8 ms·

I too believe the company has entered a phase of stagnancy or even decline. In fact, so much that two weeks ago I put my money where my mouth is by selling $1M

by mrb 3y ago

I too believe the company has entered a phase of stagnancy or even decline. In fact, so much that two weeks ago I put my money where my mouth is by selling $1M worth of GOOG I was given as part of a stock grant when I was hired by Google in 2014. (I promptly reinvested this capital in a generic S&P 500 index fund.) From 2014 to mid 2015, when I quit, I found Google had a great engineering culture and I loved my time at the company, but I was having gut feelings of the start of a decline. I saw engineering hires who weren't so skilled. I saw Larry and Sergei seemingly lack the spark in their eyes when giving candid answers at our TGIF meetings. I saw a buildup of red tape and overhead. Then, long after quitting Google, more problems crop up. In the last year or so I saw a noticeable decline in the quality of Google search engine results. In the last 2 months I saw an even more noticeable decrease of the quality of Gmail's spam filters (today I get ~10 spams daily out of ~50 legitimate emails.) I keep stumbling on more and more annoying bugs in Google's Android apps that remain unfixed for years. No one knows how long this stagnancy or decline is going to last. In the case of Microsoft they have stagnated (IMHO because of Ballmer) roughly between 2005 and 2017 (6% annual revenue growth on average). Since 2017, thanks to Satya Nadella's turnaround, their annual revenue growth was 13% on average. I think Google needs to see leadership change to whip the company back into shape. But this probably won't happen for another few years. There is so much inertia in market forces of a huge mastodon like Google that it will take another couple years for such sub-par products and services quality to start noticeably affecting revenue growth. That inertia is the same reason it took 3 years of Nadella as CEO before Microsoft saw revenue growth starting to bounce back up.

gen220 3y ago
Disclaimer that I also sold my GOOG recently, also largely in compliance with my biases as an engineer. As an investor, though, calling the “top” for a company like Google (or Microsoft) is so challenging — not “top” in terms of all time high valuation, but “top” in terms of differential forward-looking, annualized, and adjusted-for-tax returns vs VGT or VOO (i.e. a more challenging target). These are some of the most entrenched and profitable companies in modern history. Even as they mediocratize, they remain value-accretive for years. It’s difficult to imagine them losing to inflation. Buffet choosing Apple over any of the other FAANG/M may be looked upon even more favorably, 10-20 years from now, than it is today. Google and Microsoft are tight together in second, but I think you’re right that we’ll look back on 2018-??? as Google’s equivalent to the Ballmer years.
gniv 3y ago
I commend you for going against the grain and holding onto the stock for so long. Most people sell as soon as the options vest. Anyway, I don't see much worrisome news about GOOG. It's true that they are not innovating and surprising us anymore, but neither is AAPL or AMZN. Good execution seems to be rewarded better nowadays than innovation. (Yes, some products are stagnating or getting worse, but some are getting better. I'm not sure there's really a trend. Also, to me, all this culture decline talk is mostly noise.)

by mrb 3y ago

gen220 3y ago

Disclaimer that I also sold my GOOG recently, also largely in compliance with my biases as an engineer. As an investor, though, calling the “top” for a company like Google (or Microsoft) is so challenging — not “top” in terms of all time high valuation, but “top” in terms of differential forward-looking, annualized, and adjusted-for-tax returns vs VGT or VOO (i.e. a more challenging target). These are some of the most entrenched and profitable companies in modern history. Even as they mediocratize, they remain value-accretive for years. It’s difficult to imagine them losing to inflation. Buffet choosing Apple over any of the other FAANG/M may be looked upon even more favorably, 10-20 years from now, than it is today. Google and Microsoft are tight together in second, but I think you’re right that we’ll look back on 2018-??? as Google’s equivalent to the Ballmer years.

gniv 3y ago

I commend you for going against the grain and holding onto the stock for so long. Most people sell as soon as the options vest. Anyway, I don't see much worrisome news about GOOG. It's true that they are not innovating and surprising us anymore, but neither is AAPL or AMZN. Good execution seems to be rewarded better nowadays than innovation. (Yes, some products are stagnating or getting worse, but some are getting better. I'm not sure there's really a trend. Also, to me, all this culture decline talk is mostly noise.)