how its services evolve in the near future.

P.S. It was a shame not to see SpaceX test the full Starship-plus-Super-Heavy-rocket bundle today, but them’s the breaks. Better luck later this week.

Want to send thoughts or suggestions to Data Sheet? Drop a line here.

David Meyer

Data Sheet’s daily news section was written and curated by Andrea Guzman. 

NEWSWORTHY

Tesla factory workers call out bonus pay cuts. Workers at Tesla’s Shanghai plant saw staff bonuses cut after an employee died in a mechanical accident ​​in the plant’s welding workshop in early February. Two of the plant’s employees told Reuters that management cited a “safety incident” when questioned about the reasons for the bonus reductions. Workers vented about the docking of the bonus payments online, calling it “malicious,” with another saying they’d resign and look for a job at a Chinese rival like BYD.

Meta is trying to lure in advertisers. Meta is offering advertisers sweeteners, including discounts of up to 25% for those spending a certain amount testing ad products on Reels. Meta is also allowing ad agencies to stay at the spending level they committed to last year rather than requiring increased spending as is typically required. The Information reports that Meta has previously offered discounts to encourage the use of new ad products, but that this one is particularly large, and comes after its first-ever drop in ad sales last year. 

Sega is buying Angry Birds developer. Rovio, the mobile games developer behind Angry Birds, is being acquired by Sega, the video game company known for Sonic the Hedgehog. The approximately $775 million deal is expected to close by the end of September. Sega will support Rovio as it expands its platform outside mobile gaming, it said in an announcement. It also plans to use Rovio’s expertise to bring Sega’s current and new titles to the mobile gaming market. 

SIGNIFICANT FIGURES

1%

—Percentage of time that the Russian government claims its manipulation of social media and search engine rankings is caught. The Russian operators of the accounts noted this figure in a document that circulated on Discord, and while it has drawn alarm, some experts believe it is exaggerated or misleading.

IN CASE YOU MISSED IT

BabyAGI is taking Silicon Valley by storm. Should we be scared?, by Jeremy Kahn

Netflix apologizes for ‘Love Is Blind’ live reunion outage and releases recording of episode that ‘did not turn out as we had planned,’ by Nicholas Gordon

Spotify is shutting down Heardle, the song-guessing game it bought last summer, by Chris Morris

ChatGPT and its ilk are making it easier for remote workers to secretly hold two or more full-time jobs, by Steve Mollman

Yishan Wong’s résumé: From mopping floors at Burger King and a ‘hell boss’ at PayPal to running Reddit—here’s how he became the CEO he is today, by Orianna Rosa Royle

BEFORE YOU GO

Zombie bird drones in the sky. What if you took a dead bird and made it fly again by equipping it with drone gear? It sounds like something out of a horror movie, but researchers at the New Mexico Institute of Mining and Technology think that turning taxidermic birds into drones is a good way to study flight efficiency. The researchers came up with the odd plan after their experiments with mechanical birds weren’t producing the results they had hoped for. So they created a zombie bird drone.

“If we learn how these birds manage…energy between themselves, we can apply [that] into the future aviation industry to save more energy and save more fuel,” Mostafa Hassanalian, a mechanical engineering professor who is leading the project, told Reuters. Now that a prototype is completed, researchers are working on how to make the drone fly longer than 20 minutes and plan to conduct tests among living birds.