Offshore

AkhenOsiris
RT @TechFundies: MS TMT: MS did a good job of asking the tough questions of $GOOGL and Chief Business Officer put up strong defense. Feels sentiment is one way here and stock probably oversold. Stock trades at 16.7x GAAP 2025 EPS here.

Highlights
-Brian Nowak, MS, said let’s kick it off with Gemini. Room actually snickered. That’s where we are. [Just a comment – not saying the crowd is right or wrong, but pessimism is very high].
-All hands on deck addressing Gemini racial bias fiasco. Expect structural change from this and could be deep.
-Search is about factuality, freshness and incorporation of diversity of web.
-Search query growth has been consistent across all major markets over the past 12 months. Think he said 50% of searches are new each day so freshness matters [could have been 15%].
-Innovator’s dilemma: have been paranoid and addressed transitions over time. Mobile transition took search from desktop to mobile and worry was smaller screen would limit ads.
-Now running ads above and below SGE (GOOG GenAI box) – happy with what seeing as users finding these links useful [implying they are still clicking on ads]
-Imagine ads are natively and directly integrated into answers which could create user and advertiser value over time – “actually excited about where we can take this over time”
-Even if GenAI answer is precise, there is room to show user additional choices [maybe recommends ideal gift but also shows ad for another choice next to it]
-AI has been helping advertisers – Pmax outperforms, AI helps w/ keyword creation, asset creation
-AI helping YouTube – most important thing is incorporating for creators (helping replace backgrounds, create music tracks, etc.) but also helps advertisers create ads
-AI helping cloud – have NVDA and internal chip infra for training, help customers use internal or third-party models, etc.

Notes
Philipps Schindler – SVP – Chief Business Officer
-Monetization across company
-Tech services, publishers, advertisers
-Partnerships: BD, M&A
-Country operations

Gemini?
-[People laughed when MS brought it up– tells you about sentiment here]
-Doing deep analysis of this incident
-Sundar very clear that we are driving changes from this – could be structural, could be product launch processes, red teaming, etc.
-Have the muscle to develop and launch very successful products

Is GOOG moving too slow in GenAI?
-Have been leader in AI for many years and have consciously not rushing to market a chatbot

Innovator’s dilemma in search?
-Have addressed concerns over time: desktop to mobile search, search moving to shopping apps, etc.
-Search is about factuality, freshness, diversity of web – believe can be dramatically enhanced by GenAI
-Getting positive feedback on GOOGL GenAI
-Chat-style interface more centered on use cases like ideation / coding.
-GenAI is opportunity for growth – can serve existing use cases better but expand use cases being addressed (more helpful for more complex or longer queries, or comparison queries)

What’s happening w/ search behavior?
-Seeing positive search query growth in all major markets – has been consistent over past 12 mo
-Think he said 50% of queries each day are new [maybe he meant 15%?] so freshness is important
-Lens has billions of searches / month

How does monetization work w/ 1-2 answers w/ Gen AI vs 10 blue links?
-Usually UX change of this magnitude creates more advertising opportunities
-Saw same thing w/ desktop to mobile where had smaller real-estate
-Now running ads above or below SGE experience – users finding these links useful based on what seen thus far
-Now imagine ads are natively and directly integrated into answers – could create user and advertiser value over time
-Even if answer is precise, there is always room for user choice – an additional offering
-Actually excited about where we can take this

AI
-Bit over 80% of a[...]

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